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Michael P. Walsh 3105 N. Dinwiddie Street Arlington, Virginia 22207 USA Phone: (703) 241 1297 Fax: (703) 241 1418 E-Mail mpwalsh@igc.org Michael@theicct.org http://walshcarlines.com

CAR LINES ISSUE 2013 4 AUGUST 2013

EUROPE ............................................................................................................................ 4 

1.  As EU Council President, Lithuania to Seek Accord on F-Gases, Impact Assessments ............ 4 2.  European Commission Seeks Explanation from Germany in Air Conditioning Dispute ............ 5 3.  German Authorities Confirm ‘No Material Risk’ Of New Refrigerant ............................................. 6 4.  British Court Seeks Quick Resolution of Case Alleging U.K. Breach of EU Air Quality Rules .. 6 5.  Draft BAT Guidance for Combustion Plants Released ................................................................... 7 6.  EU and China Issue Joint Statement on Environmental Policy Dialogue and Cooperation ....... 8 7.  EU Hits Russia With First WTO Dispute, Over Car Import Recycling Fee .................................... 8 8.  EU Lawmakers Deal a Blow to Crop-Based Biofuels ...................................................................... 9 9.  BMW Reportedly To Invest In UK Electric Car Charging Firm ..................................................... 10 10.  UK Government To Invest £10m in Ultra-Low Emission Vehicles ........................................... 10 11.  EU Parliament Advances ‘Backloading’ Plan to Boost Prices on Carbon Market ................. 11 12.  Russia Advances New Regulations to Reduce Harmful Refrigerants in Line With Treaties 11 13.  Shuttle Diplomacy Under Way on Global Aviation Emissions Deal ........................................ 12 14.  EU Auditors Call For End of “Ineffective” Programs for Shifting Road Freight to Rail ......... 13 15.  EU's Transition to Green Economy Requires New Policies, Environment Agency Says ..... 14 16.  Hot July ‘Exacerbating Ozone Pollution’ .................................................................................... 15 17.  After Five Years London’s LEZ Impacts on Vehicle Fleets and Air Quality ............................ 16 18.  Cars CO2 Proposal Reportedly Blocked In Council .................................................................. 16 19.  Exposure to Particulate Pollution Associated With Lung Cancer ........................................... 17 

NORTH AMERICA ........................................................................................................... 18 

20.  Senate Confirms McCarthy as Chief Environmental Regulator ............................................... 18 21.  New EPA Chief Defends Agency's Policies................................................................................ 20 22.  API Seeks 'Tier III' Overhaul as States, Auto Sector Tout Fuel Rule's Benefits ..................... 21 23.  U.S. Appeals Court Partially Upholds Ozone Pollution Rule .................................................... 23 24.  U.S., China Agree To Cut Emissions from Vehicles, Coal ........................................................ 24 25.  House Panel Approves EPA, Interior Cuts ................................................................................. 26 26.  Pollution Regulators Set Sights on Off-Road Vehicles ............................................................. 26 27.  California Weighs Refinery GHG Rules Following Efficiency Audit Results .......................... 27 28.  Energy Group Seeks EPA Rule Fix to Bolster Methanol as Alternative Fuel ......................... 28 29.  EPA Delay on Greenhouse Gas Biofuel Rules Canceled by Court .......................................... 29 

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30.  British Columbia's Fuel Use Fell Following 2008 Start of Carbon Tax, New Report Says .... 29 31.  Cruise, Freight Shipping Sectors Divided On Compliance With EPA Air Rule ...................... 30 32.  North American Commission to Focus on Transport, Climate Change, Hazardous Waste . 31 33.  EPA Airport Emissions Data May Bolster Push to Ban Leaded Aviation Gas ....................... 32 34.  GM, Honda Latest to Join Forces on Fuel Cells ........................................................................ 33 35.  Ford to Offer F-150 Pick-Up That Can Run On Compressed Natural Gas............................... 34 36.  Foes of Obama Climate Policy Prepare Battle Over Cost of Carbon....................................... 35 37.  House Panel Subpoenas EPA for Air Pollution Data................................................................. 36 38.  House Readies Climate Hearing .................................................................................................. 37 39.  Supreme Court Sets Date to Weigh Hearing GHG Suits ........................................................... 38 40.  EPA Responds To Concerns Over Emissions Increases From Engine Air Rule Revisions . 39 41.  California Delays LCFS Compliance, Revisions After Adverse Court Ruling ........................ 41 42.  California Air District Fights Proposal to Delay Cleaner Ship Engine Policy ......................... 42 43.  Impact of Keystone XL on Greenhouse Gas Emissions Remains Controversial .................. 42 44.  Canadian Consent Agreements with Hyundai, Kia Settle Incorrect Fuel Economy Issue .... 44 45.  Study: Air Pollution Causes 200,000 Early Deaths Each Year In The U.S. ............................. 44 46.  Carbon, Silicon In Airborne Particulates Increase Risk Of Death In US Cities, Study Says. 46 47.  Fake Vehicle Emissions Tests Cost Man 10 Years in Prison ................................................... 46 48.  Davis County Testing Center Reports High Fail Rate for Diesel-Fueled Vehicles ................. 47 49.  Utah Officials Hope Their Plan Will End Winter Pollution ........................................................ 48 50.  US Becoming 'Refiner to the World' As Diesel Demand Grows ............................................... 48 51.  EPA Finalizes 2013 Renewable Fuel Standards ......................................................................... 50 52.  EPA Vows to Revise Refinery Air Toxics Rules In 2014 ........................................................... 50 53.  States Wage Fights Over Air Transport Ahead Of New EPA Interstate Rule .......................... 51 54.  California Eyes Subsidy Hikes to Build Hydrogen Pumps for Fuel-Cell Cars ........................ 52 55.  Three Shipping Companies Fined $440K for Using Dirty Fuel Oil ........................................... 54 56.  Mexico’s President Formally Proposes Oil Sector Reforms .................................................... 54 

CENTRAL AMERICA ....................................................................................................... 55 

57.  Air Pollution in San Jose, Costa Rica Threatens Health ........................................................... 55 ASIA-PACIFIC .................................................................................................................. 55 

58.  Recent Developments in China ................................................................................................... 55 China Proposes New Cap on Sulfur in Gas, Implementation Schedule ................................................................... 55 Cleaner Fuels Spreading Across China ................................................................................................................... 56 Cleaner Fuel on the Way For Shanghai Motorists ................................................................................................... 56 China to Tackle Air Pollution with New $277 Billion Initiative ................................................................................... 57 China Official Defends "Embarrassing" Environmental Protection Ministry ............................................................. 58 Great Wall Motors Prospers As Peers Struggle ....................................................................................................... 58 Pollution Leads to Drop in Life Span in Northern China, Research Finds ................................................................ 59 Pollution Problems Widespread in 2013; Beijing, Tianjin and Hebei Hit Hardest ..................................................... 60 Tianjin Guideline the Latest Bid To Restrict New Car Sales .................................................................................... 61 Unintended Consequences: Vehicle Restrictions Spur Big Car Purchases ............................................................. 62 Pearl River Delta to Ban Government Autos on Bad Air Days ................................................................................. 63 Tai'an Sees 376,000 Private Cars on Road ............................................................................................................. 64 Congested Traffic Hits Even Small Urban Areas ..................................................................................................... 65 Road Construction to Accelerate In Central, West China ........................................................................................ 65 Air Pollution Reportedly Takes Toll on China's Tourism .......................................................................................... 66 China Set To Overtake US as World's Largest Oil Importer by October .................................................................. 67 China to Spend More on Technology to Tackle Severe Pollution ............................................................................ 68 China's First Car-Sharing Scheme Starts In Hangzhou ........................................................................................... 68 BMW Expansion Denial May Signal Dimmer Automaker Outlook ........................................................................... 69 Major Effort Underway to Upgrade Emissions Monitoring and Forecasting ............................................................. 69 Beijing To Shift To More LNG Buses to Curb Smog ................................................................................................ 70 Hong Kong Prepares to Implement New Air Quality Objectives as Emissions Rise ................................................ 70 Study Recommends Keeping Hong Kong's Taxi and Minibus Fleet Clean .............................................................. 71 

59.  Recent Developments in India ..................................................................................................... 72 India Scandal Over GM Recall, Heads Roll, Government to Draft Mandatory Recall Policy .................................... 72 Tavera Recall Likely To Cost GM India Rs 500 Cr .................................................................................................. 74 

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Diesel Price May Be Hiked By Rs. 2-3 per Liter to Offset Underrecovery ................................................................ 74 Petrol Cars Overtake Diesels After Fuel Price Increases ......................................................................................... 75 World Bank Says Air Pollution Costing Economy Rs 3.75L Crore a Year ................................................................ 76 Delhi Government Sends Air Pollution Agenda Back for Sharpening ...................................................................... 77 Study Finds High Toxin Levels in Air ....................................................................................................................... 78 Biden Calls on India to Phase Down HFCs, Step Up Efforts to Address Climate Change ....................................... 78 Calcutta City Leading The Way Back To Petrol Cars? ............................................................................................ 79 

60.  Ex-Im Bank Won't Finance Vietnam Coal-Fired Power Plant ................................................... 81 61.  Australian Government Unveils Draft Bill to Fast-Track Move to Emissions Trading ........... 81 62.  Southeast Asian Ministers Back Haze Monitoring System but Not Release of Data ............. 82 63.  Taiwan EPA Joins NASA in Monitoring Air Pollution................................................................ 83 64.  Victoria Drivers Could Face $1000 Bill to Fix Up Clunkers ...................................................... 84 65.  Diesel Driven Growth in Nepal ..................................................................................................... 85 66.  New Zealand Scales Back Its Greenhouse Gas Reduction Goal ............................................. 85 

MIDDLE EAST ................................................................................................................. 86 

67.  Bosch MEA Diesel Systems Sales up 25% In First Half of 2013 .............................................. 86 68.  GMC Mideast Sales up 8% In July ............................................................................................... 87 69.  Saudi Car Imports Edge 1 Million In 2012 ................................................................................... 87 70.  Israel to Electrify Its National Train System; First Electric Buses Launched ......................... 87 

GENERAL ........................................................................................................................ 88 

71.  Automobile Production Sets New Record in 2012..................................................................... 88 72.  Traffic Fumes and Air Pollution Double the Risk of Autism ..................................................... 89 73.  Energy Use to Grow by 56 Percent by 2040, Fueled by Developing Nations, EIA Reports .. 90 74.  World Bank Commits to Low-Carbon Energy, Restricts Coal Financing to ‘Rare' Cases .... 91 75.  Last Decade Sees ‘Unprecedented' Extremes, Highest Temperatures, U.N. Says ................ 92 76.  Diesel Fumes Pose High Risk to Diabetics ................................................................................ 93 77.  Heatwaves Increase Ozone Pollution Danger, Study Finds ..................................................... 94 78.  Lifecycle Emissions – Electric Vehicles Cleaner, Renault Study ............................................ 95 79.  Report Estimates That Seas May Rise 2.3 Meters Per Degree of Global Warming ................ 96 80.  Report Sees Signs of New Climate 'Normal' Apparent In Hot 2012 ......................................... 97 81.  Experts Surer Of Manmade Global Warming But Local Predictions Elusive ......................... 98 82.  Benefits of Cutting Soot and Methane Debated ....................................................................... 100 83.  EIA: World Petroleum Product Consumption Sets Record High In 2012 .............................. 101 84.  Automotive Engineers See Stronger Regulations on the Horizon ........................................ 102 85.  Main Conclusions from the Saltsjöbaden V Workshop 24-26 June 2013 ............................. 103  .

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EUROPE

1. As EU Council President, Lithuania to Seek Accord on F-Gases, Impact

Assessments During its six-month presidency of the EU Council, Lithuania will seek to negotiate agreements on draft EU laws on fluorinated gases, on the Nagoya Protocol on Access to Genetic Resources and Benefit-Sharing, and on environmental impact assessments, the country's environment minister said on July 10th. However, speaking to lawmakers on the European Parliament's Environment Committee, the minister, Valentinas Mazuronis, gave no pledges on controversial dossiers on the European Union's Emissions Trading System and limits on carbon dioxide emissions from cars, saying only that Lithuania will try to move discussions forward on the issues. Lithuania is the first country that was formerly part of the Soviet Union to hold the rotating six-month presidency of the EU Council, the EU institution that represents the governments of member states. Lithuania took over the presidency July 1 from Ireland. Lithuania will chair EU Council meetings, lead negotiations with other EU institutions on legislation, and lead teams of EU negotiators at the 19th Conference of the Parties (COP 19) to the United Nations Framework Convention on Climate Change in Warsaw on November 11-19. Mazuronis said Lithuania will aim to broker first-reading agreements with the European Parliament on fluorinated gases (f-gases), implementation in the European Union of the Nagoya Protocol, and environmental impact assessments, meaning that the EU Council and European Parliament would agree on draft texts of the laws in preparation for formal ratification, possibly in early 2014. On f-gases, such as hydrofluorocarbons (HFCs), the European Commission published in November 2012 a proposal to replace current rules with a new regulation that would progressively restrict the use of the substances in the European Union through 2030. On June 19th, the European Parliament's Environment Committee voted to further tighten the restrictions compared to the Commission's proposal, and to require the complete phase-out of f-gases from some uses, such as for certain classes of refrigeration equipment. The committee also opted to start negotiations with the EU Council on the final form of the regulation. Mazuronis also said Lithuania will seek an “acceptable solution” and “do everything we can to make progress,” on a draft regulation that would limit carbon dioxide emissions from cars to 95 grams per kilometer on average starting in 2020, compared to a current level of 132 grams per kilometer. Ireland concluded a provisional agreement on the regulation between the European Parliament and EU Council in the closing days of its EU Council presidency. Such agreements are normally ratified by the institutions without further discussion, but in this case the German government intervened to delay EU Council ratification. German Chancellor Angela Merkel, speaking after a meeting of EU leaders June 28, said, “I think we need to ensure that in our drive to protect the environment we are not damaging our own industrial base.” German carmakers, which typically produce larger, heavier vehicles with higher carbon dioxide emissions, have said more time should be given to consideration of the draft regulation. Mazuronis said EU member state representatives will discuss the issue at a meeting July 17 but the outcome is uncertain. “What is necessary at present is to establish whether we're dealing with a majority opinion [on the need to reopen discussions on the regulation] or a blocking minority,” Mazuronis said. Lawmakers criticized the German intervention on the draft regulation, which they said undermined the EU system of the European Parliament and EU Council negotiating

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agreements on legislation prior to formal ratification. Environment Committee Chairman Matthias Groote said the intervention had created “a difficult situation [that] might have a serious effect. … If we have stretched out our hand in trust, a deal should be a deal.” Baz Eickhout, a Dutch Green member of the Environment Committee, said Merkel had intervened to secure votes ahead of a German general election on Sept. 22. “There is a deal on CO2 from cars. That Germany is having elections, that's not our problem,” Eickhout said.

2. European Commission Seeks Explanation from Germany in Air Conditioning Dispute

Under the EU Mobile Air Conditioning Directive (MAC Directive, 2006/40/EC), carmakers were required to phase out by January 1, 2013, the substance R-134a (1,1,1,2-tetrafluoroethane) from air conditioning systems of cars sold in the European Union, in favor of alternatives with less global warming potential (GWP). In most cases, manufacturers have replaced the substance with the refrigerant R1234yf (2,3,3,3-tetrafluoropropene), which has a GWP of 4, compared to a GWP of 1,430 for R-134a. GWP ratings are calculated relative to carbon dioxide, which has a GWP of 1. However, Daimler published a study at the end of 2012 that said R1234yf was more flammable than R-134a, and said it would continue to use R-134a on safety grounds. Daimler obtained permission from the German authorities to continue using R-134a. In a statement issued on July 16th, European Commission Vice-President Antonio Tajani said that, despite the temporary permission given by German authorities to Daimler, a preliminary Commission analysis had found that Daimler was “not respecting the obligations of the MAC Directive,” and that France had the right to “adopt temporary safeguard measures.” On the German-approved extension for Daimler's use of R-134a, the Commission said its “legal status needs to be investigated further.” Tajani added that the Commission is considering infringement proceedings against the German authorities for a breach of EU law and convened a July 17 meeting of EU member state representatives to seek “concrete and urgent solutions to reestablish conformity in the [EU] internal market to the advantage of all economic operators.” On July 18th, the European Commission said it has asked German authorities to explain by the end of August why German automaker Daimler was given permission to continue to use a refrigerant banned from vehicle air conditioning systems on environmental grounds. Commission spokesman Olivier Bailly said the Commission will seek a “quick solution on this technical issue,” which involved German authorities apparently granting a permission to Daimler that conflicts with EU law. Daimler has continued to use the fluorinated gas R-134a (1,1,1,2-tetrafluoroethane) in the air conditioning systems in some Mercedes cars, despite a ban that took effect Jan. 1, 2013, Because of the apparent noncompliance with EU law, French authorities have refused to register Mercedes models that contain the refrigerant R-134a. On July 16th, the Commission said France had the right to block the registrations of the vehicles. No other EU countries have so far signaled that they intend to prevent the registration of noncomplying vehicles. Daimler says it will persist with the older product with the hope that "in the next few years" a safer version will be available.

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3. German Authorities Confirm ‘No Material Risk’ Of New Refrigerant

The German KBA transport authority has issued its report into R1234yf, bearing out the view that the refrigerant is safe for automotive use. However, Daimler said it continues to believe the KBA report confirms its position. The European Commission is now studying the results of the tests before it makes a judgment on whether to censure Germany for its defiance of the Mobile Air Conditioning Directive, in supporting Daimler’s position to continue using noncompliant R134a. KBA carried out tests using three different levels of severity and concluded that it did not comprise a serious danger. “No sufficient proof was found with the cars tested that would have hardened the suspicion of a serious danger as defined by the product safety law,” the KBA said in its report. Its most severe test, Stage 3, showed R1234yf was more dangerous than R134a, but it conceded that it was not entirely clear what conditions were necessary for the product to become a serious hazard. "Due to the comparisons with the previous refrigerant 134a in Stage 3, one can ascertain that the safety level of cars tends to deteriorate when 1234yf is used," it explained. Had the KBA determined a material risk existed as defined by Germany’s product safety laws, it could have triggered a recall of all cars on the road currently using 1234yf. The agency had determined that in particularly severe crashes, one of the four models tested had burst into flames and emitted a considerable amount of toxic hydrogen fluoride (HF) gas in the process. However, refrigerant producers say that such a risk is something that can be ‘designed out’ of the car, as other carmakers have already done. “Non-negligible” amounts of HF were also detected in two other test crashes, even if the refrigerant itself did not appear to ignite, according to the KBA. KBA declined to say which models were affected in the most severe stage, since this round of tests surpassed what was necessary to ensure product safety. The four models tested were a Mercedes B-Class, a Hyundai i30, Subaru Impreza and Opel Mokka. The refrigerant’s joint producers have greeted the news as thorough vindication. Honeywell’s spokesman said: “KBA’s tests again demonstrate that using HFO-1234yf creates no serious risks, and as a result it will not pursue action under Germany’s Product Safety Act. With the exception of Daimler, there is broad consensus that HFO-1234yf poses no greater risk than HFC-134a in cars.” Du Pont’s global business manager for the HFO range, said: “DuPont was not surprised that the KBA testing “produced no adequate evidence of a serious risk” related to HFO-1234yf. This confirms DuPont’s high level of confidence that the refrigerant can be used safely in automotive air conditioning.” However Daimler said it believes the KBA report actually justifies its own decision to continue using R134a. A comprehensive final report is due for mid-September.

4. British Court Seeks Quick Resolution of Case Alleging U.K. Breach of EU Air Quality Rules

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Britain's Supreme Court has asked the Court of Justice of the European Union (ECJ) to fast-track the hearing of a case contending that the U.K. government is failing to meet EU air quality rules, a British attorney involved in the case said July 23. The Supreme Court ruled in May that the United Kingdom was in breach of Article 13 of the EU Air Quality Directive. The decision was based on the government's failure to prove it could realistically achieve cuts in air pollutants, such as nitrogen dioxide, by the required deadline of Jan. 1, 2015. Historically, the ECJ takes a long time to hear cases; however, in a July 16 submission to the ECJ, the U.K.’s highest court said that “because the normal time-limit for compliance has expired, and the extended time-limit will expire in January 2015, the case warrants the Court of Justice giving its decision quickly.” Whether the ECJ decides to speed up the hearing could have repercussions in other EU member states such as France, Germany, and the Netherlands that are also in breach of EU air rules.

5. Draft BAT Guidance for Combustion Plants Released Europe’s power stations and other large combustion plants may have to meet tighter pollution limits than currently set by EU legislation, according to draft conclusions on best available techniques (BAT) that could eventually become binding. The draft conclusions are contained in new guidance, known as a BREF, which could have a substantial impact on the electricity sector if unchanged. The European Commission’s Seville-based Integrated Pollution Prevention and Control (IPPC) Bureau, which recently published an initial version of the document for consultation, said it was based on applying techniques that are widely used today. The draft BAT Reference Document (BREF) sets out BAT for controlling pollution and maximizing energy efficiency at new and existing plants, while considering their costs. The Industrial Emissions Directive (IED) has made BAT conclusions more binding on regulators and industry. Permits may depart from their requirements only in limited circumstances. The directive’s provisions will apply to large combustion plants with a thermal input of over 50 megawatts in 2016. From then, it states that plants should meet new emission limit values for NOx and SO2 and other air pollutants. Certain exemptions apply, with the last expiring in 2024. Following initial discussions with industry, regulators and NGOs, the IPPC Bureau considers that it may be appropriate to set more ambitious goals than in the directive. BAT associated emission levels (AELs) put forward in the draft BREF are also significantly tighter than the existing version, which dates from 2006. For example, the IED requires 50-100MW plants burning solid fuels to emit no more than 400 milligrams of sulfur dioxide per cubic meter into the atmosphere. But the draft BREF says coal-fuelled installations in this category should have emissions in the 150-200mg/m3 range, averaged over a year. And existing coal-fired plants over 300MW should release an annual average of 65-180mg/m3 of nitrogen oxides, more stringent than the existing 200mg/m3 limit. The Bureau said that limits in the directive and draft BREF are not entirely comparable. But it expects the guidance “will provoke, once implemented in permits, a higher reduction” in pollution than simply applying the IED limits.

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Comments on the draft should be submitted by the end of September. Further rounds of discussion will then be held and new drafts issued before the revised BREF is finalized and published by the European Commission, which could be in 2015.

6. EU and China Issue Joint Statement on Environmental Policy Dialogue and Cooperation

Zhou Shengxian Minister of Environment Protection of the People’s Republic of China, and Janez Potočnik European Commissioner for Environment met in Beijing on 19 July 2013 for the EU-China Environmental Policy Dialogue. They exchanged views on the latest progress in the field of environmental protection and acknowledged respective efforts to address key global environmental challenges. Minister Zhou outlined how the concept of ecological civilization would guide work in the new era and the three priorities of China's current environmental policy, including air pollution prevention and control with focus on control of PM2.5, water pollution prevention and control as well as environmental protection in rural areas with drinking water safety as the focus. Commissioner Potočnik described the progress in Europe towards a resource efficient economy. Recognizing the importance of maintaining a regular policy dialogue and noting the role played by bilateral co-operation on environment in advancing the EU-China strategic partnership, they agreed to strengthen the policy dialogue and to make bilateral co-operation more pragmatic and effective by engaging and mobilizing businesses to also contribute. They also agreed to improve the implementation of the existing cooperation projects including the EU- China Environmental Governance Program, and to work together to start new projects including the EU-China Sustainability Program. Among many initiatives they agreed that there is an urgent need for concrete solutions to address the pressing challenge of air pollution in urban areas, and agreed to continue the exchange of experiences with a view to identifying and adopting efficient policy responses.

7. EU Hits Russia With First WTO Dispute, Over Car Import Recycling Fee The European Union has launched the first formal trade dispute with Russia at the World Trade Organization, less than a year after Moscow joined the trading club. The EU has told the WTO that Russia is illegally protecting its carmakers with a recycling fee levied on imported cars. "The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter but to no avail. The fee is incompatible with the WTO's most basic rule prohibiting discrimination against and among imports," EU Trade Commissioner Karel De Gucht said in a statement. The dispute follows repeated warnings from Brussels about what it sees as Russia's noncompliance and loud dissent in Russia about the merits of being in the WTO at all. Russia's critics say it has never made good on its obligations, and the car levy, introduced nine days after Russia became a member, is one of a slew of non-compliant policies on goods ranging from alcoholic drinks to combine harvesters. Importing a car to Russia involves paying a fee to cover the future cost of recycling it, a form of green tax. Cars produced in Russia, however, are not subject to the same charge, making it, in the EU's eyes, in effect an import tax. Cutting import tariffs on cars was a major sticking point in

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Russia's 18-year negotiation to join the WTO. Moscow agreed to do so, but the EU says the recycling fee, collected up-front when a car is imported, effectively cancels out the tariff cut. The EU says the fee has a severe impact on 10 billion euros ($12.9 billion) of annual exports, and says Russia's own estimates show it generates 1.3 billion euros in Russian government revenues. Under WTO rules Russia has 60 days to satisfy EU concerns about the recycling levy by changing or explaining its policy. After that the EU could ask the WTO to adjudicate, which could force Moscow to change the rules or face trade sanctions.

8. EU Lawmakers Deal a Blow to Crop-Based Biofuels EU efforts to limit the use of crop-based biofuels, increasingly seen as doing the planet more harm than good, have won parliamentary backing. The vote in the European Parliament's environment committee to limit use to 5.5 percent of total transport fuel use will be followed by a plenary vote, expected in September. It will also require endorsement by EU member states, which are deeply divided on the issue. In 2008, an EU target was introduced to get 10 percent of transport fuel from renewable sources by 2020, most of which would come from so-called first generation biofuels made from sugar, cereals and oilseeds. Since then, a series of studies has underlined the potential environmental damage caused by some biofuels, particularly biodiesel, which accounts for the largest share of the estimated 13 billion euro ($16.71 billion) EU biofuel sector. Most recently, a study by the Joint Research Center (JRC) - the European Commission's in-house research body - confirmed earlier EU studies that biodiesel made from crops such as rapeseed does more harm to the climate than conventional diesel. Other biofuels are less problematic, the research finds. Fuels made from cereals and sugar crops have much lower carbon emissions than those from vegetable oils such as rapeseed oil, palm oil from Malaysia or soyoil from the Americas. The reason some first-generation biofuels are considered a problem is that they increase demand for crops, displacing food production into new areas, forcing forest clearance and the draining of peat land. They can also add to food price inflation. The displacement of land is known as ILUC (indirect land-use change) and can result in enough carbon emissions to cancel out any theoretical savings from biofuels. The Commission proposal includes ILUC factors to estimate the indirect emissions of biofuels made from cereals, sugars and oilseeds, but they carry no legal weight. The committee proposal makes them binding from 2020 for industry and in the case of governments with immediate effect. "This vote will pave the way for truly sustainable transport fuels, which actually reduce emissions, as of 2020," said Nusa Urbancic, a manager at campaign group T&E. Committee members also voted for extra incentives to promote advanced or second-generation biofuels. Made from waste or agricultural residues rather than food crops, these are seen as the most sustainable type of biofuel, but are still at an early stage of commercialization. The science of biofuels is still evolving. Among those tracking it is the European Environment Agency, set up to gather scientific data to inform EU policy-making. Its Executive Director Hans

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Bruyninckx said the challenge for policy-makers was to balance the very latest knowledge with the need to give investors time to adapt. Growth in biofuel consumption slowed in the EU in 2012 for a second year in a row, according to figures published recently by EurObserv’ER, a Paris-based research group backed by a consortium of energy companies, banks and public agencies. Biofuels made up 4.7% of the transport energy mix across the EU last year, according to its report. Consumption grew by 2.9% to 14.4 million tons of oil equivalent, compared with a 5.3% growth rate in 2011. The introduction of sustainability criteria may be behind the slowing, the researchers suggested. The overall breakdown of biofuel consumption was the same as in previous years, with biodiesel accounting for 79% of total energy content consumption, while ethanol made up 20%. Biofuels other than biodiesel and ethanol made up just 0.7% of total biofuel consumption. Biofuel consumption increased in 14 countries including France, Spain, Sweden and Finland, but fell in 10 including the UK, Poland, Hungary and Italy. Data for all member states was not available. Sweden has the highest proportion of biofuels in its transport energy mix at 6.4%. Germany continues to be the EU’s biggest biofuel consumer, accounting for almost 20% of total consumption, followed closely by France. Biofuels made up 5.8% of total road fuel consumption in Germany last year. But France was the top biodiesel consumer.

9. BMW Reportedly To Invest In UK Electric Car Charging Firm Press reports indicate that German carmaker BMW is planning to buy a 2 percent stake in Britain's Chargemaster, a provider of electric vehicle charging points. The agreement is expected to be announced before the launch of BMW's i3 electric vehicle. Britain's Sky News said the deal was worth around 500,000 pounds. Chargemaster designs, manufactures and markets charging points for domestic, commercial and public use. It also supplies software, installation and maintenance services. In 2012 Chargemaster supplied over 2,800 charging points, generating revenue of 3.6 million pounds. The British company which is based near Luton, some 30 miles north of central London, recently announced its intention to float on London's junior AIM market to fund expansion. It hopes to cash in on a recent European Commission ruling demanding that around 800,000 charging points are installed across Europe by 2020.

10. UK Government To Invest £10m in Ultra-Low Emission Vehicles A new £10 million prize has been unveiled by the UK government as it seeks to encourage the development of the next generation of ultra-low emission vehicles. Businesses in the UK will be able to apply for the award from late 2013, with a judging panel run by the Office for Low Emission Vehicle and the Technology Strategy Board responsible for the process. Chief Secretary to the Treasury said the money is designed to encourage more cutting-edge research in the field of sustainable transport, as the country seeks to become a global leader. It is the latest in a long line of financial commitments made by the government and follows the £400 million earmarked to help motorists buy ultra-low emission vehicles, while the creation of an Advanced Propulsion Centre was also announced earlier this month.

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11. EU Parliament Advances ‘Backloading’ Plan to Boost Prices on Carbon Market

On July 3rd. the European Parliament took a major step toward the finalization of a measure to shore up the European Union's ailing carbon market by approving a so-called backloading plan to defer the auctioning of carbon allowances until the later stages of the current phase of the EU Emissions Trading System (ETS). Lawmakers in session in Strasbourg, France, voted 344-311 with 46 abstentions to allow the European Commission to make one modification to the auction schedule in order to backload 900 million allowances. Each carbon allowance represents the right to emit one metric ton of carbon dioxide. Some lawmakers and EU member states have criticized the plan as an unjustified intervention in the carbon market. However, supporters say backloading is needed to boost the EU carbon price, which has fallen to about €4 ($5.20) per allowance. The European Commission has identified €30 ($39) as the right level to stimulate emission-reducing investments by companies. The low carbon price has been caused by a surplus of allowances in the system, calculated to be about 2 billion at the end of 2012, equivalent to about one year's emissions from all participants in the ETS, which covers power plants and heavy industry. The approval of backloading by the Parliament follows the body's rejection of the measure in April. At that time, the Parliament sent the dossier back to its Environment Committee for more discussion. The Environment Committee adopted an amended version of the proposal in June. On July 3rd, the Parliament also opted to start negotiations on the backloading dossier with EU member states, represented in the EU Council, which must also decide their position on the proposal. A number of countries including France, Germany, and the United Kingdom have supported backloading as a temporary measure to boost the carbon market while longer-term reform through 2030 is considered. However, other, mainly eastern European countries, in particular Poland, have opposed intervention in the carbon market, arguing that it will increase energy prices for their carbon-intensive industrial sectors. The July 3 Parliament vote left a number of the details of the backloading proposal unclear ahead of negotiations with the EU Council. Although lawmakers supported the main proposal to backload 900 million carbon allowances, they rejected a number of amendments adopted by the Environment Committee in its June vote. These included a stipulation that allowances should be removed from the system in 2013-2015 and reintroduced “in a predictable and linear manner starting in the year following that during which allowances have last been withheld,” meaning in 2016. Lawmakers also removed an amendment stating that when allowances are reintroduced, the auction revenues from 600 million of them should be used to “set up a fund for supporting development of innovative low-carbon technologies, demonstration projects and measures intended to reduce the costs and carbon emissions of energy intensive industries.” Matthias Groote, a German center-left lawmaker and chairman of the Environment Committee, said a European Parliament delegation will “start negotiations with EU ministers as soon as possible and seek a common solution that will allow the ETS to fulfill its purpose.”

12. Russia Advances New Regulations to Reduce Harmful Refrigerants in Line With Treaties

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Russia's Parliament has approved new regulations to put tighter controls on ozone-depleting substances and phase them out in line with the country's commitments under the Montreal Protocol and Vienna Convention. The regulations aim to cut production of such substances, including refrigerants, by regulating their sale and introducing fines for violations of the new rules. The Parliament approved the regulations on July 8th as an amendment to Russia's main environmental law, On Environmental Protection. Companies that produce the substances or use them in their products will be required to reduce that production and use over the next several years and turn to non-ozone-depleting alternatives. The regulations will impact chemical manufacturers as well as makers of products requiring coolant, such as refrigerators and air conditioners. Companies that operate in Russia or import products will be required to end the use of substances such as hydrochlorofluorocarbons (HCFCs) and Freon. The regulations cover the full life cycle of ozone-depleting substances, including limits on their manufacture, use, and storage in machinery and equipment, as well as recycling, destruction, and conversion of the substances that are produced in or imported into Russia. The state will control the volume of production and consumption of the substances, as well as the facilities that produce products containing them. The regulations will also apply to Belarus and Kazakhstan, as the two countries and Russia form a Customs Union under which many regulations are being harmonized. Fines for violating the regulations range from up to 2,000 rubles ($60) for citizens to up to 250,000 rubles ($7,600) or suspension of activity for up to 90 days for companies. Russia uses four types of ozone-depleting substances listed under Schedule C of the Montreal Protocol, one of which, Freon 141B, is not produced domestically, according to the State Duma Committee on Natural Resources and Environment. After the president signs the bill into law, the new regulations will go into effect Jan. 1, 2014. The Duma environment committee said in the statement that more laws will be passed by 2015 to help modernize affected industries. The Global Environment Facility has an ongoing project to phase out HCFCs in Russia, one of the world's biggest producers of the substances. The group estimates that between 2010 and 2015, Russia must phase out 9,550 metric tons of HCFCs to meet its commitments under the Montreal Protocol on Substances that Deplete the Ozone Layer.

13. Shuttle Diplomacy Under Way on Global Aviation Emissions Deal Diplomatic talks on a deal to curb greenhouse gas emissions from the global aviation industry have intensified recently as EU and U.S. officials try to stave off the threat of a trade war. Peter Liese, a member of the European Parliament from the conservative German Christian-Democratic Union, recently led a delegation to meet with Obama administration officials in Washington to discuss the issue. The Washington meeting was attended by seven MEPs from different political groups and by US senators, congressmen and chief climate negotiator Todd Stern. Delegates also discussed the US president’s new climate change plan.

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The International Civil Aviation Organization (ICAO), the United Nations' civil aviation body, has until September to complete a resolution on a market-based plan that would curb rising greenhouse gas emissions from global airlines. Should the UN organization fail, the European Union could try to re-impose an emissions trading system on global airlines. The EU postponed the implementation of the law in 2012 to give the ICAO time to devise a global approach. Liese sees only a 50 percent chance the ICAO talks can deliver a deal strong enough to avoid a revival of the law and avoid threats of a trade war. "Unless we have progress in the next six to seven weeks, we will run into a big problem," Liese told the press. He said drafts of the resolution that ICAO assembly delegates will consider at their triennial meeting, which starts in Montreal on September 24, might not be not ambitious enough to pass muster. “The European Union stopped the clock to help to reach an agreement at the ICAO meeting this September,” Liese said in a statement. “But what is on the table and what is supported by United States negotiators is very disappointing. … No one can expect an unconditional surrender of the EU.” Mr. Liese was the rapporteur on the ‘stop the clock’ derogation for international aviation from the ETS. The derogation is a temporary measure which should cease if no clear progress towards a global, market-based emissions reduction system is made at the September ICAO meeting. “The current language only proposes to mandate the ICAO Council to discuss further,” Liese said. “Even more disappointing is the position of the ICAO Council and the United States on the time in between, because the international agreement [on airline emissions] will not enter into force before 2020.” The ICAO narrowed its options in May to three market-based measures, including a mandatory offsetting scheme. The following month, the International Air Transport Association (IATA), set up to help the UN harmonize aviation after World War II, backed a system in which airlines would offset increased emissions after 2020 by buying carbon credits from projects that cut them in other sectors. A wider coalition of aviation groups endorsed the plan in recent weeks. The ICAO's 36-member leadership council is scheduled to meet on September 4, when it is expected to discuss a final resolution. If the council agrees to the draft, observers believe it is likely the plan will be endorsed by the full assembly when it convenes in late September-early October. There has been intensive shuttle diplomacy over the last few weeks, with European officials coming to Washington and U.S. officials going to the ICAO headquarters in Montreal. In addition, meetings between countries with similar views on the issue have been taking place. For example, China and India, which along with the United States strongly opposed the imposition of the European trading scheme on their airlines, are likely meeting ahead of the assembly to coordinate objections to the ICAO's proposed resolution. Liese said U.S. and EU officials might also have to consider a potential bilateral agreement if the ICAO fails to agree on a deal that would stave off the threat of a trade war.

14. EU Auditors Call For End of “Ineffective” Programs for Shifting Road Freight to Rail Marco Polo programs, aimed at shifting freight away from the roads, have been ineffective and should be discontinued in their current design, according to a new report from the European Court of Auditors (ECA). “To put it simply, the programs were ineffective as they did not meet the targets, little impact was achieved in shifting freight off the roads and there were no data to assess the

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achievement of the policy objectives (e.g. environmental benefits)" said Ville Itälä, the ECA member responsible for the report. Since 2003, the Marco Polo I and II programs have financed transport service projects designed to shift freight transport from road to rail, inland waterways and short sea shipping. The programs have been part of the EU transport policy objective to develop alternatives to road-only freight transport. This generally accepted objective aims to reduce international road freight traffic, thereby improving the environmental performance of freight transport, reducing congestion and increasing road safety. But the audit found there were not enough relevant project proposals put forward because the market situation and the program rules discouraged operators from taking advantage of the scheme. Half of the audited projects were of limited sustainability. One of the main findings of the audit was that there were serious indications of “deadweight” - that is projects which would have gone ahead even without EU funding. In fact, 13 of the 16 beneficiaries audited confirmed that they would have started and run the transport service even without a subsidy. In addition, there were no reliable data to assess benefits on the environmental impact of freight transport, road congestion or road safety. Given the results of the current programs, the ECA recommends discontinuing EU funding for transport freight services following the design of the Marco Polo programs. In the future, such funding should depend on an impact assessment at the outset, showing whether and to what extent there is EU added value. This should involve a detailed analysis of potential demand and best practice in the Member States.

15. EU's Transition to Green Economy Requires New Policies, Environment Agency Says

The European Union's commitment to transitioning to a green economy via a wide range of binding targets is lagging and will require significant new policies, including new legislation, according to a report published on July 24th by the European Environment Agency. The European Union has 63 legally binding targets and 68 nonbinding objectives set out in policies covering the period from 2010 to 2050 that are designed to help achieve a green economy. “Of the 63 legally binding targets, 62 have their deadlines in 2020 or before,” a press release accompanying the report said. “Most of the current targets and objectives can be seen as interim steps towards a transition to a green economy because in most cases eradicating the problems will require longer term efforts beyond 2020,” the release continued. Major points in the report included:

New policy measures will be needed to meet the EU objective of cutting energy use 20 percent from 1990 levels by 2020.

Meeting requirements under the Thematic Strategy on Air Pollution to reduce pollutants will require “continued efforts,” though only in the case of fine particulate matter (PM-2.5) is there a need to significantly enhance abatement measures.

A nonbinding target that waste generated per capita should be in absolute decline by 2020 is “narrowly” off target, but the report noted a significant decline in waste generation since 2007.

A nonbinding goal to all but eliminate land-filling of waste by 2020 will require a “radical change” in waste management practices.

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16. Hot July ‘Exacerbating Ozone Pollution’

Unusually high temperatures this summer may be contributing to poor air quality in many European cities, according to the European Environment Agency (EEA), and thresholds to protect health from ground-level ozone have been exceeded across Europe in recent weeks, according to preliminary data reported to the EEA. Ozone pollution has serious effects on health, especially for older people and children, or those with asthma and other respiratory problems. Reducing ozone pollution in the air depends on cutting the ‘precursor pollutants’ that lead to ozone formation. July this year has been hotter than usual with warmer than average temperatures across most of Central and Western Europe. The average temperatures in Rome, Prague, Paris and Copenhagen were among the highest since 1996. These temperatures may have contributed to increased ozone levels. Malta is also just emerging from a heat wave. Although April, May and June this year had fewer ozone exceedances compared to the same period in 2012, the number of exceedances in July 2013 seems to be much higher than last year, according to preliminary data reported to EEA, showing that the Information Threshold1 for ozone was exceeded at approximately a quarter of all measurement sites in Europe. In the first half of July, concentrations exceeding the Information Threshold occurred mainly in northern Italy, Spain and southern France, but by the second half of the month similarly high pollutant concentrations were also found in parts of northern Europe. Ozone exceeded these limits in the Paris area (17 July) and in The Netherlands, Belgium and western Germany (22 to 23 July). At the end of the month most of the exceedances were registered in northern Italy, with high values occasionally occurring also in the Central European region. Last summer, levels of ozone were particularly low – the alert threshold2 was exceeded the fewest times since monitoring began in 1997. This is partly due to efforts to reduce air pollution in Europe. However, ozone is still a problem, with more than 98 per cent of the total EU urban population potentially exposed to ozone levels above World Health Organization guidelines to protect health. Ground-level ozone is formed from chemical reactions following the release of various ‘precursor pollutants’ from a wide variety of sources, for example: fossil fuel combustion, road transport, refineries, solvents, vegetation, landfills, wastewater, livestock and forest fires. The reactions that create ozone are catalyzed by heat and sunlight – so it is a particular problem in the summer months, and southern Europe typically has much higher levels of ozone than the north. Excessive ground-level ozone can cause respiratory problems, trigger asthma, reduce lung function and cause lung diseases. The mortality rate rises with increases in ozone exposure, according to several European studies. Unlike ozone in the stratosphere, which protects us from

1 The EU has defined an Information threshold of 180 µg ozone per m3 air. Any exceedance of this threshold should be reported by the Member State in which it occurs to the European Commission. The threshold reflects a 'level beyond which there is a risk to human health from brief exposure for particularly sensitive sections of the population'. When the threshold is exceeded, national authorities are required to inform the public. 2 The EU has defined an Alert threshold of 240 µg ozone per m3 air. The threshold reflects a 'level beyond which there is a risk to human health from brief exposure for the general population'. When the threshold is exceeded, national authorities are required to inform the public and give advice.

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ultraviolet radiation, high levels of ground-level or ‘tropospheric’ ozone can also damage plants, reducing crop yields and forest growth, and also damage buildings and monuments.

17. After Five Years London’s LEZ Impacts on Vehicle Fleets and Air Quality London’s LEZ , created in February 2008, requires vehicles weighing more than 12 tons to meet at least ‘Euro III’ emissions standards. In July 2008, this was extended to freight vehicles with a weight of more than three and a half tons, as well as buses and coaches over five tons. By 2012, large vans and minibuses were also required to be compliant with these restrictions. One of the aims of the scheme was to create an incentive for organizations to replace existing vehicles with newer and less polluting models by introducing fines for non - compliance (£100 per day for large vans and £200 for heavy vehicles). Data from the UK’s Driver and Vehicle Licensing Agency showed that the number of rigid vehicles (medium or heavy duty lorries without a trailer) not meeting EU emission standards dropped substantially in 2008, suggesting that the LEZ resulted in an extra 20% of vehicles being replaced by lower - emission vehicles.3 Articulated lorries showed a similar trend. In January 2012, minimum standards were introduced for light commercial vehicles (LCV), such as vans. LEZ restrictions on vans with a weight of more than 1.3 tons had significant impact, since this includes more than 60% of all freight - carrying vehicles. There is early evidence that LCVs are also being replaced in the same way as the larger rigid and articulated vehicles. The results show that the LEZ is driving a reduction in ‘non - compliant’ vehicles ,i.e. those that do not meet the stricter EU emission standards; the number of articulated vehicles non - compliant with EU emissions regulations has halved since 2007, and the proportion of non – compliant rigid vehicles used in the LEZ dropped by 6% to 22% in 2009. The data also show a shift in the types of vehicles used in the LEZ with LCVs and articulated vehicles being used instead of large rigid vehicles. The study authors note that the large area covered by the LEZ includes industrial areas near motorways, meaning that vehicles moving goods to other parts of the UK are also subject to restrictions. From 2001, data on levels of particulate matter and nitrogen oxides, both produced by traffic, were recorded at four locations, three within the LEZ and one 25 km away. Particulate matter concentrations were found to be stable or decreasing at the three sites within the LEZ, after introduction of the scheme. Nitrogen oxide concentrations fell both inside and outside the LEZ and were not significantly different between locations. Overall, the authors conclude that the LEZ has had a substantial impact in the composition of the vehicle fleet, increasing the proportion of low – emission vehicles. This in turn has led to a small but significant improvement in air quality.

18. Cars CO2 Proposal Reportedly Blocked In Council A proposed EU regulation on cutting cars’ CO2 is in trouble, with a substantial minority of countries now opposed to the previously agreed terms, it has been reported. There have been no formal discussions on the matter since a meeting in late June when member states’ representatives failed to rubberstamp the agreement struck by the Irish presidency and MEPs. The June vote was

3 "Science for Environment Policy": European Commission DG Environment News Alert Service, edited by SCU, The University of the West of England, Bristol. Source: C. Ellison, R.B.,Greaves, S.P. & Hensher, D.A. (2013). Five Years of London’s low emission Zone: Effects on vehicle fleet composition and air quality. Transportation Research Part D 23: 25 - 33. DOI: 10.1016/j.trd.2013.03.010 Contact: Richard.ellison@sydney.edu.au

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postponed at the behest of Germany, which wants to make the regulation more generous to carmakers. “There is a clear blocking minority in the council,” said one diplomat close to the matter. The Lithuanian presidency confirmed it had not been able to ensure the deal’s approval in July. “We understand and are fully aware of the importance of this regulation and as the presidency, we are focusing all our efforts on ensuring the proper support towards approving the agreed compromise. That was not possible in July,” a spokeswoman said. “As soon as we have the appropriate support we will come back to this question at Coreper4,” she added. Germany’s position apparently remains unchanged; it wants the multiple for ‘super-credits’ to be raised, and the annual cap on using these incentives scrapped in favor of an average cap over a four-year period. Central and eastern European countries whose car industries are linked with Germany’s are also reportedly in favor of the deal being reopened. A spokesman for the UK, which supported Germany in the June meeting, noted, “It is important to strike the right balance in supporting ambitious targets, but ensure we do not hinder industry competitiveness or growth and encourage continued investments in low-carbon vehicles,” he said. The regulation is needed to implement the EU’s target to cut CO2 emissions from new cars to 95 grams of CO2 per kilometer by 2020.

19. Exposure to Particulate Pollution Associated With Lung Cancer Exposure to particulate air pollution is associated with lung cancer incidence, according to a prospective analysis of data from 17 European cohort studies. Researchers set out to assess the association between long-term exposure to ambient air pollution and lung cancer incidence across nine European countries. Air pollution was assessed by land-use regression models for particulate matter of less than 10 mL, less than 2.5 mL, and between 2.5 mL and 10 mL, as well as nitrogen oxides, soot and two traffic indicators. The 312,944 people included in the analysis equated to 4,013,131 person-years at risk. Within the 12.8-years follow-up, there were 2,095 cases of incident lung cancer. A significant association was found between lung cancer risk and exposure to particulate matter of less than 10 mL (HR=1.22; 95% CI, 1.03–1.45); the HR for particulate matter of less than 2.5 mL was 1.18 (95% CI, 0.96-1.46). The HR for the association between adenocarcinomas and exposure to particulate matter of less than 10 mL was 1.51 (95% CI, 1.10-2.08), and the HR for association between adenocarcinomas and exposure to particulate matter of less than 2.5 mL was 1.55 (95% CI, 1.05-2.29). Researchers reported no association between lung cancer and nitrogen oxide concentration (HR=1.01; 95% CI, 0.95–1.07) or traffic intensity on the nearest street (HR= 1.00; 95% CI, 0.97–1.04).

4 COREPER, from French Comité des représentants permanents, is the Committee of Permanent Representatives in the European Union, made up of the head or deputy head of mission from the EU member states in Brussels.

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Researchers noted the study may have been limited because data for previous lung disease were not obtained. “Previous lung disease might be associated with both air pollution concentrations and the risk for lung cancer,” they wrote. In an accompanying editorial, Takashi Yorifuji, MD, of the department of human ecology at Okayama University Graduate School of Environmental and Life Science in Japan, and Saori Kashima, PhD, of the department of public health and health policy at the Institute of Biomedical and Health Sciences at Hiroshima University in Japan, wrote: “At this stage, we might have to add air pollution, even at current concentrations, to the list of causes of lung cancer and recognize that air pollution has large effects on public health ... Fortunately, like tobacco smoking, it is a controllable factor.” The study was funded by the European Community’s Seventh Framework Program.

NORTH AMERICA

20. Senate Confirms McCarthy as Chief Environmental Regulator The Senate has finally confirmed Gina McCarthy to head the Environmental Protection Agency, a long-awaited move that could help President Barack Obama revive his plans to fight climate change. The Senate voted 59 to 40 for McCarthy, who oversaw rules on mercury and soot pollution from power plants in her prior job as the EPA's top air official, a position she held since 2009. Obama nominated McCarthy in early March, but her confirmation was held up by a partisan battle over his nominees for other positions, and by broader opposition to the EPA from some Republicans on the Senate Environment and Public Works Committee. Obama said in a statement that he looks forward to working with McCarthy in her new role as "we work to slow the effects of climate change and leave a cleaner environment for future generations". A Boston native, McCarthy has long worked at state and federal levels to regulate emissions, winning the confidence of many officials leading heavy industries, such as power plants and manufacturers. She has also worked for several Republican governors, including 2012 presidential candidate Mitt Romney when he headed Massachusetts. The experiences made McCarthy a solid choice for the task of balancing coal, natural gas, and political interests in implementing the new rules on greenhouse gas emissions Obama wants, analysts say. Any EPA rules on emissions face legal challenges. The EPA is first expected to finalize carbon rules on new power plants and then to propose rules on existing ones. Thousands of existing power plants account for about a third of U.S. greenhouse gas emissions. Lawmakers from big energy producing states expressed opposition to Obama's climate plans. Senators from big coal-producing states, including John Barrasso of Wyoming, a Republican, and Joe Manchin of West Virginia, a Democrat, have said regulations targeting coal-fired power plants will strangle the economy and kill jobs. After leading a fight against McCarthy over EPA transparency issues, Senator David Vitter of Louisiana, the top Republican on the Environment and Public Works Committee, said he would no longer block a vote on her appointment. All three senators voted against McCarthy on Thursday, Manchin was the only Democrat in the chamber to do so.

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Vitter said the nominee had been part of a "war on coal" and had helped lead a "methodical march against affordable, reliable energy." Manchin said he was not against McCarthy personally, but against the EPA's "regulatory rampage." The Senate killed a wide-ranging climate bill early in Obama's first term. Continuing opposition in Congress on fighting climate change has pushed Obama to use executive actions, including EPA regulations, to tackle the issue that is one of his top priorities. Obama wants the climate rules on existing power plants to be finalized by June 2015. McCarthy will also oversee rules on hydraulic fracturing for oil and natural gas, so called Tier 3 auto emissions, and the use of biofuels. Her agency is expected to play a role later this year or early next in working with the State Department to determine whether the Keystone XL pipeline, which would bring Canadian oil sands petroleum to refineries along the Gulf Coast, is in the national interest. The State Department will make the final decision. McCarthy's confirmation rounds out Obama's environment and energy team. Ernest Moniz, a former physics professor at the Massachusetts Institute of Technology, was confirmed in May to head the Energy Department, and Sally Jewell, a former outdoor goods executive, was confirmed in April to head the Interior Department. When Gina McCarthy steps into her new role as administrator of the Environmental Protection Agency she will face an army of lawyers trying to sway the agency as it writes rules on power-plant emissions that will form the centerpiece of the Obama administration's climate-action plan. McCarthy and the EPA will use a rarely used section of the Clean Air Act to carry out the boldest aspect of the plan President Barack Obama announced in June - slashing carbon pollution from the country's biggest source of greenhouse gas emissions, its thousands of existing power plants. The U.S. Supreme Court ruled in 2007 that greenhouse gases are a harmful pollutant, which gave the EPA the authority to use the act to regulate the climate-warming emissions. But there is little precedent for using the Clean Air Act to regulate greenhouse gases from existing sources, creating an opening for lawyers to offer their own interpretations on behalf of electricity sector clients or environmental groups. The threat of litigation has already influenced the EPA to make a technical adjustment to its proposed regulation on carbon emissions from new power plants, sources familiar with the process have said. Instead of one emissions standard that would apply to both coal- and gas-fired plants, it will set a separate less stringent standard for coal plants to enable at least some efficient facilities to be built. Obama last month set a deadline of September 20 for the agency to complete that rule, which was originally required to be finalized by April 13. The proposed rule initially required any new power plant to emit no more than 1,000 lbs. of carbon dioxide per megawatt hour, effectively ruling out new plants powered by coal without the as-yet uncommercialized carbon capture and storage technology. A legal coalition of utilities known as the Utility Air Regulatory Group (UARG), represented by the climate-law practice of Hunton and Williams, has already sued the agency, arguing that there should be separate standards for gas and coal-fired plants. Although the case was thrown out by the court because the rule has not been approved, the suit gave the EPA an early view of the utilities' legal strategy, probably prompting the agency to adjust it to thwart future challenges.

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21. New EPA Chief Defends Agency's Policies Delivering her first speech as the top U.S. environmental steward, Gina McCarthy pre-empted a frequent criticism of the Environmental Protection Agency - that the agency's regulations disrupt the economy and cost jobs. The benefits derived from rules to address climate change and protect the environment far outweigh their costs, said McCarthy in a speech at Harvard Law School. The EPA, often a lightning rod for Republican opposition in Congress, is working to develop "a new mindset about how climate change and environmental protection fits within our national and global economic agenda," McCarthy said. Embracing the need to cut carbon emissions should be seen not as a threat but as a "way to spark business innovation," she said. The federal Clean Air Act, the basis of the EPA's powers to set rules, has produced $30 in benefits for every dollar spent in its name, she added. McCarthy was confirmed after a months-long process that at one point involved a Republican boycott of a committee vote and required her to answer more than 1,000 questions posted by senators about the EPA's rulemaking processes and transparency. The speech, just a few miles from her hometown of Boston, marked the start of a nationwide tour to talk about why acting on climate change is necessary and to dispel common criticisms. McCarthy, along with Energy Secretary Ernest Moniz and Secretary of the Interior Sally Jewell, is making public appearances to help President Barack Obama roll out the Climate Action Plan he announced in June. At the heart of Obama's plan will be new EPA regulations that will target carbon emissions from existing power plants, which account for more than one-third of U.S. greenhouse gases and in many cases are fired by coal. McCarthy said the agency will try to replicate the success it had with the U.S. automotive industry, with which it collaborated to craft new fuel efficiency standards. "This is a game plan for other sectors to follow on how we can reduce emissions, strengthen energy security and develop new economic benefits for consumers and businesses," McCarthy said. In addition to close collaboration with industry, McCarthy said she will look to states and local governments that have piloted emission reduction policies and blueprints without waiting for Washington. She said the EPA would not be a leader, but a follower of states' programs to curb emissions, relying on the work they've already put into force. McCarthy also addressed one of the most controversial environmental and energy issues facing the Obama administration - the proposed Keystone Pipeline project. Responding to a question about the climate impact of the 830,000 barrel per day pipeline, McCarthy first jokingly pretended to walk away from the podium before responding. "In all seriousness, I think the best that EPA can do is to be an honest commenter on the environmental impact statement, which we've done our best to do and which we'll continue to do." An assessment of the project by the EPA released in March raised concerns about the analysis done by the State Department, which found there would be no significant effect on greenhouse gas emissions. McCarthy said the Obama administration was examining all aspects of the pipeline proposal. In an August 14th speech at the University of Colorado, Boulder, McCarthy framed climate change as “fundamentally an economic challenge” in which the right policies could cut GHG emissions without harming economic growth -- including the agency's pending GHG new source performance standards for future and existing power plants.

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At the Colorado event, McCarthy spoke about the need to shift the public conversation away from the science on whether climate change is happening, but to focus on “innovative solutions” that will reduce GHG emissions while helping the economy. McCarthy spoke of the need to “get over talking about the problem and start designing the solutions, start implementing them.” Climate change should no longer be talked about as an “ancillary environmental concern,” McCarthy said, because it's really “all about the economy, it's all about our ability to sustain life on our planet in a way that we've enjoyed.” McCarthy, who before her confirmation to head the agency ran EPA's air office, said the agency's implementation of the Clean Air Act is proof that it is possible to cut air pollutants while sustaining economic growth, citing figures that air quality improvements in 2010 alone prevented 160,000 premature deaths while the number of jobs is 90 percent higher since the air statute became law. Referencing the decision to host the climate talk on a university campus, McCarthy spoke of the role of college students in addressing climate change. Among college students, she said, there's “no dispute about climate change. They sort of just look at the science. I think it's because they're not quite as jaded as some of us. They're bright, they're looking to the future, and they know they own the future. I want to hand it to them.” Sen. Mark Udall (D-CO), who introduced McCarthy ahead of the speech, offered his support for Obama's climate plan, but added that he would be part of the push for “Congress to finally take bold action,” which would include some type of price on carbon.

22. API Seeks 'Tier III' Overhaul as States, Auto Sector Tout Fuel Rule's Benefits The American Petroleum Institute (API) is urging EPA to overhaul its "Tier III" fuel air rule to provide more time to comply, weaker gasoline sulfur limits and a better justification for the rule, while states and auto sector groups that back the proposal are challenging API-backed studies that claim major costs and minimal benefits from the rule. EPA took comment through July 1st on the proposal, and API's comments filed jointly with the American Fuel & Petrochemical Manufacturers (AF&PM) reiterate the sector's call for the agency to drop the policy entirely, reviving their long-running claims that there is a no significant health benefit basis or other reason for the rule. But the groups say that if EPA pushes ahead with the rule it should adopt a host of recommendations that could soften the final version. The rule, which EPA proposed on March 29th, would lower the existing sulfur level from 30 parts per million (ppm) to 10 ppm by 2017, a reduction the auto sector says will be critical to allow them in 2017 to manufacture vehicles that can meet the rule's strict tailpipe emission standards, as sulfur in fuel can "poison" catalytic converters. EPA will need to read through and respond to comments filed by API and AF&PM, along with the more than 164,000 other comments from the auto sector, states, environmentalists, public health groups and others, as it works to meet a non-binding target of publishing the final version of the rule in December. If EPA misses its 2013 target, it could cut into the three-year lead time the agency has said it will give refiners to bank early "credits" for complying with the rule, provisions EPA says will significantly cut costs. The Alliance of Automobile Manufacturers says its support for the rule is "entirely dependent" on the lower sulfur level and the rule being finalized by 2013.

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Many states, environmentalists and public health groups support the rule, which EPA projects will generate by 2030 health and environmental benefits between $8 billion and $23 billion, with annual costs of about $3.4 billion. EPA says that by 2030, the rule will prevent 670 and 1,700 premature deaths caused by fine particulate matter (PM2.5) and 160 to 710 ozone-related premature deaths. EPA says those benefits will come at a cost of about a penny per gallon of gasoline, though API has projected the costs will be 6 to 9 cents, with far fewer health benefits. API and AF&PM, in their comments and in studies they have sent to EPA, question the agency's projected air quality benefits, saying it has found the improvements to be "negligible," citing a recent study conducted by ENVIRON that modeled air quality benefits in summer 2022 and found very small cuts in PM2.5 and ozone compared to "Tier II." EPA based the costs and benefits of the rule by 2030, prompting Tier III advocates to question the usefulness of modeling air quality benefits only five years after the standard comes into effect and before the affected fleet has turned over to the tighter standards. The oil sector trade groups fault EPA for relying on "very few studies" in its decision to lower the average annual sulfur levels to 10 ppm, saying that none of the studies looked at the effects of sulfur levels between 10 ppm and 30 ppm. They cite a study it funded that found EPA's data analysis on the 10 ppm sulfur level used "flawed methodologies" that overstated emission impacts. API and AF&PM both say EPA should withdraw the rule to make changes to the draft regulatory impact analysis, but say if EPA does go forward, it should extend the compliance deadline from three years to five years while also changing the fuel used to certify vehicles from 15 percent ethanol (E15) to the existing 10 percent ethanol fuel blends. Other than the oil industry, the proposal received widespread support. For example:

State air officials from the Northeast offered support for the rule as proposed because under the Clean Air Act, states are preempted from setting emission limits on light-duty cars and trucks, which make up a large percentage of the pollutants causing them to be in nonattainment with the national ambient air quality standards.

EPA and states expect to see air quality benefits ahead of the rule's 2017 compliance

deadline, as refineries begin to produce low-sulfur fuel to bank early credits. Maryland air chief Tad Aburn, for example, says the rule will be critical toward helping attain federal air standards, saying the state officials "know of no other strategy that can provide the substantial, immediate and cost-effective air quality benefits."

A group of attorneys general from 12 states, the District of Columbia and attorneys

representing New York City and Chicago, said they "strongly support" Tier III and urged EPA to finalize the rule by the end of the year.

The Northeast States for Coordinated Air Use Management (NESCAUM), a non-profit that

works on behalf of air agencies in eight Northeast states, offered its support for Tier III, saying in absence of the rule, states would be forced to put tighter controls on local sources. NESCAUM in its comments urged EPA not to use E15 as the certification fuel and to tighten the proposed particulate matter standard of 3 milligrams per mile (mg/mi) down to 1 mg/mi beginning in 2025, which would align with standards in California.

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The auto sector has been largely supportive of Tier III but raised a few concerns, such as

EPA's proposal to certify vehicles with test fuel with a Reid vapor pressure of 10 psi. The industry supports certification test fuel with a Reid vapor pressure of 9 psi, which would align with California standards, according to the comments filed by the Alliance of Automotive Manufacturers.

The Emissions Control Technology Association, which represents the manufacturers of

emissions control devices used in cars mostly criticizes many of the costs and benefit studies cited by API in its comments, saying that its own studies, conducted by Navigant Economics, have found that Tier III will not increase gasoline prices and will provide the air quality benefits projected by EPA.

The National Association of Clean Air Agencies offers overall support for the rule, but says

it is concerned about certifying vehicles using E15, saying it only represents a small segment of U.S. fuels and the "prospect of it becoming a widely used automotive fuel in the future is questionable."

Paul Billings of the American Lung Association (ALA) offered the group's strong overall

support for Tier III while calling for specific changes ALA believes create further air quality benefits, such as setting a 20 ppm sulfur cap on gasoline as it leaves the refinery and 25 ppm sulfur cap downstream. EPA proposed keeping the existing 80 ppm refinery cap and 95 ppm downstream cap, or lowering them to 50 and 65 ppm, respectively, but also sought comment on lowering the two caps to 20 and 25 ppm. Billings said finalizing the rule with the lowest refinery and downstream caps would provide the "maximum" air quality benefits.

The Sierra Club did not push for the lowest refinery and downstream sulfur cap, but instead

is asking EPA to lower the caps to "at least 50 ppm at the refinery gate and 65 ppm downstream." The group, which supports Tier III, refuted API for what it said were "scare tactics" claiming gas prices would skyrocket, saying independent studies have found the rule will cost less than a penny per gallon

23. U.S. Appeals Court Partially Upholds Ozone Pollution Rule

A federal appeals court on Tuesday partially upheld U.S. Environmental Protection Agency regulations issued by former President George W. Bush's administration that set standards for ozone pollution. The U.S. Court of Appeals for the District of Columbia Circuit sent a portion of the regulations back to the agency for further consideration but left the entirety of the rule in place while the revisions are carried out. The 2008 rule was challenged by states, industry groups and environmental groups, with some saying it was too strict and others that it was too lenient. The ruling was a partial victory for environmental groups that said it was not stringent enough, although the court did not embrace all their arguments. In the unanimous decision by a three-judge panel, the court upheld the so-called primary air quality standards designed to protect public health but sent the secondary standards that are required to protect the vegetation, crops and animals back to the EPA for revision. The court held

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that the EPA had "failed to determine what level of protection" was required to meet the requirements of the Clean Air Act. The decision comes at a time when the EPA is considering new ozone standards. The agency was on the verge of issuing a new rule in September 2011 but the White House rejected the proposal. Environmental groups had pointed to documents that EPA's Clean Air Scientific Advisory Committee, or CASAC, provided to the agency before George W. Bush's administration set both standards at 75 ppb in 2008. CASAC recommended a primary standard of between 60 and 70 ppb. But in a 48-page order for the court, the three-judge panel ruled that the agency was not required to adopt the CASAC recommendations. Further, the judges noted that it is the agency's call when there remains some scientific uncertainty. "Although both CASAC and EPA must exercise public health policy judgment when confronted with scientific evidence that does not direct it to a specific outcome, it is to EPA's judgment that we must defer," they wrote. "EPA's invocation of scientific uncertainty and more general public health policy considerations satisfies its obligations under the statute." Ozone is a major component of smog, and the advocates -- including the Natural Resources Defense Council, American Lung Association and Environmental Defense Fund -- argued that a trove of scientific research indicates that ozone at a level of 75 ppb poses significant health threats, particularly to vulnerable populations such as children and pregnant women. They also noted that EPA's ozone NAAQS is the foundation of many of the agency's air programs -- including efforts to address pollution that drifts across state lines. So if the ozone NAAQS is too weak, the groups argue, those programs are also failing to protect public health. EPA is already reviewing the standards as required by the Clean Air Act every five years. Most expect the agency to set a standard between 60 and 70 ppb, and EPA is supposed to issue its proposal by the end of this year and finalize it next year. Many health advocates, however, expect EPA's schedule for the new standards to slip into 2015, and several groups are filing litigation to finalize a deadline for the agency.

24. U.S., China Agree To Cut Emissions from Vehicles, Coal The United States and China, the world's top emitters of greenhouse gases, have recently agreed to five initiatives to cut carbon output from the largest sources, including heavy duty vehicles, manufacturing and coal-fired plants. The U.S.-China climate change working group, which officials from both countries formed in April, will work with companies and non-governmental groups to develop plans by October to carry out the measures aimed at fighting climate change and cutting pollution. The initiatives are also aimed at improving energy efficiency, collection and management of greenhouse gas data, and promoting electric grids to carry more power from renewable energy. The group agreed to the measures at the U.S.-China Strategic and Economic Dialogue held at the State Department. Secretary of State John Kerry and Treasury Secretary Jack Lew hosted a Chinese delegation, led by State Councilor Yang Jiechi and Vice Premier Wang Yang, at the talks that covered both economics and wider geopolitical issues. The climate agreements will concentrate on improving technologies, and will not be binding and will not seek to cut emissions by specific volumes. Still, the hope is any cooperation could help

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lend support to wider international talks on greenhouse gas reductions and help finalize a global treaty to replace the Kyoto Protocol on climate change by 2015. "On the one hand it's not suddenly going to transform the negotiations, I'm absolutely not saying that, but ... it will project something positive that I think will be helpful," U.S. climate envoy Todd Stern told reporters in a teleconference. China and the United States are responsible for about 43 percent of global greenhouse gas output. Increasing the ability of the two countries to capture carbon emissions from coal-fired plants and to bury them underground was also the focus of one of the agreements. The goal is to move from the research and development phase to large scale demonstration projects, Stern said. "It's certainly not the case that we are going to be financing large-scale CCS (carbon capture and storage) plants in China, per se, but rather to try to spur the development of them there and also here." This effort builds on an agreement last month by U.S. President Barack Obama and his Chinese counterpart Xi Jinping to cooperate in phasing out production and consumption of gases used in refrigerants and air conditioners. The so-called hydrofluorocarbons, or HFCs make up roughly 2 percent of global greenhouse gas emissions, but use of the chemicals is rising at a rate of up to 9 percent a year. Stern said China and the United States are trying to develop alternatives to HFCs, not all of which are fully available. The officials also committed to reduce emissions of CO2 and black carbon from heavy duty vehicles. This will be achieved through stricter fuel efficiency standards, cleaner fuels and emissions control technologies as well as greener logistics. The U.S.-China Climate Change Working Group has asked specific agencies and programs in both countries to develop implementation plans for carrying out the five initiatives. The U.S. Environmental Protection Agency, China's National Development and Reform Commission (NDRC), and eight other agencies should develop the plans by October for the joint efforts to reduce air pollution and greenhouse gas emissions, the report said. The implementation plans will detail the role of each agency in achieving the five goals: (1) reducing emissions from heavy-duty trucks and other vehicles; (2) promoting carbon capture, utilization, and storage; (3) increasing energy efficiency in buildings, industry, and transportation; (4) improving greenhouse gas data collection and management; and (5) promoting smart electricity grids. “The important initiatives we've announced on climate change and China's pledge to enhance the transparency of its energy data reflect our shared commitment to securing sustainable, affordable energy and reducing greenhouse gas emissions,” Deputy Secretary of State William Burns said July 11 during closing statements for the dialogue. The working group's report said EPA and the U.S. Department of Transportation should work with China's NDRC, its Ministry of Industry and Information Technology, its Ministry of Environmental Protection, and its Ministry of Transport on the joint initiative on cutting emissions from heavy-duty vehicles. The two countries also committed to intensify efforts under the U.S.-China 10-Year Framework for Cooperation on Energy and the Environment to improve energy efficiency across industry and

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buildings. Plans for their work will be discussed at the next U.S.-China Energy Efficiency Forum in September, the report said. Cooperation on smart grid technology and policy issues will occur through existing partnerships among the Energy Department, the Federal Energy Regulatory Commission, and the Trade and Development Agency and China's National Energy Administration, the report said. EPA and China's NDRC will also be asked “to work cooperatively on capacity building for collection and management of greenhouse gas emissions data.” “Working together and with others, such as the World Bank's Partnership for Market Readiness, the United States and China can build models that may also benefit other countries,” the report said. Both countries have said they will also seek input on the five initiatives from the private sector and nongovernmental organizations.

25. House Panel Approves EPA, Interior Cuts On July 23rd, The House Appropriations Subcommittee on Interior, Environment, and Related Agencies approved a $24.3 billion funding bill that would cut the Environmental Protection Agency's budget in fiscal year 2014 by 34 percent and prevent the agency from moving ahead with planned regulations to address climate change. The bill, approved on a vote of 7-4, would make large cuts to the clean water and drinking water state revolving funds and EPA's operational budget, and would completely eliminate funding for 20 EPA and Interior Department Programs, including the brownfields program. The legislation also contains 31 legislative riders, including provisions that would restrict EPA from using appropriated funds to implement new source performance standards for new and existing power plants, a key part of President Obama's recently announced climate change plan. The bill also would restrict EPA from moving ahead with proposed Tier 3 gasoline and vehicle emissions standards and several planned rules on regulating water pollution.

26. Pollution Regulators Set Sights on Off-Road Vehicles The California Air Resources Board has moved to tighten pollution controls on most new off-road vehicles even while they sit idle in the garage. The regulation will start with 2018 models and is to be phased in over four years; existing vehicles are exempt. The rule attacks vapor emissions from gas lines and fuel tanks rather than tailpipes, which already are regulated. There were 850,000 off-highway recreational vehicles registered in California according to a Department of Motor Vehicles tally at the end of 2012. Regulators say stricter controls are needed as they struggle to comply with federal clean-air standards, particularly in Southern California and the San Joaquin Valley. The new controls will reduce harmful evaporative emissions from new vehicles by 70 percent when compared to the current models, they say. But off-road enthusiasts worry that the cost of compliance — estimated at $216 to $465 depending on the vehicle by 2018 — will scare buyers away just as the market rebounds. On the other hand, regulators say sales have perked up, and that a 2018 launch allows the industry to prepare given its usual 18-month lead time for research and development before introducing new models. Delays also would add more emissions into the atmosphere for another two years.

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In 2012, California dealers sold a combined 14,012 ATVs and motorcycles — the two most popular off-road vehicles. In 2011, those sales amounted to just 10,572, according to DMV figures. The regulation is aimed at evaporative emissions that escape from the fuel lines and gas tanks, whether the vehicle is being ridden at Ocotillo Wells or parked for the workweek. Fifty-nine percent of the evaporative emissions occur when the vehicle is parked, compared to 29 percent that come from the tailpipe, regulators say. Under the rule, manufacturers will most likely have to use newer materials to prevent permeation from fuel lines and gas tanks. There are also carbon canisters that can trap particles before escaping into the atmosphere — a technology used in cars for some time. Another tool is the pressure relief valve on the gas tank vent that can hold in vapors. Anti-tipping technology to prevent spills also must be added to the vehicles. Evaporative emissions are “reactive organic gases,” one of which is benzene that can be traced to an increased risk of cancer and neurological damage. Off-road vehicles account for nearly three-quarters of those gases. Under the regulation, a newly bought off-road motorcycle, for example, could produce no more than 1 gram of these reactive organic gases per day starting in 2018. Currently, 10 to 15 grams escape from off-road motorcycles. In contrast, the average new car in 2018 will be responsible for just one-third of a gram. Affected vehicles include dirt bikes, ATVs, off-road utility vehicles and sand cars, among others. Professional racing motorcycles, snowmobiles, gas-fueled golf carts and go-carts are exempt.

27. California Weighs Refinery GHG Rules Following Efficiency Audit Results California Air Resources Board (CARB) officials say they continue to weigh the potential development of first-time state greenhouse gas (GHG) rules for refineries following the release of a GHG and energy efficiency audit of the facilities, which could boost advocates' calls for state GHG rules in lieu of an EPA refinery GHG rule. However, board officials told a July 9 public meeting that they are unlikely to seek new measures targeting heavier crude oil refining in California as long as refineries are meeting existing emission limits in local air district permits. Environmentalists have recently raised concerns about an expected increase in heavier crude oil refining in the state and what that may mean for GHG emissions and local air quality, fearing the oil will lead to GHG increases. The fight over potential future regulation of refinery GHGs by the California Air Resources Board (CARB) comes as EPA is delaying its development of climate rules for the sector. Under a consent decree with some states and environmentalists, the agency is required to issue new source performance standards to cut refineries' GHG emissions -- but EPA has missed its decree deadline for a proposal and the fate of the rule is unclear. As a result, advocates and opponents of climate policies for the refining sector are likely to closely track developments in California as the state's rules often serve as a model for other states or for EPA.

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CARB last month released for public review a refinery sector public report required under the board's "Regulation for Energy Efficiency and Co-Benefits Assessment of Large Industrial Facilities," adopted in 2010. The rule requires the largest industrial facilities in California to conduct a one-time energy efficiency assessment of GHG sources to determine potential emission-reduction opportunities, including those for criteria pollutants and toxic air contaminants. CARB's report says the total GHG reductions associated with projects undertaken by refineries to date is estimated to be about 2.8 million metric tons of carbon-dioxide equivalent per year. About 78 percent of the estimated GHG reductions are from projects completed. About 22 percent of estimated GHG reductions are from projects that are scheduled or under investigation, CARB says. At the July 9 meeting to discuss the refinery sector report, CARB Stationary Source Division Chief Dan Donohoue said the agency will next release a "phase 2" report to elaborate on findings from the audit. After that, CARB will initiate a "phase 3" to determine what new GHG or energy efficiency measures could be required at refineries. "Our goal is to finish the findings report by the end of this year . . . and then have CARB follow-up actions begin," Donohoue said. "So we'll continue to pursue looking at what opportunities there are following the . . . process that we've talked about."

28. Energy Group Seeks EPA Rule Fix to Bolster Methanol as Alternative Fuel An energy security group is urging EPA to revise Clean Air Act engine anti-tampering rules in order to allow conversion of all light-duty vehicles to alternative fuel vehicles that can operate on methanol, as part of the group's bid to boost reliance on domestically produced methanol from shale gas and biomass rather than foreign oil. The push by the Fuel Freedom Foundation -- led by Reagan-era EPA air chief Joseph Cannon -- would not require Congress to amend the air law, as the agency has existing power to revise its regulations on anti-tampering, which are designed to prevent changes to vehicles that would weaken their emissions controls. EPA can fine an individual or company thousands of dollars per violation for making modifications to a vehicle, sources say. As a result, vehicle conversion companies could face stiff fines for reconfiguring a vehicle engine to enable it to burn methanol rather than gasoline, the Fuel Freedom Foundation says. The group therefore wants EPA to revise its anti-tampering rules to allow conversion of light-duty vehicles to run on methanol as alternative fuel. There is precedent for EPA making fixes to its years-old anti-tampering rules, which originally stemmed from section 203(a)(3)(a) of the air law that prohibits "any person to remove or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine" in order to comply with EPA rules. For example, EPA last year modified the regulations to provide guidance on conversions for compressed natural gas and propane fuel vehicles. In August 2012 the agency made final new regulations that streamline the process through which a vehicle conversion company can demonstrate ongoing compliance with air standards. The Fuel Freedom Foundation is seeking a similar rule for methanol-fueled vehicles, arguing that vehicles can be cheaply and easily converted to run on high-methanol fuel blends. The group wants EPA to allow retrofits of older and newer model vehicles to use up to 100 percent methanol in current vehicle engines. The group says a rule change could spur increased conversions to run on high methanol blends and increase the development of the alternative fuel from a variety of feedstocks including biogas, biomass and natural gas.

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The push to boost methanol's use as a fuel comes as industry groups are raising concerns with EPA's revised draft Integrated Risk Information System assessment of the substance -- an analysis that could be used to justify more stringent regulations of methanol. Industry critics of the draft review have argued that the agency failed to appropriately consider that methanol occurs naturally in the human body and industry is urging officials to craft an approach for assessing such endogenous chemicals before completing the assessment.

29. EPA Delay on Greenhouse Gas Biofuel Rules Canceled by Court A decision by the U.S. Environmental Protection Agency to delay for three years making rules to curb carbon dioxide emissions from biofuels was thrown out by the U.S. Court of Appeals in Washington. The EPA failed to spell out what the delay, known as the deferral rule, would accomplish, according to a 2-1 ruling by a three-judge panel. “We simply have no idea what EPA believes constitutes ‘full compliance’ with the statute,” U.S. Circuit Judge David Tatel wrote for the majority. “In other words, the deferral rule is one step towards ... what?” In a concurring opinion, Judge Brett Kavanaugh said the EPA was improperly treating carbon dioxide emissions from ethanol and other biofuels differently from other sources of the gas. “EPA simply lacks statutory authority to distinguish biogenic carbon dioxide from other forms of carbon dioxide” for regulatory purposes, Kavanaugh wrote. Judge Karen LeCraft Henderson dissented, writing that “I believe EPA can -- and should -- defer regulation until it has the time it says it needs to study and resolve the issue it is charged with regulating.” The court's decision cited the Supreme Court case Massachusetts v. EPA, the landmark 2007 decision in which the justices found that carbon dioxide is a pollutant that could be regulated under the Clean Air Act. "There is no statutory basis for exempting biogenic carbon dioxide" from the EPA's rule making process, Judge David Tatel wrote for the court. In a statement responding to the decision, the EPA said it "will review the decision to determine any next steps." Biogenic carbon dioxide emissions are generated from processes including incinerating wood chips and residue like bark and sawdust to make electricity, decomposition of waste in landfills and fermentation during ethanol production. These sources release much less carbon dioxide than coal-fired power plants or other polluters, but the biofuel sector is rapidly expanding and critics want much tighter regulation.

30. British Columbia's Fuel Use Fell Following 2008 Start of Carbon Tax, New Report Says

British Columbia's introduction of a carbon tax in 2008 was followed by a fuel consumption drop of 17.4 percent per capita and allowed the province to have Canada's lowest income tax rates as of 2012, according to a report by an Ottawa-based think tank. The report, BC's Carbon Tax Shift After Five Years: Results—An Environmental (and Economic) Success Story, was written for the Sustainable Prosperity think tank. The lead author was Stewart Elgie, director of the Institute of the Environment at the University of Ottawa. The report’s key findings are that:

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Since the carbon tax took effect (July 1, 2008), BC’s fuel consumption has fallen by 17.4%

per capita (and fallen by 18.8% relative to the rest of Canada). These reductions have occurred across all the fuel types covered by the tax (not just

vehicle fuel) BC’s GDP kept pace with the rest of Canada’s over that time The tax shift has enabled BC to have Canada’s lowest income tax rates (as of 2012). The tax shift has benefited taxpayers; cuts to income and other taxes have exceeded

carbon tax revenues by $500 million from 2008-12. “Based on a review of the available evidence, this paper concludes that BC's carbon tax shift has been a highly effective policy to date,” said the report, which was released on July 24th. “It has contributed to a significant reduction in fossil fuel use per capita, with no evidence of overall adverse economic impacts, and has enabled BC to have Canada's lowest income tax rates.” The report noted that while the findings show a correlation between fuel use and the carbon tax, they cannot show conclusively that the tax caused the shift. However, it said the data were consistent with similar results from several European countries.

31. Cruise, Freight Shipping Sectors Divided On Compliance With EPA Air Rule Cruise and freight shipping companies are divided over strategies for complying with EPA's ship emissions rule setting caps on sulfur in fuel, with one major cruise line quitting a port to minimize time spent complying with the rule and another seeking alternative compliance options -- though freight companies oppose any flexible compliance options. The various divisions suggest potential hurdles for EPA as it works to implement its rule that adopts fuel sulfur limits the United States agreed to at the International Maritime Organization (IMO). EPA's rule imposes a North American Emissions Control Area (ECA), a zone extending up to 200 miles off the U.S. and Canadian coasts within which ships must burn low-sulfur fuel or adopt equivalent measures to reduce emissions. Further complicating implementation of the ECA is an IMO working group's recent push to delay an existing provision in the global shipping emissions agreement for new ships within an ECA to start using selective catalytic reduction (SCR) technology to cut nitrogen oxides (NOx) emissions starting in 2016. The working group at a May 15 meeting in London decided to delay the requirement until 2021. The move has to be confirmed by a vote of a senior IMO panel in the spring. And EPA issued a statement in May saying that it plans to forge ahead with implementing the requirement, saying, "The amendment is not yet in effect. EPA remains strongly committed to ensuring the important health and environmental benefits for the United States will be achieved through the . . . NOx standards in the North American ECA." Even as EPA pushes ahead with implementation of the various provisions of the global agreement on shipping emissions, at least one major cruise line is seeking to avoid being subject to the ECA. Carnival Corp., the country's largest cruise operator troubled by recent mechanical failures on its ships, announced on June 27th that it will pull one of its ships, the Carnival Pride, out of its current home port of Baltimore in November 2014, and send the ship to Tampa, FL, at least until spring 2015. It follows a protest by Carnival to Maryland Gov. Martin O'Malley (D) over EPA's fuel sulfur limits, which the company says are unreasonably expensive to meet given that ships bound for Baltimore must steam up the Chesapeake Bay, entirely within the ECA.

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Carnival is in talks with EPA in an effort to win a waiver from the ECA rules while it tests pollution control technology that could provide equivalent emissions cuts to fuel sulfur limits. A rival company, Royal Caribbean Cruises Ltd, has already won some alternative compliance options from the agency. Carnival has suggested use of "scrubbers" to remove sulfur dioxide (SO2) from ship exhaust as an alternative to using ultra-low sulfur fuel, according to sources. Previously, the company and industry body Cruise Lines International Association (CLIA) championed a population- weighted emissions averaging compliance alternative to allow ships to use higher sulfur fuel than required under the ECA when steaming near thinly-populated areas, but require them to burn low-sulfur fuel near populous areas. Although lawmakers from states with a significant cruise line presence including Sen. Lisa Murkowski (R-AK) have backed the concept, EPA has repeatedly said the option is unacceptable because it would unfairly expose residents of sparsely-populated areas to higher pollution levels than others. Both Carnival and Royal Caribbean are both pressuring EPA for compliance alternatives. However, Royal Caribbean has supported a form of emissions averaging with no population weighting. EPA has reportedly granted the company a permit allowing it to average SO2 emissions over six ships, rather than have each ship comply individually. The U.S. government is promoting this fleet-averaging approach at the IMO, but several countries are apparently resisting it, insisting that the fuel sulfur requirements should apply to individual ships. Litigation over the ECA continues, meanwhile, in a case brought by Alaska against the State Department, Coast Guard and EPA. The state claims the federal government lacked congressional authority to enter into the international agreement that led to the zone's creation. Oral arguments have not yet been set in the case, State of Alaska, et al. v. Kerry, et al., which continues in the U.S. District Court for the District of Alaska. EPA has identified ship emissions as a significant source of air pollution in ports, but also hundreds of miles inland, so losing the ECA emission reductions would threaten states' ability to meet federal air quality standards. The federal government therefore continues to fight the proposed delay in the SCR standards. The United States can block the measure if it can muster one third of the votes cast by countries at the upcoming IMO panel meeting, but that the prospects for this remain unclear. At the center of the controversy is a dispute between Russia and European Union countries over the status of the Baltic Sea, which the Europeans wish to designate an ECA, imposing NOx limits on all shipping including Russian vessels.

32. North American Commission to Focus on Transport, Climate Change, Hazardous Waste

On July 11th, top environmental officials from the United States, Canada, and Mexico called for the three countries to continue joint efforts to address environmental issues including transportation emissions, climate change, and the movement of hazardous wastes. Those three issues will be the focus of the trilateral Commission for Environmental Cooperation's work over the coming year as outlined in the agency's operational plan for 2013-2014, the commission's governing council said in a communiqué at the end of their annual meeting, held in Los Cabos, Mexico July 10-11. The CEC Council, established under the environmental side agreement to the North American Free Trade Agreement, is composed of the three countries' environment ministers. Mexican Environment and Natural Resources Secretary Juan Jose Guerra hosted the July 11 meeting,

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with Environmental Protection Agency Acting Administrator Bob Perciasepe representing the United States and senior Environment Canada official Dan McDougall representing Canada in the absence of Environment Minister Peter Kent.

33. EPA Airport Emissions Data May Bolster Push to Ban Leaded Aviation Gas EPA monitoring data show that lead emissions near two of 17 airports exceed the agency's national ambient air quality standard (NAAQS) for the pollutant, which could help environmentalists in their push for EPA to craft a finding on whether leaded aviation gas (avgas) poses a risk to human health that warrants phasing out lead in avgas. The two California airports -- the San Carlos Airport and the McClellan-Palomar Airport -- had airborne lead levels of 0.33 micrograms per cubic meter (ug/m3) and 0.17 ug/m3 over a three-month rolling average, exceeding EPA's health-based NAAQS of 0.15 ug/m3. On June 19th, EPA posted the data, collected at airports expected to have high lead levels. Gasoline containing the lead-containing additive tetraethyl lead has been phased out in cars and trucks but continues to be used in the fuel to boost the octane to the levels required by many small piston-engine aircraft. High octane prevents unintended combustion of gasoline, allowing improved performance of engines. EPA in July 2012 denied a Friends of the Earth petition it was working to conduct the complex modeling, monitoring and other work necessary to determine if lead emissions from piston-engine aircraft endanger public health or welfare. The agency in a June 19 "program update" releasing the air monitoring data reiterated its previously stated goal of making a final endangerment determination by mid-to-late 2015. Environmentalists who had sued EPA seeking a court-ordered deadline to make an endangerment finding are still weighing their legal options after a U.S. District Court for the District of Columbia Circuit judge ruled on March 27th that the Clean Air Act does not impose a mandatory duty on the agency to make an endangerment finding for aviation emissions, meaning there could be no "unreasonable delay" as environmentalists had claimed. Although EPA denied the petition, it is gathering data on airport lead emissions. The data collected from the airports will be used "to evaluate the questions of endangerment," EPA said when it denied the petition. EPA's finding of high lead levels prompted the Federal Aviation Administration (FAA) to issue a memorandum on June 19th that offered guidance to airport operators on how to mitigate risks to the public from lead emissions from avgas. The FAA offers a number of "short-term" ways to reduce risks from lead emissions, but the options it offers are only being "encouraged" and should be carefully considered so it does not affect the "safe and efficient movement of aircraft," the memo says. FAA says that airport operators can consider operational changes, implement vapor controls at airport fuel storage and dispensing systems and shift airport fences to avoid unnecessary outdoor exposure to the public. The memo also says that if existing run-up areas cause propeller wash to be directed into areas where the general public could be exposed, the airport operator should consider shifting run-up activities so exhaust is directed elsewhere. For a longer-term solution, the FAA memo says it has been "actively working" with the aviation industry and EPA to develop a "drop-in" unleaded fuel replacement by 2018 that could be used in existing aircraft without modification. The FAA on June 10 asked fuel producers to submit proposals to help aircraft transition to unleaded fuel, saying that by September 1, 2014, it will

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select suppliers to create 100 gallons of fuel for "phase one" laboratory testing and 1,000 gallons for "phase two" testing.

34. GM, Honda Latest to Join Forces on Fuel Cells General Motors and Honda Motor Co. will partner to develop a common system for fuel cell vehicles with the goal of getting them into showrooms by 2020, the companies have announced. GM and Honda, both pioneers in fuel cell technology, said their partnership will cut development costs, partly by consolidating their supplier bases for fuel cell components. And they will work to expand refueling infrastructure, considered the biggest barrier to widespread consumer adoption. The agreement is the latest in a string of alliances created to share the cost of developing a promising but expensive alternative-fuel technology. In January, Toyota Motor Corp. and BMW AG paired up on a fuel-cell production alliance. Daimler AG, Ford Motor Co. and Nissan Motor Co. that same month said they would jointly develop a line of affordable fuel cell electric cars for sale as early as 2017. A fuel cell vehicle creates electricity from a chemical reaction between hydrogen and oxygen in the car's fuel-cell stack. Similar to a battery powered vehicle, the car uses electric motors to propel the car and batteries to store energy. Only water vapor is emitted through the tailpipe. The cost of developing fuel cell vehicles is high partly because of platinum that is used in the fuel-cell stacks and the complexity of onboard storage of gaseous hydrogen, which requires expensive, carbon fiber storage tanks. GM and Honda executives say they'll be able to commercialize fuel cell vehicles faster and at less cost than if they worked separately. "As the two established leaders in advanced fuel cell technology, when we combine our talents and expertise, we believe that together we can and will accomplish more than anyone else can," GM Vice Chairman Steve Girsky said in prepared remarks for a speech to announce the agreement. The companies said that their engineers will work side-by-side to create a common system for use by both automakers. They will share technology already developed and slated for commercial use, including the next generation of Honda's FCX Clarity, which it plans to launch in Japan and the United States in 2015. GM and Honda were among the first automakers to develop and produce fuel-cell vehicles. Since 2002, Honda has leased 85 fuel cell vehicles, dubbed FCX, and has accumulated promising data from their real-world use, the company said. In 2007, GM launched a fleet of 119 hydrogen-powered Chevy Equinox crossovers for consumers to test in the Los Angeles, New York and Washington, D.C., areas. The fleet has racked up nearly 3 million miles of real-world use for evaluation by GM engineers. The two automakers will also develop a refueling infrastructure that will be crucial for consumer acceptance and the long-term viability of fuel-cell vehicles. Despite the high cost of refueling stations -- $1 million to $2 million -- automakers are pursuing the technology as part of a broad product approach to meeting stiffer CO2 regulations. Hybrid, plug-in hybrid and battery-powered vehicles are also part of the approach.

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The partnerships come after the failure of electric cars to meet sales expectations, despite heavy subsidies worldwide. And while hybrids have gained ground, more is needed to meet the new emissions targets. Environmentalists are wary that a pact between Honda and General Motors to work jointly on developing hydrogen fuel-cell vehicles (FCVs) might mean the automakers will pull back on zero-emission plug-in battery-electric vehicle production, which advocates argue could delay expected reductions in greenhouse gases (GHGs). Honda and other vehicle manufacturers have noted the advantages of fuel-cell technology over battery-electric cars, such as a much longer driving distance before refueling, short refueling time and the ability to use the technology in small, medium and large vehicles. A GM spokesman says the company “is pursuing a range of propulsion systems and has committed to at least 500,000 vehicles with some form of electrification being part of our vehicle portfolio by 2017. At the end of the day, a fuel cell-powered vehicle is still an electric vehicle. It uses a different source to generate electricity.” But some advocates fear that the companies -- particularly Honda -- are putting too much of zero emission vehicle (ZEV) research and investments into FCVs at the expense of developing plug-in battery electric vehicles, especially for plans to comply with the California Air Resources Board's (CARB) ZEV mandate regulation. CARB's ZEV rule requires automakers to ramp up the sale of plug-in battery-electric vehicles and hydrogen fuel cell vehicles in the coming years to reach 1.4 million by 2025, and is a cornerstone of the state's efforts to cut GHG emissions in the short- and long-term. The 2025 vehicle sales requirement amounts to about 15.4 percent of total new car sales that year. EPA has approved the rule, clearing the path for other states to adopt it. Ten states have adopted the California regulations under section 177 of the Clean Air Act, which allows other states to adopt California's stricter-than-federal motor vehicle standards. They are Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island, Vermont, Maryland, New Mexico and Oregon.

35. Ford to Offer F-150 Pick-Up That Can Run On Compressed Natural Gas Ford Motor Co will offer this fall an F-150 pickup truck that can run on compressed natural gas to take advantage of the resurgence in truck demand. U.S. demand for trucks is quickly growing, stoked by strength in the housing and oil industries. U.S. sales of full-size pickups are increasing at almost three times the pace of the overall industry. The appeal of compressed natural gas as an alternative to gasoline is its relatively low price and growing abundance, thanks to fracking, but a lack of refueling stations is a liability. The cost of a 2014 F-150 with a 3.7-liter V6 engine that can run on both natural gas and gasoline can cost nearly $10,000 extra, depending on fuel-tank capacity. Ford said CNG sells for an average of $2.11 per gallon of gasoline equivalent. The national average for unleaded regular fuel is $3.66 per gallon, the company said. The F-150 is Ford's eighth vehicle in its CNG-ready lineup. Ford also offers this option in its Transit and E-Series vans as well as its F-350 trucks.

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The automaker said it is "on pace" to sell more than 15,000 CNG-equipped vehicles, up 25 percent from 2012. One recent client was AT&T, which bought 650 F-350 trucks with the CNG option.

36. Foes of Obama Climate Policy Prepare Battle Over Cost of Carbon Three months ago, the Obama administration made a little-noticed but potentially pivotal move in the stepped-up fight against climate change: it boosted the U.S. government's official estimate of the future economic damage caused by carbon pollution. After its first review, a panel of technical experts from 11 government agencies raised the so-called "social cost of carbon," known as SCC. The measure is used by many arms of the U.S. government to determine the financial benefits of new regulations since 2010. The new 2020 forecast of $43 a ton was a 58 percent jump from the previous estimate, made in 2010. The issue is to be reviewed biannually. The move should make it much easier for the Environmental Protection Agency and other federal bureaus to enact tougher measures to crack down on emissions by showing that the greater benefits of such measures will justify their costs. But the change, both made and announced quietly, has drawn intensifying scrutiny. Opponents of President Obama's newly invigorated climate change strategy are targeting the SCC in Congress -- and possibly in court -- in their efforts to knock back more rules. They argue that the method and methodology for calculating the SCC is opaque. Attacks against the SCC are expected to intensify as Obama launches the next steps of his Climate Action Plan, which relies heavily on executive action to combat pollution from power plants, the biggest source of U.S. carbon emissions. The EPA is to publish its new standard for carbon emissions from newly constructed power plants on September 20 -- likely relying on higher SCC figures to justify the cost. New standards for existing power plants are due by June 2014. The revised SCC may also have an impact on major fossil fuel initiatives, such as the Canada-to-U.S. Keystone XL pipeline, if the administration decides to factor it into its decision on approving the project. A new calculation could mean that the project's societal costs outweigh its benefits. On August 1st, just before members left Washington, the Republican-led House of Representatives passed a measure introduced by Rep. Tim Murphy (R-Pa.) that would prevent the EPA from using the SCC in rulemaking without congressional approval. More recently a conservative legal group filed a petition to the Energy Department to reconsider its use. The SCC is a notional figure used in rule-making that estimates the economic damages associated with a rise in carbon emissions. It accounts for the effect of climate change in such areas as agricultural productivity and property damage from increased flood risk. A panel of experts from nearly a dozen agencies, including the EPA, Energy Department, Department of Treasury and Office of Management and Budget determines the so-called cost of carbon. The group used three different academic models to develop its estimates that "combine climate processes, economic growth, and interactions between the climate and the global economy into a single modeling framework," Howard Shelanski, head of the Office of Information and Regulatory Affairs, or OIRA, testified to Congress last month.

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Critics were also angered with the way that the SCC figure was released: in a late-May blog post by Obama's energy and climate adviser, Heather Zichal, to announce the roll out-of new Department of Energy efficiency standards for microwave ovens. She said the new standards would result in $4.6 billion in net benefits, based on the revised SCC figure. A spokesman for the White House Office of Management and Budget, said the reason the figure was released then was because it only "became available during interagency review of the final rule." Opponents also said they had not been given time to provide input or respond to the new figure before it was implemented. OIRA's Shelanski defended the transparency of the inter-agency process in his congressional testimony, saying: "Agencies using the SCC values in rulemakings received extensive public comments."

37. House Panel Subpoenas EPA for Air Pollution Data In a rare step, the science committee of the U.S. House of Representatives has voted to subpoena the Environmental Protection Agency (EPA) for data from key studies used to justify air pollution regulations. Following a heated exchange of letters between Committee Chair Lamar Smith (R-TX) and ranking member Eddie Bernice Johnson (D-TX), the committee approved its first subpoena in 21 years. The vote was strictly along party lines, with Democrats opposing the measure. The information in question includes the underlying data in a 1993 paper considered to be groundbreaking work on the impact of air pollution. In the so-called Six Cities Study, Harvard researchers followed more than 8000 participants for 14 to 16 years and found an association between death rates and particulate matter, or soot, in the air. The study informed EPA’s 1997 decision to tighten its air quality standards and continues to underpin Clean Air Act regulations. Smith has repeatedly requested that EPA hand over raw data from the Six Cities Study and from a related (and much larger) American Cancer Society study known as “Cancer Prevention Study II,” plus all subsequent reanalysis of the studies. He accused the agency of using “secret science” to justify environmental regulations. Smith gave EPA Administrator Gina McCarthy an ultimatum in a 22 July letter, threatening a subpoena if the information—which would include personal health information from study participants promised confidentiality—wasn’t turned over by the end of the month. Johnson responded to Smith’s subpoena threat with outrage. In her letter, she claimed that his evidence for questioning the validity of the studies was shoddy and that a subpoena would violate the trust of hundreds of thousands of Americans who had participated in the Six Cities Study and other research included in the subpoena. She demanded that Smith clarify who would receive the data and for what purpose. In his response, the chairman acknowledged that the data would need to be “de-identified” to protect the privacy and health information of the participants. C. Arden Pope of Brigham Young University in Provo, Utah, one of the authors on the Six Cities Study, says that turning over what Smith requests would undoubtedly violate the confidentiality agreement made with participants. “It’s extremely hard to give a data set that will allow you to replicate the results in these studies that doesn’t include information that then allows you—with an Internet search of obituaries—to quickly figure out who the people were,” he says.

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Smith also explained in his letter that he intended to share the data with “independent scientists for review.” But Johnson accused Smith of intending to pass the data to “industry hacks” who would try to discredit the research for financial gain. According to the subpoena that Smith signed following the vote, EPA now has until 19 August to turn over all relevant data. The agency has previously said it has provided Smith with all the relevant material that it has. Subsequently, additional documents changed hands late on 19 August, the deadline set by the subpoena. But neither side is saying exactly what the documents included, or predicting whether they will satisfy demands made by the panel’s Republican majority. Meanwhile, EPA also responded to a separate request for data related to other air pollution studies from Republican members of the Senate Environment and Public Works Committee. The release of information related to a 2009 study is “the first in what is anticipated to be a series of responses,” panel Republicans said in a statement.

38. House Readies Climate Hearing A House Energy & Commerce panel is asking EPA Administrator Gina McCarthy and the heads of a dozen other federal agencies to testify next month about their new and existing climate change policies, creating one of the first venues for Congress to investigate President Obama's second-term climate agenda since he unveiled it in June. Rep. Ed Whitfield (R-KY), chairman of the committee's energy and power panel, sent letters on August 6th to EPA, the Energy Department, the State Department and other agencies asking their top officials or subordinates to testify at the panel's Sept. 18 hearing and asking a series of questions about the agencies' new and existing climate policies. The hearing, titled “The Obama Administration's Climate Change Policies and Activities,” is slated to be held just two days before EPA is required to repropose its greenhouse gas (GHG) limits for newly constructed power plants. This will almost certainly prompt tough questions from Whitfield and others, who have long charged that EPA's pending rules are a key part of the administration's “War on Coal.” Other high-profile climate related issues are also likely to bring questions, including the State Department's pending review on the Keystone XL pipeline, the administration's revised calculation of the “social cost of carbon,” energy efficiency standards and loans for renewable energy companies. In the letter to EPA, Whitfield says he wants to hear from federal agencies about the Obama administration's second-term climate agenda and “to obtain fuller information regarding the Federal government's past, current, and planned domestic and international activities, climate research programs, initiatives, and new regulatory requirements.” He asks the agency heads to prepare testimony that identifies their research, actions, participation in task forces and working groups, regulations, guidance documents, international agreements and other agency activities relating to climate change that have been completed since 2005. The letter also asks for information about federal spending on climate change, such as clean energy and climate change funding and grants distributed since 2005, approximate annual

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spending on climate change, and the number of agency employees and program offices that are working part- or full-time on issues relating to climate change. Democrats on the Energy & Commerce Committee in February had worked to force the committee to hold hearings on the science of climate change by trying to amend a committee oversight plan, but Republicans defeated the plans in party-line votes. The energy and power panel includes outspoken advocates of addressing climate change, such as Rep. Henry Waxman (D-CA) and Lois Capps (D-CA).

39. Supreme Court Sets Date to Weigh Hearing GHG Suits On September 30th, the Supreme Court will meet to decide whether to hear lawsuits filed by several states and industry groups challenging EPA's initial suite of greenhouse gas (GHG) rules, including its finding that GHGs from motor vehicles endanger public health and welfare; a vehicle GHG rule and a GHG permitting rule. The justices will announce shortly after the opening conference of the Supreme Court's October 2013 term whether they will hear the various appeals, where at least four of the justices will need to agree to grant certiorari for the industry and state lawsuits challenging the rules to advance. Conference decisions are typically released within days of the meeting with relatively few details about the decision. The pending petitions ask the high court to reverse a federal appeals court ruling that upheld the agency's GHG regulations, a decision that the full appeals court then refused to reconsider. A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit in Coalition for Responsible Regulation v. EPA in June 2012 unanimously upheld EPA's GHG endangerment finding, along with its “tailpipe” rule setting GHG limits for vehicles and its “timing” and “tailoring” rules that require major stationary sources to obtain GHG permits, but the high court petitioners say the ruling was in error. Although such petitions are rejected in the overwhelming majority of the cases, the case would offer the Supreme Court its first opportunity to review EPA's climate rules since its landmark 2007 decision in Massachusetts v. EPA, where a 5-4 majority said GHGs can be regulated under the Clean Air Act. In his dissenting opinion in Massachusetts, Chief Justice John Roberts, joined by Antonin Scalia, Clarence Thomas and Samuel Alito, was doubtful that EPA GHG regulations could prevent harms from climate change, saying those who brought the suit seek “literally to change the atmosphere around the world.” If the four dissenting judges were to agree to grant cert in the case, it would again put EPA's ability to address GHGs into uncertainty for several months, potentially creating doubt around President Obama's plans to issue rules limiting greenhouse gases for future and existing power plants. Utility groups, manufacturers, chemical trade groups, conservative law groups and states seeking to challenge the GHG rules last week filed legal briefs urging the Supreme Court to take up the case. Virginia has questioned EPA's reliance on climate change data from the United Nations Intergovernmental Panel on Climate Change for its endangerment finding, while many industry groups have argued that the agency erred by deciding that the vehicle emissions endangerment finding should apply to major stationary sources.

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40. EPA Responds To Concerns Over Emissions Increases From Engine Air Rule Revisions

California air regulators, emissions controls manufacturers and construction sector groups warned EPA that its proposed technical amendments to air rules for medium- and heavy-duty engines, vehicles and non-road equipment appear in part unnecessary and could have the unintended consequence of leading to emissions increases. In response to the concerns, EPA has withdrawn the relevant provisions of a June 17th direct final rule that would have implemented the amendments on a faster schedule than a regular notice-and-comment rulemaking. Instead, the agency will now work to finalize a parallel proposed version of the amendments published June 17th and the final rule will take into account the criticisms, according to a notice published in the Federal Register. EPA in the June rules said the technical changes "would eliminate duplicative reporting requirements, reduce inadvertent minor differences between the EPA and [National Highway Traffic Safety Administration] programs regarding such matters as voluntary early model year compliance, better align testing procedures to market realities, and reduce unnecessary testing burdens," changes EPA said would not alter air emissions or industry compliance costs. However, the rule does make some amendments that commenters said could result in more pollution or higher costs. Their scrutiny focused on two measures: EPA's exemption of some engines from the most recently adopted "Tier 4" emissions limits for replacement engines, and the agency's proposed expansion of its discretion to allow greater flexibility under its "transition" program for equipment manufacturers moving to Tier 4 standards. For example, CARB said it "is concerned that several of the technical amendments to the Non-road Tier 4 Regulation" outlined by the agency "could result in unintended and adverse consequences on California's off-road in use programs and to its air quality in general." Under the Clean Air Act, California has long had authority to set stricter mobile source emission rules than the federal government, and if EPA approves the rules, other states can adopt them. EPA in the Register notice says that in response to the adverse comments it received on some provisions of the direct final rule it will withdraw the exemption for replacement engines and expansion of the technical hardship provision for equipment manufacturers installing non-road diesel engines. In the notice, the agency also says in response to adverse comments received it will withdraw test requirements and chassis certification for greenhouse gas emissions from heavy-duty engines. California's EPA-approved in-use programs for non-road engines impose restrictions on emissions from construction equipment by limiting its use. The state is prohibited under the air law from regulating the design of engines to minimize emissions, and so it is trying to restrict their pollution by in-use restrictions instead, such as idling limits. Road builders are urging the Supreme Court to hear a suit that claims such state rules are preempted by the air law. In the comments to EPA, CARB says it broadly backs several provisions in the technical amendments rule that are aimed at making it easier to retrofit older off-road equipment with newer, cleaner engines. The measures would allow equipment owners to retrofit with new engines that do not meet Tier 4 emissions limits in situations where the equipment cannot accommodate a Tier 4 engine -- although the replacement engine must be the cleanest model that will fit. Previously, federal regulations required replacement of the engine with an engine only at least as clean as

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the old one -- not the cleanest that would fit -- and only allowed retrofit if the old engine broke down. The proposal enables retrofit for engines in equipment that is no more than 25 years old, to limit the number of older engines being used for retrofit. CARB says that the changes are welcome because California's non-road in-use programs require replacement of functioning old engines with newer ones to cut emissions. However, on the 25-year cutoff that EPA is pursuing, CARB "does not believe that such a requirement is necessary for California because the State's in-use programs are expected to require fleet modernization for most off-road applications far in advance" of the cut-off date. Therefore, while the state says it does not oppose the measure, it "does not find it necessary for California's needs, and does not intend to harmonize with the provision because it would limit the flexibility of manufacturers of specialty niche-market equipment." CARB also took issue with EPA's proposal to grant additional flexibility to equipment manufacturers that for a variety of reasons are struggling to procure a sufficient quantity of Tier 4 engines, allowing them to use higher-emitting engines that do not meet Tier 4 standards. CARB says that granting additional relief to a few "non-integrated equipment manufacturers" -- those that do not produce engines for their equipment -- that are classed as "specialized" may be justified because those manufacturers may not be able to buy Tier 4 engines. However, "EPA's proposed relief mechanism is not limited to just these specialized non-integrated equipment manufacturers, but would be available to the entire non-integrated manufacturing segment of the non-road category." Therefore, CARB says, "this aspect of the proposal has the potential to significantly increase off-road diesel emissions. Additionally, the proposal has the potential to reduce the availability of Tier 4 final-level engines, which could hinder the effective implementation of California's off-road in-use programs." CARB further opposes EPA's proposal to provide additional flexibility to engine manufacturers by removing limits on numbers of non-Tier 4-compliant engines they can supply under the federal emissions averaging banking and trading (ABT) Tier 4 program. Currently, EPA allows only 20 percent of a manufacturer's annual production to be certified using a Family Emissions Limit (FEL) cap equal to the previous Tier 3 standards for particulate matter and nitrogen oxides. FELs apply to engines certified as part of the same "family," or group of similar engines. To offset these higher-emitting engines, the remaining engines must be certified to tougher emission levels and closer to Tier 4 final levels. EPA claims that, on average, raising the FEL emissions caps will not result in increased pollution, because more engines would be certified to tougher standards to offset emissions increases from dirtier models. "However, it is [CARB's] understanding that the local exposure effects have not been duly considered or modeled," CARB says. EPA's proposal "would likely result in fewer Tier 4 final-level engines available in California to comply with its off-road in-use programs, especially if manufacturers choose to use their banks of stored emission credits in order to continue certifying their dirtier engines," CARB said, adding that manufacturers do not need the proposed flexibility. Industry groups are also raising concerns about provisions of the direct final rule. For example, the Manufacturers of Emission Controls Association (MECA) warns that EPA should not further expand the flexibilities available under the Transition Program For Engine Manufacturers (TPEM), arguing that doing so will shrink the pool of available Tier 4 engines and delay their introduction into commerce. "The wide scale use of the TPEM flexibility delays the transition to cleaner, Tier

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4 engines and the emission reductions associated with these cleaner engines. MECA understands the need to provide manufacturers with this compliance flexibility but is also supportive of accelerating the introduction of cleaner Tier 4 technology into the U.S. market," the group says. The Construction Industry Air Quality Coalition, representing operators of construction equipment, said, however, that EPA has not gone far enough to introduce extra flexibility. While the group calls EPA's proposal not to require that old engines break down before they are replaced "sound policy," it adds that limiting retrofit to equipment less than 25 years old is unnecessary. "The emission benefits resulting from the installation and use of newer lower-emitting engines are real and should not be limited to the size of the existing equipment or its age," the coalition says, adding that, "Construction equipment is capital intensive and, depending on the type of equipment, has a useful life that can stretch beyond 25 years."

41. California Delays LCFS Compliance, Revisions After Adverse Court Ruling California officials are pushing back compliance mandates for 2013 under the state's landmark low-carbon fuel standard (LCFS) until the end of next year and postponing major revisions to the rule, following a recent state appellate court ruling backing the ethanol industry's claim that California illegally implemented the LCFS in 2009. The state's decision is prompting questions from observers about whether the overall program's compliance timetable through 2020 will be pushed back by one year. Oil industry groups, environmentalists, regulators in other states and other stakeholders are closely tracking the fate of the LCFS because -- if it survives other pending legal challenges -- it is seen as a model for other states, or for a potential future federal cleaner fuels program. The LCFS requires fuel suppliers to reduce the carbon intensity of gasoline and diesel 10 percent by the end of 2020, using a 2010 baseline. It mandates a 1 percent cut by the end of 2013, a 1.5 percent reduction by the end of 2014 and a 2.5 percent reduction by the end of 2015, with reductions becoming more stringent in the following years. Biorefining company POET and other critics of the LCFS filed suit over the program claiming that the California Air Resources Board (CARB) violated the California Environmental Quality Act (CEQA) when it adopted the LCFS. The plaintiffs argued that CARB failed to disclose significant environmental impacts, failed to evaluate reasonable alternatives to lessen the impacts, and failed to mitigate impacts, including potentially higher nitrogen oxide emissions from biodiesel fuel blends. The lawsuit is an appeal of a November 2011 ruling by Fresno County Superior Court that sided with CARB. The suit also argued that state regulators failed to respond to comments on its CEQA review that challenged certain findings. The company is seeking declaratory and injunctive relief from the LCFS. POET more generally believes that the LCFS is unfair to Midwest corn-ethanol producers because it assigns them a higher carbon intensity factor under the regulation than ethanol produced in California. In a July 15th ruling, the state appellate court largely backed the industry challenge to the program, but allowed its continued enforcement. In an August 12th notice emailed to LCFS stakeholders and others, CARB said it will seek to satisfy the appellate court's order by considering the adoption of a “consolidated regulatory package” in 2014.

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As a result of the final ruling, the 2013 LCFS requirements “will remain in effect through 2014,” the CARB notice says, meaning that the industry is getting an additional year to meet the 2013 provisions.

42. California Air District Fights Proposal to Delay Cleaner Ship Engine Policy California air district officials are urging EPA and the International Maritime Organization (IMO) to drop a proposal to delay implementation of cleaner “Tier III” engine standards for oceangoing ships from 2016 to 2021, saying the delay in emission cuts associated with the rule will hinder the district's ability to meet EPA's ozone air standards. Officials from California's South Coast Air Quality Management District indicate that few, if any, new Tier III engines will be available until after 2021, raising questions about how the region will meet air quality standards. The district says it may have to eventually amend its "air quality management plan" (AQMP) -- which outlines how it will cut pollution and attain EPA standards -- to find other emission reductions if the ship standards are delayed. Air district officials at a July 19 mobile source committee meeting discussed the latest developments at the IMO in terms of possible delays to Tier III engine standards and what it would mean for southern California. South Coast says that if the Tier III engine standards are delayed, few if any ships will have these engines until after 2021, and significant NOx emission reductions will be lost in the 2022-2023 time frame. This will jeopardize district efforts to attain an 8-hour ozone standard in 2023 and a 1-hour ozone standard in 2022, the presentation says.

43. Impact of Keystone XL on Greenhouse Gas Emissions Remains Controversial Technological and policy issues will make it impossible for Canada to prevent the proposed Keystone XL pipeline from significantly increasing greenhouse gas emissions, which President Obama has said is a prerequisite for U.S. approval of the project, according to U.S. and Canadian environmental advocates and scientists. The increased bitumen production from Alberta's oil sands needed to fill the pipeline would generate additional greenhouse gas emissions well beyond the Canadian government's capacity to offset them and would more than offset major U.S. emission reduction initiatives, Danielle Doitsch, Canada Project director with the Natural Resources Defense Council, told reporters in a teleconference on a background report published by Environmental Defense Canada5. At the same time, Prime Minister Stephen Harper's government is on track to miss its commitment under the Copenhagen Accord to reduce greenhouse gas emissions 17 percent from 2005 levels by 2020, and to date has failed to produce long-promised regulations to limit emissions from the oil and gas sector, said Gillian McEachern, campaigns director with Toronto-based Environmental Defense. Environment Canada reported in April that the country's overall greenhouse gas emissions increased slightly in 2011 as higher emissions in the oil and gas sector more than offset a continued decline in emissions from agriculture, land use, and forestry. Doitsch said the Keystone XL pipeline is essential to the planned development of Canada's oil sands resources. A Natural Resources Defense Council study has suggested that approval of the

5 Mitigating climate impacts of the tar sands, Political and policy barriers to greenhouse gas reduction in Canada, August 14, 2013.

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pipeline would lead to increased greenhouse gas emissions of as much as 1.2 billion metric tons in a 50-year period. Rather than adopting new climate policies to reduce emissions, the Canadian government is pursuing a strategy of further developing the oil sands, including approval of the industry's plans to expand bitumen production from 1.5 million barrels per day in 2012 to 5.8 million barrels per day by 2030, she said. Canada already faces a gap of 113 million metric tons between its Copenhagen Accord commitment and the levels to which current policies will bring overall emissions, a difference equivalent to the combined current emissions of all Canadian fossil fuel-fired power plants, she said. Another new report, produced by consulting and research firm IHS CERA Inc., found that without the pipeline, the use of alternate transportation routes would lead to oil sands production growth being higher or unchanged. According to IHS CERA, Venezuelan heavy crude oil would likely fill the void for Texas refineries if Keystone was not approved. The report contends that Venezuelan crude and Alberta tar sands oil have roughly the same carbon footprint. IHS said it expects production to rise to 4.3 million b/d in 2030 from 1.9 million b/d in 2013 and does not expect the Keystone XL decision to have a material impact. It noted that another 3 million b/d of oil sands pipeline capacity has been proposed, 80% of which traverses exclusively through Canada and consequently does not require US government approval. With sufficient scale and investment, the cost of transporting bitumen from Alberta to Gulf Coast refineries by rail could fall to within $6/bbl. of pipeline transportation costs, the study indicated. “This would place rail well within the break-even range for most oil sands production,” it said. The study also concluded that there would be little change in the Gulf Coast’s overall GHG emissions if bitumen from Alberta’s oil sands was not shipped there. The region, which contains 50% of the nation’s refining capacity, could process similarly heavy crudes from elsewhere, it said. Adding another wrinkle, it was announced in early August that the State Department Acting Inspector General Harold W. Geisel is conducting an inquiry into allegations made by opponents of the project suggesting that the consultant selected by the State Department to conduct the environmental review of the project was not entirely truthful regarding its past clients and work for companies involved in Canadian oil sands development. Environmental Resources Management Inc. (ERM), a London-based international consulting firm, has been accused by Friends of the Earth, The Checks & Balances Project, and other environmental groups of lying on its conflict of interest disclosure form about its previous work for TransCanada and other oil companies. Most recently, one CEO, Continental Resources’ Harold Hamm, is already saying the time for the pipeline has passed. As the fate of the northern leg of the Keystone XL pipeline remains in limbo in Washington, other pipeline and transportation projects could eliminate its necessity. “It’s not critical any longer,” Hamm told a National Journal reporter. “They just waited too long. The industry is very innovative, and it finds other ways of doing it and other routes." Those other ways of doing it include recently completed rail and pipeline projects which have increased the means to bring Bakken crude from North Dakota to processing facilities in Cushing, Oklahoma and beyond. "There are other people who want to build pipes and don't have to go across the border, and it doesn't have to involve bitumen from Canada," Hamm said, referring to TransCanada’s intent for the Keystone XL to handle Alberta oil sand, with North Dakota Bakken crude added to the project’s plans after negotiations had begun.

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The northern leg of Keystone XL is expected to get a final decision by the end of the year. Hamm told National Journal he remains committed to use the pipeline if and when it is completed. However, he isn’t expecting President Obama to approve the project. “I don't think he will, because his environmental base of support is against it,” he said. The Keystone XL expansion was first proposed in 2008. If completed, the pipeline would take 730,000 barrels of oil daily from Canada to Texas, with up to 100,000 of that coming from the Bakken formation. The southern leg, from Cushing, Oklahoma to the Gulf coast, is almost complete.

44. Canadian Consent Agreements with Hyundai, Kia Settle Incorrect Fuel Economy Issue

The Canadian Competition Bureau has secured consent agreements with Hyundai Auto (Canada) Corp. and KIA Canada Inc. to formalize their response to violations of the Competition Act by advertising inaccurate fuel consumption ratings for some of their vehicle models, Competition Commissioner John Pecman has announced. The consent agreements will require Hyundai and Kia to compensate affected customers for the higher fuel costs for the time they own covered vehicles, plus a 15 percent surcharge acknowledging inconvenience to their customers. The compensation is to be in the form of personalized prepaid credit cards issued each time an affected consumer makes a request, for as long as an affected customer owns an affected vehicle. The calculation will be based on the average fuel price in the consumer's geographic area and the actual number of kilometers driven by the consumer since purchasing the vehicle. The inaccurate fuel consumption ratings, which were based on testing conducted at joint testing facilities in South Korea, affect about 172,000 vehicles sold in Canada between 2010 and 2012—about 130,000 Hyundai vehicles and 42,000 Kia vehicles. Hyundai and Kia had said in November 2012 that procedural errors at their joint testing facility led to incorrect fuel consumption ratings for certain vehicles. The error was identified during an audit by the U.S. Environmental Protection Agency, and the corrected ratings led to an overall increase in the automakers' combined fleet fuel consumption rating for the 2013 model year of 0.3 liters per 100 kilometers.

45. Study: Air Pollution Causes 200,000 Early Deaths Each Year In The U.S. Researchers from MIT’s Laboratory for Aviation and the Environment have come out with some sobering new data on air pollution’s impact on Americans’ health.6 The group tracked ground-level emissions from sources such as industrial smokestacks, vehicle tailpipes, marine and rail operations, and commercial and residential heating throughout the United States, and found that such air pollution causes about 200,000 early deaths each year. Emissions from road transportation are the most significant contributor, causing 53,000 premature deaths, followed closely by power generation, with 52,000. In a state-by-state analysis, the researchers found that California suffers the worst health impacts from air pollution, with about 21,000 early deaths annually, mostly attributed to road transportation and to commercial and residential emissions from heating and cooking.

6 "Air pollution and early deaths in the United States. Part I: Quantifying the impact of major sectors in 2005", Steven Barrett’ Laboratory for Aviation and the Environment, Department of Aeronautics and Astronautics, MIT

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The researchers also mapped local emissions in 5,695 U.S. cities, finding the highest emissions-related mortality rate in Baltimore, where 130 out of every 100,000 residents likely die in a given year due to long-term exposure to air pollution. “In the past five to 10 years, the evidence linking air-pollution exposure to risk of early death has really solidified and gained scientific and political traction,” says Steven Barrett, an assistant professor of aeronautics and astronautics at MIT. “There’s a realization that air pollution is a major problem in any city, and there’s a desire to do something about it.” Barrett and his colleagues have published their results in the journal Atmospheric Environment. Barrett says that a person who dies from an air pollution-related cause typically dies about a decade earlier than he or she otherwise might have. To determine the number of early deaths from air pollution, the team first obtained emissions data from the Environmental Protection Agency’s National Emissions Inventory, a catalog of emissions sources nationwide. The researchers collected data from the year 2005, the most recent data available at the time of the study. They then divided the data into six emissions sectors: electric power generation; industry; commercial and residential sources; road transportation; marine transportation; and rail transportation. Barrett’s team fed the emissions data from all six sources into an air-quality simulation of the impact of emissions on particles and gases in the atmosphere. To see where emissions had the greatest impact, they removed each sector of interest from the simulation and observed the difference in pollutant concentrations. The team then overlaid the resulting pollutant data on population-density maps of the United States to observe which populations were most exposed to pollution from each source. The greatest number of emissions-related premature deaths came from road transportation, with 53,000 early deaths per year attributed to exhaust from the tailpipes of cars and trucks. “It was surprising to me just how significant road transportation was,” Barrett observes, “especially when you imagine [that] coal-fired power stations are burning relatively dirty fuel.” One explanation may be that vehicles tend to travel in populated areas, increasing large populations’ pollution exposure, whereas power plants are generally located far from most populations and their emissions are deposited at a higher altitude. Pollution from electricity generation still accounted for 52,000 premature deaths annually. The largest impact was seen in the east-central United States and in the Midwest: Eastern power plants tend to use coal with higher sulfur content than Western plants. Unsurprisingly, most premature deaths due to commercial and residential pollution sources, such as heating and cooking emissions, occurred in densely populated regions along the East and West coasts. Pollution from industrial activities was highest in the Midwest, roughly between Chicago and Detroit, as well as around Philadelphia, Atlanta and Los Angeles. Industrial emissions also peaked along the Gulf Coast region, possibly due to the proximity of the largest oil refineries in the United States. Southern California saw the largest health impact from marine-derived pollution, such as from shipping and port activities, with 3,500 related early deaths. Emissions-related deaths from rail

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activities were comparatively slight, and spread uniformly across the east-central part of the country and the Midwest. While the study is based on data from 2005, Barrett says the results are likely representative of today’s pollution-related health risks. Jonathan Levy, a professor of environmental health at Boston University, says Barrett’s calculations for the overall number of premature deaths related to combustion emissions agree with similar conclusions by the Environmental Protection Agency. The group’s results — particularly the breakdown of emissions by state — provide valuable data in setting future environmental policy, he says. “A public-health burden of this magnitude clearly requires significant policy attention, especially since technologies are readily available to address a significant fraction of these emissions,” says Levy, who was not involved in the research. “We have certainly invested significant societal resources to address far smaller impacts on public health.”

46. Carbon, Silicon In Airborne Particulates Increase Risk Of Death In US Cities, Study Says.

Certain ingredients of airborne particulates – especially carbon – apparently increase the risk of death in U.S. cities, according to a new nationwide study.7 The study of 72 urban areas builds on previous research that suggests the health effects depend on the pollution’s composition. But it is the first on a national level to examine mortality risks of different particulate ingredients. Figuring out which ingredients of particulates are the most dangerous could help regulators hone in on their sources. For decades, scientists have been trying to unravel why more people die of heart attacks, asthma and other health problems whenever fine particulate matter, known as PM2.5, increases. The researchers from Johns Hopkins, Harvard and Yale universities used air pollution and mortality data from all causes of death, except accidents, between 2000 and 2005. Seven compounds that, together, typically make up 79 to 85 percent of PM2.5 mass were analyzed. Small increases in organic carbon matter, elemental carbon, silicon and sodium ion were associated with slightly more deaths the following day. With a typical, day-to-day increase in pollutant levels, deaths rose by 0.39 percent for organic carbon, 0.22 percent for elemental carbon, 0.17 percent for silicon and 0.16 for sodium. The researchers found “little evidence” of variation by season or region. Carbon comes largely from diesel and gasoline-powered vehicles, silicon from coal combustion and sodium from aerosolized sea salts. However, all of the pollutants have multiple sources. “By identifying PM2.5 constituents that are more toxic, we can move towards developing source-specific air pollution regulation that may be more effective at protecting public health,” the authors wrote.

47. Fake Vehicle Emissions Tests Cost Man 10 Years in Prison

7 Krall JR, GB Anderson, F Dominici, ML Bel, RD Peng. Short-term exposure to particulate matter constituents and mortality in a national study of U.S. urban communities. 2013. http://ehp.niehs.nih.gov/1206185/. Environmental Health Perspectives; http://dx.doi.org/10.1289/ehp.1206185.

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A Jonesboro man will serve 10 years in prison for his part in a fraud scheme relating to phony emissions tests issued at a north Fayette County business. DeAngelo Lacosta Smith entered a guilty plea to Fayette County Superior Court Judge Robert M. Crawford, according to the Fayette County Assistant District Attorney. Beyond the 10-year prison sentence, DeAngelo Smith was fined $25,000 and will serve an additional 10 years on probation following his release from prison. DeAngelo Smith is one of 14 co-defendants in the case, all charged with various counts of violating the Georgia racketeering influenced and corrupt organizations act, commonly known as RICO charges. He pled guilty to all three RICO charges he was indicted on, prosecutors said. Co-defendant Joe Douglas of Kingston Road, Atlanta pled guilty to a reduced charge of computer forgery and was sentenced by Crawford to two years in prison followed by eight years’ probation and a $2,500 fine. Two other co-defendants pled guilty to reduced charges on Feb. 5: Markaila Patricia Ann Caesar and Michael Keith Knight. Caesar pled guilty to computer-related forgery and got 270 days in prison, the remainder of a two-year sentence on probation and a $1,500 fine. Knight pled guilty to two counts of computer fraud and was sentenced to eight years’ probation with a $1,500 fine. The charges stemmed from a lengthy investigation conducted by the Environmental Protection Division of the Georgia Department of Natural Resources. According to the indictment filed in the case, the phony tests were rung up over a period of three months. In some cases, the defendants are accused of using another car as a “surrogate” for a vehicle that would not pass an emissions inspection and thus would likely require costly repairs.

48. Davis County Testing Center Reports High Fail Rate for Diesel-Fueled Vehicles Since the Davis County Health Department turned over its diesel-fueled vehicle emissions testing to a private contractor on January 2nd, the first-test fail rate on older, mid-sized diesel-fueled trucks has risen threefold, from 8 percent in 2012 to 28 percent in 2013, drawing complaints from vehicle owners. But the cause for the rise may be as simple as new state-of-the-art vehicle emission testing equipment, officials say. On Dec. 31, 2012 the county got out of the business of performing vehicle emission tests, leaving the practice to the 125 privately owned service stations in the county. But because of the subset of older, mid-size, diesel-fueled vehicles that remained in the county — roughly 6,500 — the health department continued testing those by hiring a private contractor to perform the work in a long-term cost-saving move. The diesel-fueled vehicles being tested there are 2007 or older models, or those that do not have an onboard diagnostics system station operators can plug into, Garrett said. The contractor uses equipment that reads exhaust opacity levels with a laser rather than a light, Garrett said. The 12-year-old equipment the county had been using was light-based. “The program is to get those trucks that are polluting” off the road, County Health Director Lewis R. Garrett said. Air quality is a major public health concern among residents, and the No. 1 cause for the county’s poor air quality is vehicle emissions, he said. Vehicles having failed the first test are allowed to be brought back in for a free second test after the vehicle owner has had time to make some minor adjustments to the vehicle, such as changing out the fuel or replacing the air or fuel filter. “Generally, it is an easy fix,” Garrett said. Of those

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vehicles that receive the second free test, 92 percent pass, bringing the overall fail rate number well within the final 8 percent fail rate the county experienced when it was operating the program last year.

49. Utah Officials Hope Their Plan Will End Winter Pollution Utah air-quality officials think they are close to completing a smog-busting plan for the Wasatch Front’s winter pollution spikes — just in the nick of time. If all goes on schedule for the Division of Air Quality, the plan could be in place by the year’s end. And that would mean averting a crackdown by the U.S. Environmental Protection Agency (EPA) that could have choked development and transportation funding for the state’s most populated counties. It also would mean cleaner air sooner, said division Director Bryce Bird. "The health effects are immediate," said Bird, "as soon as we get these rules in place." The overarching plans for the Wasatch Front would be the final, critical piece in the state’s years-long effort to bring winter pollution in line with federal standards and to end those periods when a brown, unhealthy blanket of smog smothers northern Utah valleys, sometimes for weeks at a time. Air-quality staff detailed the reasons for new optimism at a meeting of the Air Quality Board, which heard how updated emissions tallies, further pollution reductions by industry and new clean-car standards appear to add up to significant reductions. To reach the EPA target level of 52 tons of pollution on a typical winter day by 2019, Utah County needed to cut another 10 tons of emissions. And the Salt Lake County area needed to eliminate another 22 tons of pollution to reach a 227-ton target. What’s changed with the new analysis is that the picture looks more optimistic if you factor in the latest information, which now includes the emissions data from 2012. Another key factor is new federal regulations intended to slash the pollution that comes from passenger cars and trucks. Those regulations, dubbed "Tier 3," were proposed by the Obama administration in March and will officially go into effect in four years, making cars and fuel cleaner. Still more emissions reductions are expected from smokestack industries in the five-county area covered by the plan. Air-quality officials have been in meetings with those companies, and they estimate that better pollution controls at key companies, including the refineries and Kennecott Utah Copper, will mean a reduction of about 2,000 tons of key emissions a year. The air-quality board will review the final plans for Utah County and the five-county Salt Lake pollution-control region next month, and give the public 30 days to comment. They hope to put the plans into action by Jan. 1.

50. US Becoming 'Refiner to the World' As Diesel Demand Grows The U.S. became a net exporter of petroleum products just two years ago and is now the largest exporter in the world. The product of choice for export is diesel because margins are much higher and demand is growing, and U.S. refiners have an advantage over foreign counterparts. Natural gas to fire up refineries is abundant and much cheaper in the U.S., and the expansion of U.S. oil production has made oil more plentiful and cheaper than if refiners had to buy it on the world market. In fact, the U.S., while still the world's largest importer of crude, this year eliminated most imports from Africa.

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As of mid-year, margins on U.S. Gulf Coast-produced diesel were running just above $16 barrel, while the margins on finished gasoline were much lower at just under $8 barrel, and that trend is not new. So the race is on to add capacity, and mainly for diesel. Diesel demand is growing at twice the rate of gasoline, demand for which has been declining in the U.S. Gasoline demand has been and is expected to continue declining as drivers shift to more fuel-efficient vehicles. Valero, the world's largest independent refiner, completed building two new hydrocrackers, one last year at its refinery in Port Arthur, Texas, and another last month in St. Charles Parish, La. Each cost about $1.5 billion and can process 60,000 barrels of petroleum feed stocks a day. Valero's stated goal is to produce the same amount of distillates as gasoline by the end of 2015 on a one-to-one ratio—unusual for the industry. Marathon Petroleum told Louisiana regulators recently that in fact it is speeding up the expansion of its hydrocracking unit at the Garyville, La. refinery and will complete it in October, a full year ahead of schedule. Marathon will increase the hydrocracker's capacity by 20,000 for production of ultra-low sulfur diesel production, according to press reports. Marathon is also overhauling a 275,000 distillation unit at the refinery. Refiners have been pinched as crude oil prices rise, and the narrowing of the gap between U.S.-produced West Texas Intermediate and the international benchmark Brent crude, has taken away some of the advantage U.S. refiners had in the global marketplace. Exxon Mobil, for instance, pointed to refining margins for part of its surprisingly steep profit decline in the second quarter, and others, like Marathon and Valero, also blamed a contraction in refining margins for reduced profits. Gulf Coast refineries have had an advantage compared to their counterparts on the East Coast, where a lot of refining capacity has been shut down over the past several years because of their reliance on then much higher priced Brent crude. The addition of pipeline capacity and rail shipments from the middle of the country has brought more U.S. crude into the Gulf, displacing African oil. Rail has also benefited East Coast refiners, who now receive mid-continent crude. Government data shows the U.S. exported 1 million barrels a day of diesel fuel for the week ended August 2nd, about the same as the last several weeks, but up from 840,000 barrels a week earlier in the summer. The U.S. industry has increasingly found foreign buyers for petroleum products, mostly diesel but also jet fuel and some gasoline. According to Bank of America Merrill Lynch, U.S. exports rose to 2.6 million barrels per day by the end of 2012, from 1.3 million in 2007. Recent data showed exports of 2.9 million barrels per day. The U.S. imported 700,000 barrels of gasoline per day in the same period, while exporting 258,000 barrels a day of finished gasoline. Valero says it is responsible for about 20 to 25 percent of U.S. exports, and it exports 15 to 20 percent of the diesel it produces, and about 8 percent of the gasoline. In the second quarter, Valero was producing 1.3 million barrels a day of gasoline and 910,000 barrels of distillates, which include fuel oil, jet fuel and diesel. Fresh data from the Energy Information Administration showed U.S. refinery runs at 15.9 million barrels a day during the week ending August 2nd, down from the more than 16 million barrels a day run in the last month. Refineries continued to operate at a high level of 90.9 percent of capacity, though off recent highs. Gasoline production rose slightly to 9.6 million barrels per day, and distillate fuel, mainly diesel production, increased to 4.9 million barrels per day.

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51. EPA Finalizes 2013 Renewable Fuel Standards

As part of an ongoing effort to enhance energy security and reduce carbon pollution, the U.S. Environmental Protection Agency (EPA) has finalized the 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program established by Congress. Most of these fuels are produced by American farmers and growers domestically and help reduce the carbon pollution that contributes to climate change. The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the U.S. fuel supply (a 9.74 percent blend). This standard specifically requires:

Biomass-based diesel (1.28 billion gallons; 1.13 percent) Advanced biofuels (2.75 billion gallons; 1.62 percent) Cellulosic biofuels (6.00 million gallons; 0.004 percent)

These standards reflect EPA’s updated production projections, which are informed by extensive engagement with industry and a thorough assessment of the biofuels market. During this rulemaking, EPA received comments from a number of stakeholders concerning the “E10 blend wall.” Projected to occur in 2014, the “E10 blend wall” refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10. Most gasoline sold in the U.S. today is E10. In the rule just issued, EPA announced that it will propose to use flexibilities in the RFS statute to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 RFS volume requirement proposal. EPA is also providing greater lead time and flexibility in complying with the 2013 volume requirements by extending the deadline to comply with the 2013 standards by four months, to June 30, 2014. A January 2013 ruling by the U.S. Court of Appeals required the agency to reevaluate projections for cellulosic biofuel to reflect market conditions; the final 2013 standard for cellulosic biofuel was developed in a manner consistent with the approach outlined in that ruling. The Energy Independence and Security Act (EISA) established the RFS program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

52. EPA Vows to Revise Refinery Air Toxics Rules In 2014 EPA has reached a settlement agreement with environmentalists committing the agency to a late 2014 deadline for finalizing a package of revised air toxics rules for the oil refining sector, prompting criticism from industry groups that say it reflects a pattern of EPA's “sue-and-settle” deals with advocates setting deadlines for new rules. The consent decree, filed August 2nd in the U.S. District Court for the District of Columbia, commits EPA to propose by February 14th and finalize by December 19th rules updating maximum achievable control technology (MACT) emissions standards for petroleum refineries, or to propose and finalize rules finding that such revisions are unnecessary.

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The agreement also covers under the same schedule a Clean Air Act-mandated risk and technology review to gauge if the existing MACTs achieve sufficient health protections eight years after their implementation. The deal, which will not be final until EPA publishes it in the Federal Register and takes public comment, drew criticism from the American Petroleum Institute (API). If finalized, the deal will resolve a lawsuit that Air Alliance Houston, California Communities Against Toxics and other environmental and public health groups filed on September 27, 2012. The suit alleged EPA missed a mandatory air law deadline to update two MACT standards, “subpart CC” covering petroleum refineries and “subpart UUU” covering catalytic cracking units, catalytic reforming units and sulfur recovery units. Environmentalists say that under the Clean Air Act's requirements to review the MACT standards every eight years, EPA was required to finalize rules updating or maintaining the petroleum refinery rules by August 18, 2003, and the catalytic cracking and sulfur recovery rules by April 11, 2010. Environmentalists in the lawsuit argued that EPA's failure to update the standards by the statutory deadline established by Congress was allowing the emissions of air toxics that harmed its members. According to court documents, EPA quickly entered into settlement discussions and reached a tentative settlement deal by May, but has not filed a formal settlement decree until August 2nd. EPA sent a pre-proposal version of the rules to the White House Office of Management and Budget (OMB) for inter-agency review on September 4, 2012, but then withdrew the rules from OMB on March 12. Days earlier, EPA's Scientific Advisory Board (SAB) had selected the refinery air toxics rules as one of three rules that might merit a novel pre-proposal scientific review. After months of discussions that SAB held amongst itself and with EPA officials to discuss the scientific issues of the rules, the board decided on a July 19 teleconference that it did not want to review the rules before they were proposed.

53. States Wage Fights Over Air Transport Ahead Of New EPA Interstate Rule Northeastern states are waging case-by-case fights with upwind counterparts over the adequacy of state-specific plans for mitigating interstate air pollution transport, seeking emissions reductions ahead of EPA's plan to propose a rule in mid-2014 to address a federal appeals court ruling scrapping its recent rule to cut utilities' transported emissions. However, air regulators in the upwind states counter it is too early for other states to try and claim their upwind neighbors must cut emissions to meet a "good neighbor" provision of the Clean Air Act that requires states to take steps to avoid hindering neighboring states from attaining EPA's air standards. The disputes -- which are over EPA's proposed approvals of state implementation plans (SIPs) from Virginia and West Virginia outlining how they will meet federal emission standards -- highlight the latest fallout from the U.S. Court of Appeals for the District of Columbia Circuit's 2-1 ruling last year vacating EPA's transport rule. The court held that EPA must first tell upwind states what their significant contribution to the pollution problems of each downwind state is before states can draft measures to meet the good neighbor obligation, and that it failed to do so in crafting the Cross-State Air Pollution Rule

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(CSAPR) trading program. The rule was designed to replace the Bush-era Clean Air Interstate Rule (CAIR) cap-and-trade program. The Supreme Court has agreed to hear EPA's appeal of the DC Circuit decision in its next term, but acting EPA air chief Janet McCabe has said the agency is working on resolving ongoing technical, legal and policy uncertainties caused by the ruling regardless of the fate of the case. As part of that work, EPA is holding calls with state and industry officials to discuss how to address the D.C. Circuit's ruling and its restrictions on the agency's trading options. State and industry officials who have participated on some of the calls to date say that McCabe has stressed EPA's desire to grant states maximum flexibility in meeting their transport obligations, and that other EPA air rules, such as the agency's proposed "Tier III" fuel and vehicle emissions standards will help reduce ozone. EPA reportedly intends to issue a proposed transport rule in summer 2014 in tandem with the release of its pending proposed rule to reduce greenhouse gases from existing power plants with a view to better coordinating air regulations facing the utility sector. But the scope of the replacement rule for CSAPR remains unclear. While EPA continues its work on the replacement air transport rule, some Northeastern states struggling to meet the agency's national ambient air quality standards (NAAQS) are using formal comments on upwind states' SIPs as a strategy to try and force EPA to require those states to curb their transported emissions. In recent comments filed on EPA's proposed approvals of air quality plans from Virginia and West Virginia, the Connecticut Department of Energy and Environmental Protection warns that EPA should not approve the plans because they lack provisions to address interstate transport. The SIPs at issue are "infrastructure" plans that are required under the Clean Air Act to show the broad parameters of state programs to meet NAAQS, including the ozone standard.

54. California Eyes Subsidy Hikes to Build Hydrogen Pumps for Fuel-Cell Cars California officials may expand subsidies for the construction of hydrogen fueling stations, acknowledging that the state continues to lag in its campaign to build a sufficient number of stations to accommodate thousands of hydrogen fuel-cell vehicles (FCVs) expected to hit the market in the 2015-17 time frame. Specifically, officials may raise a cap on the amount of money that can be granted for the construction of a single hydrogen-fueling station, depending on the facility, as well as lower the amount of "matching" money a private company would have to provide to qualify for a state grant. Officials consider the funding program critical for the state to meet its greenhouse gas (GHG)-reduction goals for the transportation sector. Dramatically increasing the sale of battery-electric and hydrogen fuel cell zero-emission vehicles is one of the state's highest priorities to combat climate change. The California Air Resources Board (CARB) and California Energy Commission (CEC) are examining possible changes to the rules governing grants for hydrogen stations under the state's Alternative and Renewable Fuel and Vehicle Technology Program, which was created by the 2007 law AB 118. The program awards more than $100 million annually to research, demonstration and deployment projects to advance various alternative fuels and vehicles, such as ethanol, hydrogen, electricity and natural gas. The funding is collected from various fees on state motorists.

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Under pending legislation to extend the subsidy program to 2023, hydrogen fueling infrastructure projects would receive at least $20 million annually until 100 stations are built. Currently, the subsidy program has roughly $30 million to spend on hydrogen stations over the next two fiscal years, officials said during an August 12th workshop on the funding rules held by CARB and CEC. The state last year set a goal of building 68 stations by 2016 that would serve up to 30,000 fuel-cell vehicles. But Jim McKinney, a supervisor in CEC's emerging fuels and technology office, said during the meeting that under a best-case scenario the state will not have 68 operating hydrogen stations until the end of 2017, according to projections of current funding plans. There are only seven hydrogen stations operating in the state, he said, none of which were funded by the AB 118 program. Another 17 are fully funded by the program and ready to be built, he said. The fiscal year 2011-12 CEC allocation under the subsidy program was $11.9 million, which is expected to result in the construction of an additional seven stations, McKinney said. Another seven stations are expected to be built in the near-term in the South Coast air district under a related program. CEC is now authorized to offer $10 million from the fiscal year 2012-13 program funding plan, which must result in final contracts by June 30, 2014, McKinney said. An additional $20 million is expected in the following fiscal year. CEC and CARB officials are contemplating changes to the rules governing the awards for the next solicitation to make the funding more attractive to companies, after witnessing a disappointing response to previous solicitations, officials said. "We're at a critical junction here . . . there was a lot of money on the street the last fiscal year and not all of it was taken up through proposals from station developers," McKinney said. "So the key question is -- what signals do station developers need from government and the automakers to increase the pace of station development? Because if we keep having setbacks . . . we will not meet the policy goals for the program or the state." Some of the problems with the funding program identified by key stakeholders are: developers must pay too much money in match funding; California Environmental Quality Act permit requirements are too costly or onerous; technical standards are difficult to meet; and there is a lack of industry capital to maintain the current progress of building stations or to increase the current capacity and progress, McKinney said. A broader problem plaguing the effort is that it remains unclear when fuel-cell vehicles will hit the road in significant numbers and when they will be ready for full commercialization, sources say. Many potential hydrogen station developers are reluctant to invest millions of dollars now if the vehicles are not going to be on the street for another four or five years. CARB official Analisa Bevan said during the workshop that board staff is undertaking a survey of automakers about their plans for producing fuel-cell vehicles over the next three years, but the results will likely not be available until October. Another problem is the high probability that companies would not see any return on their station investments for many years, if at all, stakeholders said. Some developers are also not happy with the state's designated regions where stations must be sited to qualify for funding. CEC and CARB officials are contemplating raising the amount of money that can be granted for one station to more than $1.5 million, using a sliding scale depending on the quality and

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performance standards that will be achieved by the station, as well as also lowering the amount of match funding the developer would have to provide. Currently, the developer must pay 35 percent of the total cost of the project.

55. Three Shipping Companies Fined $440K for Using Dirty Fuel Oil Three international shipping companies were fined a combined $440,250 for failing to switch to cleaner fuel while in California waters, the California Air Resources Board (ARB) has announced yesterday. Three separate ships were required to switch from dirty "bunker" fuel to cleaner, low-sulfur marine distillate fuel but failed to do so. "Ships en route to California ports emit thousands of tons of diesel exhaust each year," said ARB Enforcement Chief Jim Ryden. "Our regulation requiring ocean-going vessels to switch to cleaner fuel within 24 nautical miles of our shoreline protects all California residents, especially those in port communities, from this air pollution." Specifically:

Hoegh Autoliners Shipping AS Co. of Oslo, Norway, was fined $299,500 after an ARB investigation showed violations on 17 different occasions by its vessel, the Hoegh Inchon, between November 6, 2009 and July 18, 2011.

N.C.N Corporation Panama, was fined $87,750 after its ship, the Ikan Bawal, failed to switch fuels during stops at the Ports of Stockton and Long Beach in February 2013.

Twin Phoenix Shipping S.A. of Singapore, was fined $53,000 after its vessel, the K-Pluto, visited the Port of Los Angeles in August 2012 without switching to the cleaner fuel.

ARB said it inspects over 500 ships every year, with a 95% compliance rate. It's Ocean-going Vessel Regulation, adopted in 2008, results in the elimination of 15 tons per day of diesel particulate matter - a known carcinogen. CARB’s shipping regulation required all main engines, boilers and auxiliary engines on ships to use marine diesel oil with sulfur amounts at or below .5 percent. In January 2014, that standard is scheduled to require a maximum sulfur content of .1 percent.

56. Mexico’s President Formally Proposes Oil Sector Reforms On August 12th, Mexico President Enrique Pena Nieto formally proposed a plan to reform the country’s oil and gas sector as a way to stimulate foreign investment. The proposal would modestly amend the national constitution to permit such investments, but retain national ownership of the resources. Pena Nieto emphasized that State oil firm Petroleos Mexicanos (Pemex) will not be privatized or sold. The company would be restructured into two divisions—dealing with exploration and production, and industrial reform. It would try to become more internationally competitive; work to become more financially transparent; and establish policies to attract foreign investments. While political hurdles lie ahead, Pena Nieto’s Institutional Revolutionary Party (PRI) and the more conservative National Action Party (PAN), which proposed its own oil sector reforms earlier, apparently have enough votes to make the necessary constitutional changes in the 35 state legislatures which must ratify any such move as well as the national congress when it reconvenes in September, observers agreed.

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Despite domestic crude oil reserves that have fallen to about 10 years’ supply at current consumption rates and a nearly 25% production decline in the past decade, Mexico is still among the world’s 20 biggest oil producers with resources equivalent to Kuwait and other oil rich nations.

CENTRAL AMERICA

57. Air Pollution in San Jose, Costa Rica Threatens Health The pollution in Costa Rica’s capital city, San José, is a threat to Costa Ricans health, a study by the Laboratorio de Análisis de Calidad de la Universidad Nacional (UNA) – National University´s Quality Analysis Laboratory has concluded. Harmful particles in the air were recorded at 37 micrograms per cubic meter (ug/m3), according to the research. The figure is almost double the maximum contaminant levels established by the World Health Organization (WHO). In San José, people are breathing harmful elements such as sulfates, chlorides, nitrates, nickel, copper, vanadium and aluminum. Also, large amounts of manganese which is responsible for the reduction in lung capacity, said Rosario Alfaro, an expert from the university. This kind of pollution affects human airways, the digestive system and the eyes, as well as the skin with consequent acceleration of aging, she said. Just as the country reduced PM 10 particles and removed lead from gasoline, we will now assume this new challenge reducing fine particles through new regulations, renewal of the vehicle fleet and overall emissions reduction,” said the minister Rene Castro. Castro said that in order to confront the problem fuels will be reformulated and the change of vehicle fleets will be strongly promoted. Data on air quality, prepared by the National University in 2012, revealed that vehicles over 15 years old emit 70% of pollutants. These vehicles account for 50% of the fleet of the country. EFE

ASIA-PACIFIC

58. Recent Developments in China

China Proposes New Cap on Sulfur in Gas, Implementation Schedule The National Energy Administration has proposed to limit the sulfur content in so-called China V fuel to 10 parts per million (ppm) and to require its use nationwide by 2018 in an attempt to reduce smog and haze pollution from passenger vehicles. A draft measure released July 12 would set technical requirements for so-called China V gasoline. While sulfur content in gasoline is limited to 150 parts per million (ppm) for China III and 50 ppm for China IV, China V would cap sulfur content at 10 ppm. Olefin and manganese content in China V fuel also would be lowered from previous standards. Use of China III gasoline would be prohibited as of January 1, 2014. Use of China IV gasoline would be prohibited as of Jan. 1, 2018, when gasoline meeting the China V fuel quality standard would be required nationwide. Economic Information Daily, a newspaper under the state-run Xinhua news agency, reported on July 15th that despite the government's tightening of fuel standards and auto emissions standards in recent years, vehicles' emissions are often not inspected, and fuel standards at the refinery

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level are often ignored. The report noted that while Chinese manufacturers are mostly implementing required emissions standards for new vehicles, the two major state-owned oil companies have been reluctant to improve fuel quality because of costs. Ma Dong, director of the Policy Research Department at the Vehicle Emission Control Center under the Ministry of Environmental Protection, noted that the China V gasoline standards will mainly impact the country's two main fuel suppliers. The companies, Sinopec and PetroChina, will have to purchase equipment to improve fuel quality but the more stringent standards will also affect private distributors that cannot access government incentives as easily as the oil giants. Beijing, which suffers from severe pollution, is the only major city in China that already requires China V fuel quality but other major cities such as Shanghai are expected to follow quickly on a schedule more rapid than the national requirement. Ma said the new fuel standard is a “good thing,” although improving air quality will take much more effort. “To put out a big fire, you'll need more than a barrel of water,” he said. A public comment period on the draft measure ended July 22.

Cleaner Fuels Spreading Across China Sinopec has announced that starting from October 1st they will begin to phase in Euro IV (50ppm sulfur) gasoline nationally. In addition, in Shanghai, 8 cities in Jiangsu along the Yangtze River, and 6 cities in the Pearl River Delta Euro V gasoline (10ppm sulfur) will phase in from the same date. PetroChina has not promised the date yet but Sinopec is contributing more than 55% of the total fuels in China.

Cleaner Fuel on the Way For Shanghai Motorists Local authorities have announced the timetable for implementing the Shanghai V (5) standard for fuel. This includes the Shanghai V standard for petrol and "5th-phase" standard for diesel. The cleaner fuel will be available at some gas stations from September as a trial but will then go sale citywide from December. These standards cap sulfur content below 10 parts per million - compared with the current 50 ppm. The local standard is similar to the European V automobile diesel standard and the Beijing standard V for automobile petrol, said Shen Weimin, deputy director of the Shanghai Quality and Technical Supervision Bureau. Manganese content - a major exhaust pollutant that can harm the respiratory system - will be cut to 2 milliliters per liter in the new standard from the current 6 milliliters per liter permitted. Fuel prices will stay almost the same, said the bureau. Stricter restrictions on banning highly polluting cars will also be introduced in November. "Pollutants caused by road traffic are particularly severe, with volatile organic compounds and nitrogen oxide the major pollutants in emissions in urban areas," added the official. The bureau said the city will implement a national V standard of automobile fuel when issued.

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China to Tackle Air Pollution with New $277 Billion Initiative

The Chinese government has announced a $277 billion initiative to tackle air pollution. The Airborne Pollution Prevention and Control Action Plan aims to reduce emissions by 25 percent from 2012 levels by 2017 and specifically targets North China, especially Beijing and the provinces of Tianjin and Hebei, China Daily reported. "The Beijing, Tianjin and Hebei province area is the most stringently targeted because airborne pollution is most serious in this area," the state-run newspaper quoted Wang Jinnan, vice president of the Chinese Academy for Environmental Planning as saying during the Eco-Forum Global Annual Conference Saturday in Guiyang, Guizhou province. Wang participated in drafting the new pollution plan. "The central government is determined to curb emissions in energy-consuming and highly polluting industries," state-run news agency Xinhua quoted Environment Minister Zhou Shengxian as saying at the conference. Zhao Hualin, head of the pollution prevention and control department of the Ministry of Environmental Protection, said the air pollution plan is just one of three plans that will be released in the next five years, China Daily reported. Other areas to be addressed include water pollution control and improvements to the rural environment. "The thick smog and haze that covered large areas of the country in January has focused public attention on this issue," Zhao said, referring to the "Airpocalypse" pollution disaster that blanketed Beijing and environs at the beginning of this year. Beijing and other northern Chinese cities have experienced severe levels of pollution particularly since January, when Beijing's air quality index regularly exceeded 500, the scale's maximum reading. "The thick smog and haze that covered large areas of the country in January has focused public attention on this issue," Zhao said. A new study published in the Proceedings of the National Academy of Sciences said air pollution causes people in northern China to live an average of 5.5 years less than their southern counterparts. (See story below) An April analysis of the Global Body Burden of Disease concluded that outdoor air pollution contributed to 1.2 million premature deaths in China in 2010, nearly 40 percent of the global total. Last December, just a month before the onset of exceptional levels of smog in Beijing, the government announced an air pollution reduction plan for 13 major areas covering 117 cities aimed at cutting the level of particulates in the air at least 5 percent by 2015. However, Chai Fahe, vice president of the Chinese Research Academy of Environmental Sciences told China Daily government leaders concluded after the plan had been released in December, a tougher approach against air pollution was needed, China Daily reported. According to China Daily, Wang Jinnan of the Chinese Academy for Environmental Planning, said that although the introduction of the new plan would have negative effects on local economies due to the elimination of dirty industrial production methods, it would have a balancing effect of aiding green industries, an increasing focus of China's R&D efforts. Wang also said that the plan would boost China's GDP by 2,500 billion Yuan ($407bn). The investment is more than the total economic output of Hong Kong last year ($263 billion) and underlines how the government is eager to bring about a visible improvement in China’s bad air, which has caused discontent among its citizens and tarnished the country’s image abroad.

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It said details would be released in late July at the earliest.

China Official Defends "Embarrassing" Environmental Protection Ministry China's environment minister said his ministry ranked among the world's "four major embarrassing departments" but defended the agency, saying it was hampered by overlapping functions in government, according to state media. The comments by Zhou Shengxian are the latest in a string of blunt admissions by Chinese leaders that the country still has a long way to go in tackling pollution. Social unrest spurred by environmental complaints is becoming common across the country, to the government's alarm. "I've heard that there are four major embarrassing departments in the world and that China's ministry of environmental protection is one of them," state news agency Xinhua's official microblog account quoted Zhou as saying. "Our environmental work involves many departments. Many of the functions are overlapping," Zhou said, adding that water, land and carbon output were all managed by different ministries. Despite Xinhua later removing a reference to Zhou's remarks describing the agency as an embarrassment, his comments spread widely on China's other state media microblogs. Zhou, a two-term environment minister, has presided over China's worst pollution in recent memory. He received among the fewest votes from China's lawmakers in the race for the cabinet at this year's meeting of the National People's Congress. Zhou said he was worried about the public health impact of dire pollution contaminating the air, soil and water, Xinhua said. "The current challenge facing the environmental (authorities) is how to properly deal with the environmental problems caused by economic development," Zhou said.

Great Wall Motors Prospers As Peers Struggle In the past decade several domestic Chinese carmakers have managed to post healthy sales growth, but only for a limited period. According to Automotive News Great Wall Motor Co., China's largest SUV maker, now appears poised to break from the pack. In the first six months of the year, Great Wall's sales have jumped nearly 40 percent year-on-year to 367,857 vehicles. If you don't count the joint ventures of China's state-owned automakers -- which produce vehicles for foreign brands -- Great Wall is now the country's largest domestic automaker. In sales, Great Wall trails only Volkswagen AG, General Motors, Hyundai Motor Co., Nissan Motor Co., PSA Peugeot Citroen and Ford Motor Co. This is not the first time that Great Wall has posted strong sales. Since 2009, its annual volume has never grown less than 28 percent. Great Wall is making money, too. Earnings rose 27 percent in 2011, 66 percent last year, and 72 percent in the first six months of 2013. What's behind Great Wall's robust sales and profit growth? It is the company's focused product development strategy. Chinese automakers, young as they are compared with global competitors, are prone to reckless expansion when sales are good.

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For example, five years ago, Chery Automobile Co. was by far the largest domestic automaker. Then the state-owned company developed more than 20 new models, placing a heavy burden on Chery's engineers. Product quality declined, sales fell and profits disappeared. In 2009, BYD overtook Chery after it aggressively expanded its dealership network. That strategy quickly backfired, causing sales and profits to tumble in the next two years. Great Wall, by contrast, has been more realistic. Aware of its limited resources, the company focused on its core products, the Haval-brand SUV and Great Wall's subcompact sedan. The simple approach has paid off nicely. In the first half, SUVs accounted for more than half of Great Wall's sales. Among its three SUV models, two have achieved monthly sales of more than 10,000 units. Monthly sales of the Great Wall C30 sedan also have exceeded 10,000 units. To be sure, with nearly all automakers in China hatching plans for or accelerating SUV launches, Great Wall is bound to face more competition in the market. But the company appears positioned and prepared to tackle the challenge. In the past two years, Great Wall has partnered with a slew of top-tier global parts suppliers to help develop products that are more technologically advanced and competitive. A new plant in Tianjin is coming online to ease a production bottleneck and enable Great Wall to expand sales further. The bottom line: Great Wall's growth seems assured -- at least in the near future -- as Chinese consumers snap up SUVs.

Pollution Leads to Drop in Life Span in Northern China, Research Finds

A cyclist in Beijing. Southern Chinese on average have lived at least five years longer than their northern counterparts in recent decades because of the destructive health effects of pollution from the widespread use of coal in the north, according to a new study published by a prominent American science journal. The study, which appears in The Proceedings of the

National Academy of Sciences, was conducted by an American, an Israeli and two Chinese scholars and was based on analyses of health and pollution data collected by official Chinese sources from 1981 to 2001. The results provide a new assessment of the enormous cost of China’s environmental degradation, which in the north is partly a result of the emissions of deadly pollutants from coal-driven energy generation. The researchers project that the 500 million Chinese who live north of the Huai River will lose 2.5 billion years of life expectancy because of outdoor air pollution.

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“It highlights that in developing countries there’s a trade-off in increasing incomes today and protecting public health and environmental quality,” said the American member of the research team, Michael Greenstone, a professor of environmental economics at the Massachusetts Institute of Technology. “And it highlights the fact that the public health costs are larger than we had thought.” Mr. Greenstone told reporters in a telephone interview that another surprising result of the study was that the higher mortality rates were found across all age groups. The study is the first measuring this kind of impact that relies purely on data collected within China. Its conclusions are based on analyses of population groups living in areas north and south of the Huai River. The Chinese government has for years maintained a policy of free coal for boilers to generate winter heating north of the river, which runs parallel to and between the Yellow and Yangtze Rivers. That policy and the ubiquity of northern coal-fired factories have contributed to the vast gap between the coal pollutants emitted in north and south. Howard Frumkin, dean of the School of Public Health at the University of Washington, said a “strong point” of the study was its basis in the “natural experiment” resulting from China’s disparate coal policies. “The results are biologically plausible, and consistent with previous research,” he said. For every additional 100 micrograms of particulate matter per cubic meter above the average pollution levels in the south, the life expectancy at birth drops by three years, the researchers found. Mr. Greenstone said that estimate could be roughly applied to other developing nations where the baseline level of pollutants was high. The health statistics recorded through the two-decade period by Chinese officials and examined by the study’s researchers showed that the 5.5-year drop in life expectancy in the north was almost entirely due to a rise in deaths attributed to cardiorespiratory diseases or related health problems. The pollution data, also recorded by officials, indicated that the concentration of particulates north of the Huai was 184 micrograms per cubic meter higher than in the south, or 55 percent greater.

Pollution Problems Widespread in 2013; Beijing, Tianjin and Hebei Hit Hardest Air pollution, including high ozone levels, is most severe in Beijing, Tianjin and Hebei province, according to a report released recently by the Environmental Protection Ministry. The report highlighted air quality in the three key areas and 74 cities from January to June of this year. Almost 40 percent of the 74 cities with publicized readings for fine particles failed to meet the national standard for three months or more during the first half of 2013, the report said. The average concentration of PM2.5 particulates in the 74 cities was 76 micrograms per cubic meter in the first six months; that compares with the WHO’s recommendation of no higher than 25 for day-long exposure. Based on the ministry's air quality readings, poor air quality was experienced for more than a fifth of the days in June in the regions of Beijing, Tianjin, and Hebei. But not just in June, the three regions were heavily polluted for 26.2 percent of days in the first half of the year – making them the three most polluted areas monitored by the ministry, reported Xinhua.

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Seven cities in Hebei province were in the top 10 for pollution, with Shijiazhuang the hardest-hit. Less than one-in-ten days saw air quality within the national standard. Hebei is China’s biggest steel producing region. The air pollution is especially apparent in Beijing, where the reading for particulate matter measuring at less than 2.5 microns in diameter averaged at 115 micrograms per cubic meter. The average readings for PM2.5 - particulate matter smaller than 2.5 micrometers in diameter that can reach deep into the lungs and bloodstream - for all cities in the Beijing, Tianjin and Hebei area failed to meet the national standard of 35 microgram per cubic meter. In the Yangtze River Delta area, the national standard for the PM2.5 level was only met in Zhoushan, Zhejiang province. The situation in the Pearl River Delta area was no better, with only Huizhou in Guangdong province meeting the standard. Readings of ozone levels in the three key areas all exceeded the national level. Ozone replaced PM2.5 to be the top air pollutant in the Pearl River Delta area in June. In addition to air pollution, the ministry also recorded acid rains hitting 135 cities nationwide in the first six months of the year, with 23 cities hit being severely affected by it. The ministry pointed the finger at coal-burning, automobile emissions, construction projects, and at industry as the major causes of heavy pollution. China has taken several steps in trying to curb their problem of air pollution. In fact, the Ministry of Environmental Protection's Airborne Pollution Prevention and Control Action Plan for 2013 to 2017, which will be backed with $277 billion in total investments from the central government, was just approved to help address the problem of air pollution, reported the China Daily. Specifically targeting North China, particularly Beijing, Tianjin and Hebei, the plan aims to reduce emissions from heavy-polluting sectors by 2017. The governments of Beijing, Tianjin and Hebei jointly released plans that aim to deal with the region's severe air pollution and reduce small particulate matter by up to 30 percent. The government’s plan to achieve this target by restructuring industries, increasing energy efficiency and restricting the purchase and use of private cars. For instance, Hebei endeavors to dramatically reduce coal consumption and Tianjin to improve its public transportation services. Aside from the air pollution action plan, environmental authorities are drafting a plan to reduce air pollution in the three regions, as well as other cities and provinces, by requiring them to sign contracts to reduce carbon consumption and eliminate industries that cause heavy pollution, CCTV reportedly said.

Tianjin Guideline the Latest Bid To Restrict New Car Sales As pressure mounts on infrastructure and the environment, Tianjin has become the latest in a string of cities to restrict automobile purchases. On August 6th, the Tianjin municipal government released a guideline that said "responding to the increasingly congested traffic in the city, Tianjin will consider restricting car purchases and use in proper time to prevent the too-fast growth of the number of motor vehicles". The government also said in the document that it will build more parking garages, reduce parking on the streets and encourage residents to use public transport.

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Statistics from the municipal traffic administration show that Tianjin had about 2.4 million vehicles on the road by the end of January. More than 70 percent of newly registered vehicles in the city last year were privately owned. Earlier local newspaper reports cited officials at the Tianjin Environmental Protection Bureau saying tailpipe exhaust has become a "major factor" affecting the city's air quality. Pollutants from automobiles in the city total about 500,000 tons every year, the bureau said. Without a specific timetable, the guideline is widely seen as a declaration that the Tianjin municipal government will curb car purchases. The trend is clear that more cities are following the lead of Beijing, Shanghai, Guangzhou and Guiyang to limit car buying. Just two months ago, the government of Shijiazhuang, capital of Hebei province, announced it would prohibit families from buying a third car starting at the end of this year. The city government vowed to prevent the number of cars on the road from exceeding 1.9 million this year and to keep it to a maximum of 2.1 million by the end of 2015. Last month, the China Association of Automobile Manufacturers told the media that more cities including Chongqing, Chengdu, Hangzhou, Shenzhen, Qingdao and Wuhan are likely to adopt similar policies. The association estimated that the possible restrictions might cut vehicle sales by 400,000 units a year, equivalent to 2 percent of total domestic sales. In Beijing the quota policy has dampened the market. In the first half of this year, new car sales in the capital city totaled 279,400, a small decrease from the same period last year when 281,200 vehicles were delivered. Car sales nationwide grew by 12 percent in the first six months. Different from Beijing's lottery system, Shanghai auctions license plates to control sales. Driven by strong demand, the price of a new car plate in the city reached a peak of 90,000 Yuan in March - the cost of a new Volkswagen Polo, which makes it hard to find buyers for cars in that price range. To cool bidding, a price ceiling was enacted by the municipal government in April. Last week, it also decided to shorten the auction time from 90 minutes to an hour.

Unintended Consequences: Vehicle Restrictions Spur Big Car Purchases

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As more Chinese cities propose license-plate lotteries and other ways of limiting the number of cars on the road, consumers are responding by buying more expensive automobiles with bigger engines. In Shanghai between 9,000 and 10,000 plates are auctioned monthly, fetching an average of 82,000 Yuan ($13,400) so far this year. That steep fee helped convince David Fu, a 26-year-old bank corporate finance manager, to buy an Audi A4 in June for 300,000 Yuan after looking at a dozen lower-cost models including those made by Volkswagen AG and China's home-grown car makers. "Putting the pricey plate on a more expensive car makes sense," said

Mr. Fu. As scarcer plates raise the cost of owning a car, shoppers can rationalize paying more for their cars and believe the restrictions may limit them from trading up later, say auto dealers and analysts. The result is first-time car buyers are skipping less expensive models, usually Chinese brands. Data from the semiofficial China Association of Automobile Manufacturers show in Beijing the average price per car has surged 88% since 2011 and the market share of cars with engines larger than 1.6 liters has grown 17% over the same period. Shijiazhuang, one of China's most polluted cities, has proposed limiting the number of new vehicle licenses to 100,000 a year from this year on, equivalent to about 60% of the number of vehicles that were added in the city in 2011, according to estimates by brokerage house CLSA. Authorities in the eastern city of Hangzhou in June proposed imposing high license-plate fees on households planning to buy second cars, adding they were prepared to allow the license-plate fee to surpass car prices. Hangzhou has more than one million cars on its roads of the major districts, or one car for every three citizens, according to official sources. Chinese domestic auto makers are concerned that license-plate auctions would severely impact their sales. China is already the world's largest car market with total sales rising 4.3% to 19.3 million vehicles in 2012. CAAM has forecast that new-car sales could reach 30 million vehicles by 2020. Every kilometer of road in China has about 200 cars, as many as in Los Angeles, which has some of the worst traffic in the U.S., according to UBS research.

Pearl River Delta to Ban Government Autos on Bad Air Days

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The use of government vehicles in the Pearl River Delta will be reduced if air quality in the region reaches dangerous levels, according to an emergency draft issued by the Guangdong provincial environmental protection authority. The draft aims to better tackle air pollution following an increased use of vehicles in the Pearl River Delta region, sources with the provincial authority said. The authority gave two levels for serious air pollution - very unhealthy when the air quality index is between 201 and 300 and hazardous when the index surpasses 300. Under the proposal, 30 percent of government vehicles will be kept off roads in the region if the index reaches the hazardous level. If the index reaches the unhealthy level, 15 percent of such vehicles will be suspended from use. The draft, which has been submitted to the Pearl River Delta air pollution coordinative meeting to solicit opinions from its member cities, is expected to take effect by the end of this year, according to the provincial authority. The Ministry of Environmental Protection has defined a new air quality index that includes PM2.5 (particulate matter smaller than 2.5 micrometers in diameter) and ozone, which many cities including Beijing and Guangzhou in Guangdong province have adopted. The index focuses on reporting the daily air quality and health effects people within an area may suffer within a few hours or days. According to the draft, the authority will publicize measures for local residents to reduce health risks if the air quality reaches the hazardous level. For example, people will be advised to avoid all physical activity outdoors and those with heart or lung disease, the elderly and children should remain indoors and keep activity levels low, according to the draft. The construction and demolition of buildings will also be suspended during the day if the index reaches more than 300 and coal-fired power plants will be ordered to suspend operations by stages. A survey conducted on Wednesday by local website Dayoo.com found that up to 90 percent of respondents welcomed banning government vehicles if the air quality reached dangerous levels.

Tai'an Sees 376,000 Private Cars on Road The number of private cars running in Tai'an city, Shandong province, has hit 376,000 as of the end of June, with 27,000 newly-registered vehicles in the first six months this year, according to the city traffic police detachment, Qilu Evening News has reported. The number of new cars in Tai'an is expected to hit 60,000 by the end of this year, said the traffic police detachment. Nearly every 100 households will have 26 cars, according to a statistical bulletin for Tai'an's economic and social development released by the Tai'an statistical bureau. Cars with an engine displacement of 1.6 liters or below remain the most popular for drivers, accounting for 70 percent of the total new registered cars. The number of drivers has hit 864,000 as of last November, said an officer from the vehicle administration office of Tai'an. However, the huge number of cars has placed great pressure on the city's transportation. According to estimates, the city's roads would be full of cars if all the private cars run at the same time.

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Congested Traffic Hits Even Small Urban Areas

The population of Lishi has increased from 230,000 to 330,000 over the past 10 years. Counting the migrant population not registered in the 2012 census, Lishi's population may have actually doubled over that time. The increasing urban population has given rise to demands for housing and motor vehicles, making a fourth-tier city such as Lishi as crowded and polluted as a first or second-tier city. High-rises are being built in the valleys of Lishi to meet increasing demand for housing. The city's number of vehicles - not including two and three-wheelers - has almost doubled in the past three years from 22,000 in 2010. Cars and trucks are parked full along the sides of most city streets and are packed in some residential courtyards overnight. In morning, residents have to work with neighbors in the daily chore of moving out their vehicles. And most of the drivers work within walking or bicycling distance. While drivers are daily jammed on the city streets, very few are traveling on expressways to nearby cities. Empty expressways and crowded city streets are the reality of many smaller cities in today's China. China's new leaders envisioned that urbanization would continue to be an important driver of economic growth in the coming years. While this may be true, the current pattern of urbanization is hardly sustainable as life in the cities, though more convenient with better education and healthcare opportunities compared to rural areas, is becoming increasingly difficult with congestion, air pollution, traffic accidents and street crime. The example of Lishi also poses a question for optimists that believe China's demand for automobiles may increase to 30 or 40 million in the next 5 to 10 years. They pin high hopes on demand in fourth and fifth-tier cities. The potential may be there given China's low rate of per-capita ownership of automobiles. But such a potential may not be realized given the current pattern of urbanization.

Road Construction to Accelerate In Central, West China Road construction in China's central and western regions will speed up following a central government vow to boost the expansion of the railway sector, the China Securities Journal has reported. Several provincial-level regions, including Yunnan, Hubei, Hunan, Jiangxi, Tibet, Xinjiang and Sichuan, plan to build new highways in city clusters and rural areas, according to the newspaper. In Tibet, authorities will spend 200 billion Yuan (32.3 billion U.S. dollars) to build a road network centered around the regional capital of Lhasa over the next five to eight years, as well as extend the combined length of the region's highways to over 110,000 km. The construction projects will be funded using multiple channels, including fiscal investment and corporate bonds. The central government has allocated 66.9 billion Yuan to build new national- and provincial-level roads, as well as defense highways, the Ministry of Finance announced. The government has earmarked 186.9 billion Yuan from its income from vehicle purchase taxes to fund transportation

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projects so far this year. It plans to spend 4.7 trillion Yuan to expand the national road network during the 2013-2030 period, according to the ministry. The National Development and Reform Commission, the country's top economic planner, has recently approved a 8.5-billion-yuan corporate bond issuance by Hubei Provincial Communications Investment Co., Ltd., the largest corporate bond sale of its kind to date, the paper said. The central government has also vowed to speed up reforms concerning investment and financing in the railway sector, including establishing a railway development fund using government investment and social capital.

Air Pollution Reportedly Takes Toll on China's Tourism China, one of the most visited countries in the world, has seen sharply fewer tourists this year — with worsening air pollution partly to blame. The numbers of foreign visitors have declined following January's "Airpocalypse," when already eye-searing levels of smog soared to new highs. China is the world's No. 3 destination for international travel after France and the United States. Weakness in visitor numbers could hurt government efforts to reduce reliance on trade-driven manufacturing by promoting cleaner service industries such as tourism. Foreign visitors are outnumbered by Chinese tourists but spend more. That China's air and water are badly polluted following three decades of breakneck growth is not news. But January's record-setting bout of smog got worldwide news coverage and was so bad some longtime foreign residents left the country. From January to June, the total number of foreign visitors, including business travelers and residents, entering China declined by 5 percent to just under 13 million compared with the same period last year, according to the China National Tourism Administration. Overall, visitors from Asia, Australia, Europe and the Americas all declined. In Beijing, with major attractions including the Great Wall and the Imperial Palace, the drop is even more striking. The number of foreign tourists visiting the Chinese capital fell by 15 percent in the first six months of the year to 1.9 million, according to the Beijing Tourism Administration. The China National Tourism Administration acknowledges a decline in foreign tourists to China as a whole, and in cities including Beijing, Shanghai and Xiamen, a prosperous port city in the southeast. It blames the global economic slowdown and a stronger Chinese currency and says China's tourism image has been hurt by the emergence of H7N9 bird flu, air pollution and dead pigs found floating in Shanghai's main river. Total numbers of foreigners to Beijing rose in January by 13 percent compared with a year earlier. But following news reports of January's smog, they dropped in February by 37 percent compared with February 2012. In June, the number of foreigners to the Chinese capital was down by about 19 percent from a year ago, according to the Beijing Tourism Administration. The biggest drop was among Japanese visitors — 55 percent fewer came to the capital in the first six months. The number of Americans, the biggest single group of foreign visitors, declined 4 percent to just under 370,000.

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China Set To Overtake US as World's Largest Oil Importer by October China is on the cusp of overtaking the United States as the world's largest importer of oil, according to the latest projections from the US Energy Information Administration (EIA). In a new report,8 the EIA said Chinese net oil imports will surpass US net imports by as early as October 2013. China will likely be the world's largest net importer on an annual basis by 2014, and the EIA expects the gap to only widen from there. The EIA attributed its projections to growing demand in China, coupled with a surge in domestic oil production in the US. In its annual report last year, the Paris-based International Energy Agency (IEA) predicted that the US will become the world's largest producer of both oil and natural gas by the year 2020, transforming all of North America into a net oil exporter by 2030. The EIA says US production will grow by 28 percent over the next three years, reaching nearly 13 million barrels per day, while Chinese output is expected to grow by just six percent over the same period. By 2014, Chinese oil production is expected to be just one-third of US output, according to the EIA's forecasts.

The demand side of the equation tells an entirely different story. According to the EIA, Chinese oil consumption is expected to rise by 13 percent over the coming three years, eclipsing 11 million barrels per day, while US demand will likely hover around 18.7 million barrels per day — well below its high point of 20.8 million barrels, recorded in 2005.

The rise of domestic shale gas production has lessened American dependence on foreign energy sources, though there are serious concerns over hydraulic fracturing, or "fracking" — a technique whereby chemicals and pressurized water are used to release underground wells of natural gas. France and other countries have banned the practice amid warnings that it may have dangerous consequences for the environment and public health. China, meanwhile, remains intent on pursuing renewable sources of energy, even as its domestic appetite for oil continues to grow. Late last month, government officials said spending on renewable energy could reach 1.8 trillion Yuan ($294 billion) by 2015, as Beijing considers investing another 2.3 trillion Yuan ($380 billion) on low-emission projects in the coming years. The country has also reiterated its commitment to cut carbon emissions intensity by 45 percent by the year 2020. In the short term, however, China will likely remain dependent upon oil and other fossil fuels to meet its growing energy needs. The People's Republic is already the world's biggest energy

8 U.S. Energy Information Administration Short-Term Energy Outlook, August 2013. Net oil imports defined as total liquid fuels consumption less domestic production.

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consumer, and emits more carbon dioxide than other country. And as Chinese consumption rises in parallel with US production, some are predicting a major shift in global trade patterns.

China to Spend More on Technology to Tackle Severe Pollution China plans to accelerate investment in technology to save energy and tackle the severe pollution blamed for a series of health crises that have generated widespread public anger. The government has been increasingly alarmed by social unrest caused by environmental disasters and threats to public health, often the result of the country's breakneck industrial expansion and mass migration to new cities. The country's cabinet, the State Council, said recently that environmental protection would be elevated to a "pillar industry" that would receive government support in the form of tax breaks and subsidies. China is already investing 2.3 trillion Yuan ($375 billion) in energy savings and emissions reduction in the five years through 2015, state media have said. The State Council said the new plan would ensure the environmental protection industry grows by 15 percent annually, generating turnover of 4.5 trillion Yuan ($735 billion) by 2015. Past efforts to build such "pillar industries" have sometimes led to vast overcapacity and trade conflicts, with China's government accused of giving an unfair advantage to local companies. The State Council said eligible foreign-funded firms would enjoy the same benefits from the environmental protection plan as their Chinese counterparts. It said it would accelerate research into environmentally friendly vehicles and develop technology and equipment for the control of air, water and soil pollution. The plan suggests China is accelerating efforts to become a world leader in clean technology. It has already announced a series of steps to curb pollution and reduce carbon emissions. The central government will direct more of its budget to fund environmental protection industries and encourage eligible companies to issue bonds, it said.

China's First Car-Sharing Scheme Starts In Hangzhou After two years of trials, the city of Hangzhou has announced the launch of its car-sharing scheme, according to the Zhejiang Daily. Car-sharing schemes allow a number of people to use a single car, but not to own it. They gain the benefit of using a private car, but without the costs and responsibilities of ownership. The use of such schemes in cities around the world has been found to reduce, or at least, delay car ownership. Hangzhou is already known for being the first Chinese city to operate a public bicycle scheme. That scheme was government-backed, but the car-sharing scheme is purely commercial. One of the companies involved in the scheme said that with no shops or on-site staff, and car rentals and returns all handled online, the company would have much lower costs than normal rental firms. The biggest expense would be vehicle purchases. More than 4,000 people have already signed up as members, according to reports, with expectations of 40,000 by the end of the year. A survey of scheme members found that of 500 respondents, one-tenth had opted to not buy a second car after joining, and one third gave up or delayed plans to buy a car.

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There are also plans to experiment with allowing the rental of private vehicles – car owners can hand over cars they are not using, and the car-sharing company would then rent it out. The owner would receive an annual payment for depreciation, a share of the rental income and a quantity of free rental time. Car-sharing schemes are believed to have originated in Switzerland in the 1940s as locals organized car cooperatives, with drivers handing car keys onto the next user when they had finished. It was in the 1970s that the schemes really took off in Europe. Today, the Dutch capital Amsterdam has 310 parking locations for shared cars. China’s car rental industry got started in 1991, according to the China Economic Weekly, but due to a lack of legislation, poor credit rating systems and the small size of companies it has only recently begun to expand, with around 10,000 car rental agencies in operation as of 2010. In 2011, the Ministry of Transport issued a circular on promoting the development of the sector, with instructions for the management and business models of car rental agencies, and urging local governments to improve legislation in order to promote growth.

BMW Expansion Denial May Signal Dimmer Automaker Outlook Bayerische Motoren Werke AG (BMW)’s failure to win government approval to expand a factory in China is fueling concern global carmakers could find it increasingly hard to get projects approved by regulators in the country. China’s Ministry of Environmental Protection said it sent back an application, citing inadequate wastewater analysis and the plan’s failure to meet government anti-pollution targets. Alexander Bilgeri, a spokesman at Munich-based BMW, said the ministry asked for additional documents and that the government decision on the project wasn’t final. Such events are routine, Bilgeri said. In the statement, dated July 26 and available on the ministry’s website, the government said it didn’t approve BMW Brilliance Automotive’s plans for the third phase of a factory in the northeastern Chinese city of Shenyang. The first phase of the plant has yet to pass an inspection, it said. The ministry approved the factory’s second-phase expansion in June 2012. The Economic Information Daily, one of the official Xinhua News Agency’s newspapers, reported July 29 that industry officials are increasingly calling for China to start an investigation into imported car prices. Profit from selling imported luxury cars in China was 30 percent higher than the global average, the newspaper said, citing the China Automobile Dealers Association’s executive vice president and secretary general, Shen Jianjun. Getting lower-level bureaus to sign off on manufacturing projects is among the first regulatory steps for foreign companies before they receive central government approval.

Major Effort Underway to Upgrade Emissions Monitoring and Forecasting China’s Ministry of Environmental Protection is collaborating with China Meteorological Administration to build PM2.5 forecast systems throughout the country, an upgrade from the real-time monitoring system that most cities use at present. The program could generate significant demand for PM2.5 monitoring and testing equipment.

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At the executive meeting of the State Council held on 14 June, China’s leadership passed 10 regulations regarding air pollution. Aside from measures to reduce discharge from heavy industry and vehicles, air pollution monitoring and forecasting was identified as being a strategic initiative. In order to predict air pollution, the monitoring stations need to accumulate data for a period of time. Since the majority of monitoring stations were built less than a year ago, the database developed thus far does not represent a large enough statistical sample to form the basis for making predictive forecasts. For this reason, the forecast system must be developed in a few cities for testing purposes before the nationwide roll-out occurs. Li Jianjun, an expert at the China Environment Monitoring General Station, said at a recent environmental protection forum that the initiative will begin with experimental projects in Beijing, Tianjin, and Hebei province, with a target of meeting technical requirements by the end of the year. The second test phase will take place in Shanghai and Guangzhou, he added. In February 2012, the Ministry of Environmental Protection announced a blueprint to finish the construction of PM2.5 monitoring stations in 338 cities by 2015. The total investment in the equipment used in the initiative is expected to exceed USD 326m (CNY 2bn), according to Chinese media reports.

Beijing To Shift To More LNG Buses to Curb Smog Beijing is replacing a high proportion of diesel buses, which contribute higher emission of PM2.5, with new clean energy buses, Beijing News reported. The city plans to buy 3,155 LNG (liquefied natural gas) buses, which will bring the total number of this kind of bus in use in the city to 5,681. Buses using renewable-energy or clean-energy account for about 40% of the city’s buses; and it has started energy-saving reconstruction work on all buses so that environmentally friendly ones will account half its total by the end of 2014, and 60% by the end of 2017, according to the Beijing Municipal Commission of Transport. BPT said all the Beijing buses had already met or even exceeded the National Emission Standards III (equivalent to Euro III standards), in 2012. Now, the use of green technology in transportation is expected to cut about 1.52 million tons of emissions, including 0.39 million tons of carbon monoxide, 1.07 million tons of nitrogen-oxygen compounds, and more than 52 tons of PM 2.5 (particulate matter less than 2.5 microns in diameter), every year. The paper said clean energy buses can reduce PM2.5 emissions by 97% compared with diesel buses. It conducted a test of PM2.5 emission at a bus transit hub station with Chen Guanghui, a volunteer from non-government environmental protection organization Nature University. It showed that readings of PM2.5 jumped to 557 from 80 micrograms per cubic meter in idle mode, and surged to 4,180 high after pushing down the pedal. Same tests of a LNG bus showed that PM2.5 readings only increased from 30 to 40 micrograms per cubic meter before and after acceleration.

Hong Kong Prepares to Implement New Air Quality Objectives as Emissions Rise While a new Hong Kong ordinance paves the way for implementation of more stringent air quality objectives starting on January 1, 2014, environmental watchdogs warn that pollution levels, particularly from roadside and marine emissions, continue to rise. Hong Kong is working to align

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its air quality objectives, or standards, more closely with World Health Organization recommendations on levels of sulfur dioxide, coarse and fine particulates, nitrogen dioxide, ozone, carbon monoxide, and lead through 2020. On July 10th, Secretary for the Environment Wong Kam-sing said that the new objectives “are broadly comparable to the air quality standards adopted by the European Union and the United States. Further underlining our ongoing commitment to protecting public health and improving air quality, we have also included a provision to review the AQOs at least once every five years in the new ordinance.” Hong Kong's Legislative Council passed the ordinance 0n July 10th. Hong Kong's air quality objectives had not been updated since 1987. Wong said the new objectives will be used in assessing air quality impacts from new development projects in the region. Wong also said the government of the Hong Kong Administrative Region (HKSAR) is implementing various measures outlined in a Clean Air Plan released in March. The government plan calls for replacing older vehicles, installing or replacing pollution control devices, and collaborating with neighboring Guangdong province on the Chinese mainland on regional air quality improvements. According to an analysis released by the Clean Air Network July 16, data from the first six months of the year collected by the Environmental Protection Department show air quality readings continued to exceed World Health Organization guidelines. Both sulfur dioxide and nitrogen oxides from roadside and marine emissions had increased significantly at several monitoring points, the group said. Sulfur dioxide and nitrogen oxides are the two major air pollutants impacting public health that the government hopes to reduce through its new objectives.

Study Recommends Keeping Hong Kong's Taxi and Minibus Fleet Clean The Environmental Protection Department has announced details of a subsidy program to replace catalytic converters and oxygen sensors on taxis and minibuses that are run on liquefied petroleum gas, and said that a more rigorous emission-testing regime for petrol and LPG vehicles will be implemented next April. Taxis and minibuses are a major source of roadside pollution, contributing to 39 per cent of nitrogen oxides and 55 per cent of hydrocarbon emissions in urban corridors; and nearly all taxis and two-thirds of minibuses are powered by LPG. Ironically, a decade ago, LPG taxis and minibuses were hailed as a clean alternative to diesel. At that time, the government offered incentives for taxi and minibus owners to replace their diesel vehicles with LPG ones. So why have these "clean" vehicles now become a source of choking pollution? Lack of maintenance is the root cause. Taxis and minibuses typically clock over 140,000 kilometers and 100,000 kilometers a year respectively. This means they are driven, respectively, over 13 times and nine times more than an average private car. While the fuel they burn is cleaner than diesel, these vehicles still need to rely on emission control devices (such as catalytic converters and sensors) to keep emissions low. But with such high usage, their emission control devices need more frequent repairs or replacement. The current mandatory annual emissions tests for petrol and LPG vehicles are not capable of identifying those with excessive emissions and do not measure nitrogen oxide emissions, as a

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recent Civic Exchange study discovered. So vehicles with defective catalytic converters (80 per cent of LPG taxis and 45 per cent of LPG minibuses) can still have their licenses renewed. The LPG story illustrates well why an inspection and maintenance program is a critical part of Hong Kong's vehicle emissions control efforts. For all the control measures - whether it is encouraging replacement of dirty trucks, retrofitting buses with nitrogen oxide after-treatment devices, or establishing low emissions zone for buses - the new or retrofitted vehicles need to be maintained well in order for the control devices to remain effective. Therefore, following the good example of upgrading the petrol and LPG vehicle emissions test, Freda Fung9 argues that the government should start developing an improved emissions-testing program for another important pollution source: diesel trucks and buses. And, as important as it is to keep in-use vehicles clean and well maintained, it is equally important that new vehicles become cleaner over time. To achieve that, she urged the government to set up a timetable for enforcing world-class vehicle emission standards, such as Euro 6 standards, or the world's strictest standards, adopted in California. This would enable Hong Kong to reap the benefits of the most advanced emission-control technologies being used on the cleanest cars and trucks.

59. Recent Developments in India

India Scandal Over GM Recall, Heads Roll, Government to Draft Mandatory Recall Policy

General Motors said it has fired “several employees” after violations of company policy led to the recall of 114,000 of its Chevrolet Tavera sport-utility vehicles in India. The recall of the popular model, built and sold only in India, came after GM employees reportedly swapped engines in new Tavera models for lower-emission engines to meet standards. The 114,000-vehicle recall is one of the largest in India’s history. Jolted into action by the recent roller coaster events, the government is now speaking of a mandatory recall policy for vehicles. Though General Motors initially indicated that it launched such a large voluntary recall on its own, according to press reports it seems that someone from the company alerted the Ministry of Road Transport and Highways (MoRTH) about several malpractices related to procurement of emissions certifications for the Tavera MPV model produced at its plant in India. The MoRTH forwarded this complaint to the Ministry of Heavy Industries, which then began examining the matter by forming a committee to probe the entire issue of vehicle testing, practices used and if the entire vehicle certification process needs an overhaul. GM reportedly got wind of the probe and then went ahead and announced a “voluntary” recall of vehicles which were manufactured and have been running on Indian roads for last eight years. Heavy Industries Minister Praful Patel told reporters his ministry is working on a mandatory vehicle recall policy to prevent recurrence of such instances in the future. Patel’s ministry may either suggest changes in the existing Motor Vehicles Act or draft a new law all together for mandatory recall of vehicles.

9 Freda Fung, a consultant with Civic Exchange, is director of Fung Research Limited

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He also said that though the GM incident appears to be isolated, this is a good time to look into the larger issue of quality control of vehicles being manufactured in India. Many companies claim vehicles are tested at several stages during the manufacturing cycle – by the company as well as through random checking by the regulatory and testing agencies. “There seems to be a tendency to give approvals without rigorous testing,” he said referring to several global vehicle manufacturers who have set up manufacturing in India. Since we in India tend to believe testing is more rigorous in European countries and USA, companies headquartered there are perhaps allowed more leeway when testing vehicles manufactured in India. The Detroit-based auto maker did not disclose the nature of the violations or specify the number of employees dismissed but said GM takes “these matters very seriously and hold our leaders and employees to high standards”. “When those standards are not met, we will take the appropriate action to hold employees accountable,” the company said. Other reports indicate that Sam Winegarden, vice-president for global engine engineering, and around 10 other employees in the US and India had been let go. Winegarden oversaw the production of engines across GM’s international vehicle range. The compliance lapse comes as GM, which began selling its Chevrolet marque in India in 2003, is battling falling sales in the country which has been hit by a sharp economic slowdown. GM has poured billions of dollars into plants and product development in India that it has described as a key to fuelling future sales. GM India president Lowell Paddock said in a published interview that the company identified the problems in June and “immediately consulted our parent and agreed on a recall”. “Our internal audit revealed inconsistencies in emission results,” he said. GM said it has stopped production and sale of the Tavera until it gets Indian regulatory approval for its “proposed solution” to the problems which the car maker says are not safety-related. India’s government, meanwhile, has formed a panel to probe the recall to decide if punitive action should be taken against GM, local media reported. Sanjay Bandopadhyaya, a senior transport ministry official, said GM could face fines and added the government was investigating the possibility of collusion with testing agencies. He added the government will check whether other car makers may have cheated to comply with emission norms. The panel, headed by Nitin Gokarn, CEO of the National Automotive Testing and R&D Infrastructure Project (NATRiP), is expected to submit its report in about a month’s time. “We are already in dialogue with ARAI and have told them that they should also check with other companies. We have to see to what extent the company, which has been incorporated long back, defaulted under the provisions of CMVR (Central Motor Vehicle Rules). We will go for the maximum penalty, which is R500 for the first car and R1,000 for the rest,” he said. Commenting on the possibilities of collusion with the government testing agencies, such as Automotive Research Association of India (ARAI), he said, “We are not saying no to anything. It will be considered. We have also ordered to fix the responsibilities, because people (buyers) would like to know about it since over a lakh vehicles have been recalled.” Lowell Paddock, president and MD at GM India, said, “Our internal investigation has uncovered no evidence of any collusion with government agencies.” Paddock added that the company is not yet aware of any penalties that the government may impose. RC Bhargava, chairman at India’s largest car maker Maruti Suzuki, said that rules need to be changed so that fudging is tough and there need to be more random checks at the production line

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by government agencies. “If you make rules making it easy for people to fudge, then don’t be surprised. Some rules are framed in such a manner that it encourages such behavior, like the fuel efficiency test earlier. What has happened at GM is an aberration, may be by some overzealous officials. I don’t think it’s the norm.” Over 300,000 vehicles have been recalled since India’s auto industry adopted a voluntary recall policy in July last year. Last August, Ford recalled over 110,000 vehicles in India to check for potentially faulty parts that could cause breakdowns or fires.

Tavera Recall Likely To Cost GM India Rs 500 Cr General Motors India may have to take a hit of around R500 crore10 as a result of its recent move to recall 1.14 lakh11 Chevrolet Tavera MPVs to align them with statutory emission norms. Around R285 crore will go into fixing diesel engines in the recalled vehicles in order to comply with India’s statutory BS III and BS IV emission norms. The company is also likely to face a penalty of about R11 crore under the Central Motor Vehicle Rules for misrepresenting emissions data to the Automotive Research Association of India, the official testing agency. After an internal audit prompted a production shutdown, no Taveras were sold in June and July, leading to a loss of R200 crore in potential revenues. GM India, which sold 1,700 Taveras every month during 2012-13, earns about R6 lakh per unit. (In Delhi, the ex-showroom price is R6.89-10.93 lakh.) For GM India, a loss-making company, the financial hit comes at a time when the entire sector is suffering from weak consumer demand. The company posted a loss of R746 crore in FY12, according to data submitted to the Registrar of Companies. Accumulated losses stand at R1,596 crore. Volumes for GM India rose 2.86% to 1.10 lakh units in FY12, but fell sharply by 19.90% to 88,150 units in in FY13. In April-June FY14, sales rose 9.09% to 23,267 units. GM – which started India operations in 1995 and sells cars under the Chevrolet brand – has a 3.83% market share in the 2.7-million unit domestic passenger vehicle

Diesel Price May Be Hiked By Rs. 2-3 per Liter to Offset Underrecovery The underrecovery on diesel has hit a five-month high of Rs 10.22 a liter for the second fortnight of August, causing a shock to the government’s phase-wise decontrol measures introduced in January this year. The rise in underrecovery is pushed by the rupee closing at the 61.71 mark to a dollar on Friday and a rise in international prices to $108.59 a barrel. The Centre had opted for a phased decontrol of diesel, with a monthly increase of 50 paise from January 17, till oil marketing companies (OMCs) are able to eliminate the loss on sales. The under recovery on kerosene and domestic liquefied petroleum gas (LPG) — calculated on a monthly basis — stood at Rs 33.54 a liter and Rs 412 a cylinder. Since the introduction of decontrol measures, the diesel figures had touched a peak of Rs 11.26 a liter in March, following which the gap had narrowed down to even Rs 3.8 a liter in May. There were speculations the government might go for a higher dose of diesel decontrol in order to bring down the under recovery figures.

10 Ten million 11 100,000

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According to ministry sources, companies like the Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation were repeatedly asking for a higher dose of monthly diesel price hike to recover this huge loss they are suffering. OMCs, effective from August 16, are incurring a combined daily underrecovery of Rs 389 crore on the sale of diesel, kerosene and domestic LPG, compared to Rs 379 crore during the previous fortnight. For the first quarter of the financial year, the overall under recovery for OMCs stood at Rs 25,579 crore. The losses on sensitive products during the last financial year was Rs 1,61,029 crore. Every fall in the rupee by of Rs 1 would cost them Rs 9,000 crore annually in the form of under recovery, while every $1 increase in crude oil prices would add another Rs 5,000 crore annually to the subsidy burden. The government is mulling a one-time hike of Rs. 2-3 per liter in diesel prices to offset the impact of a fall in rupee value; if approved by the Cabinet, the one-time hike will be over and above the 50 paisa per liter increase in rates that happens every month to cut down the difference between cost of production and retail selling price. Oil Minister M Veerappa Moily said the one-time and oil company suggestions are under consideration but no decision has been taken yet. Mr. Moily, however, said there is no proposal to raise LPG or kerosene rates. Complicating matters, a government decision to hike diesel prices by a steep Rs 3 per liter may lead to nationwide strikes and freight disruption by the transportation industry says the Indian Foundation of Transport Research & Training (IFTRT). Since the Rs 5 per liter diesel price hike on Sept 13, 2012, the "government has laid out a monthly diesel price hike off Rs.0.50 per liter (56 paise inclusive of local taxes) and the same has been continuing for last 8 months leading to cumulative diesel price hike of around Rs 4.60 per liter," said S P Singh, convener, IFTRT, and this has been accepted. However, in the past as and when the diesel price has been jacked up substantially in one go, transport operators have used the excuse to hike freight charges disproportionately and indulge in nationwide crippling strikes. To prevent that kind of blackmail, "the government and OMCs should stick to the 50 paise per liter hike in diesel price on monthly basis and maintain the equilibrium in the larger interest of road transport, trade, commerce and the common man," said Singh.

Petrol Cars Overtake Diesels After Fuel Price Increases Sales of petrol cars have overtaken their diesel variants after a gap of about 25 months spurred by a steady rise in the price of diesel, which has shifted consumers' interest from costlier diesel variants to cheaper petrol cars. Car makers are again changing production patterns with a bias for petrol variants, as there has been a spurt in its demand recently, industry executives said. Only 42% of customers bought diesel cars in the first quarter of this fiscal year compared to around 54% in the corresponding period previous year. According to industry data, auto manufacturers posted 12.5% increase in petrol cars sales last month, which happened at a time when automobile sector is facing a sluggish demand. But the fall in the sale of diesel cars is much sharper, automobile executives said.

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Fuel consumption data corroborate the changing trend. Although, the overall consumption of petroleum products including diesel sales had a negative growth in June this year, petrol consumption has shown a positive growth, the oil ministry's data-keeper, Petroleum Planning & Analysis Cell (PPAC) said in a latest report. "There has been a growth of 5.5 % in the consumption of petrol in June, compared to an abnormally high growth of 31.2% during May, 2013. But, diesel consumption in June recorded a negative 1.9% growth," an official in PPAC said. Consumption of petrol jumped by about 13% in April-June quarter this year while the growth of diesel was only 0.6%, the official said. But, PPAC officials cautioned that the trend could be reversed as the gap between diesel and petrol rates are increasing again because of sharp rise in international prices of the fuel and unprecedented depreciation of the rupee against the dollar.

World Bank Says Air Pollution Costing Economy Rs 3.75L Crore a Year Outdoor air pollution in urban areas claims 1.09 lakh lives of adults, another 7,513 of children below 5 years annually, says a recent report from the World Bank. The new study12 revealed that the annual cost of environmental degradation in India is about Rs 3.75 lakh crores, which is equivalent to 5.7% of the country's GDP. The study commissioned by the Central government has brought out how urban growth centers in the country are choking and claims that outdoor and indoor air pollution have the maximum share of this annual burden on India's economy. According to the estimates of the multilateral bank, outdoor air pollution accounts for 29%, followed by indoor air pollution (23%), cropland degradation (19%), water supply and sanitation (14%), pasture (11%) and forest degradation (4%). This first ever national level economic assessment of environmental degradation in India focuses on particle pollution (PM10) from burning of fossil fuels, which has serious health consequences amounting up to 3% of India's GDP along with losses due to lack of access to clean water supply, sanitation and hygiene besides natural resources depletion. The indoor air pollution is mainly due to burning of wood, mainly in rural India. PM10 stands for Particulate Matter up to 10 micrometers in size and include smoke, dirt and dust from factories, construction sites, farming and roads. According to the bank, annually over 3.7 lakh hospital admissions are reported in India due to outdoor air pollution in urban areas. Bank's environmental economist Muthukumara Mani said, "The productive part of the population that gets impacted from air pollution in cities, if you can save them, it is going to add up in terms of productivity, in terms of GDP," he stated. The study claims that nearly 25% of child mortality cases in India can be attributed to environmental degradation and due to inadequate availability of clean water and sanitation. Mani said that small steps can help improve the situation in a big way. "Improving the efficiency of a power plant, which is a major cause of air pollution in India. For example, washing coal is a simple process - not too expensive - which can also help in not only improving the efficiency of coal, but also save a lot of lives," he said.

12 “Diagnostic Assessment of Select Environmental Challenges in India”

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According to the report, India can make green growth a reality by putting in place strategies to reduce environmental degradation at the minimal cost of.02% to .04% of average annual GDP growth rate.

Delhi Government Sends Air Pollution Agenda Back for Sharpening The much awaited 'Agenda for Air Pollution Control', which seeks to meet the ambient air quality standards in Delhi by 2017, came up before the cabinet chaired by chief minister Sheila Dikshit recently but was sent back to the drawing board. While Dikshit has allegedly asked for a sharper plan with a clear roadmap to ensure implementation, it is also evident that the government wants to tread carefully and not stir up controversies on parking, urban transport and traffic just months before the elections. While environment department officials prepare to sharpen the plan, chances of the agenda making it back to the cabinet for a final decision before the code of conduct for the assembly polls comes into effect seem low. Sources in the department said they did not have the mandate to issue directions to other departments and, hence, the proposal was generic or "open ended". "The cabinet needs to clear it first before specific directions to other stakeholder departments can be issued. However, we will now work towards making the agenda sharper, more focused and look at specific actions that can be taken under each of the 10 action points," said a senior official. With over 74 lakh vehicles in the city, transport is a major issue under consideration in the agenda. More than 55% of Delhi's population is living within the influence zone of roads and is highly vulnerable to toxic vehicular fumes. To reduce vehicular emissions, it has been proposed that Euro V and VI fuel emission standards should be introduced for new vehicles. For on-road vehicles, stricter pollution control norms and establishment of centralized emission testing centers has been proposed. Border checks on overloading vehicles, diversion of non-destined trucks, fast-tracking of expressway construction and chalking out an inter-state public transport plan are also on the cards. A public transport plan to reduce number of vehicles in the city has also been proposed and is to be framed by officials of DTC, transport department, DDA, DMRC, UTTIPEC, environment department, DPCC and EPCA. This committee will also conduct traffic impact assessment for projects requiring an environmental clearance. The agenda has also focused on an effective parking policy. Besides spreading awareness, the agenda has also proposed transit-oriented zones and pro-poor mobility systems through zonal plans for implementation of a non-motorized transport network. The agenda has also proposed the adoption of dust control regulations for the construction industry and vehicular traffic. Sources told the press that Dikshit asked the Environment Department to specify how it plans to penalize the offenders. They said the environment department, in its proposal, recommended strict penalty against those who violate norms for checking pollution by their vehicles. The sources said at least two ministers had opposed the proposal by the environment department as "tough measures" like enhancing the penalty on violators could create a negative impact ahead of the assembly election which is slated for November. According to the action plan, strict action

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will be taken against owners of vehicles if the emission levels exceed the permissible limit, especially against those vehicles entering the city from neighboring states.

Study Finds High Toxin Levels in Air High levels of polycyclic aromatic hydrocarbons (PAHs), a group of toxic carcinogens, have been detected in the air in various parts of the city. A study conducted in Ambattur, Kolathur, Saidapet and Egmore by the department of environmental management, Bharatidasan University, Tiruchy, showed the average concentration of particle-associated PAHs ranged from 325.7 to 790.8 nanogram/cubic meter — an alarming pollution level — in Chennai. According to Anumita Roychowdhury, executive director, research and advocacy, Centre for Science and Environment (CSE), the study was published in 2011, and the high PAH levels were attributed to increasing vehicular traffic. The maximum PAH level of 790.8 nanogram/cubic meter was recorded in Egmore (urban commercial area), followed by the industrial hub of Ambattur (582.9 nanogram/cubic meter). “PAHs are mostly emitted by diesel vehicles. There is a need to spruce up air quality monitoring to track these toxins,” she said. Ms. Roychowdhury was speaking at a city dialogue on clean air and sustainable mobility. “We need to move to cleaner diesel that has less sulfur content,” she said. Former Central Pollution Control Board scientist Manoharan said heavy vehicle manufacturers could look at making vertical vehicle exhausts so the impact of pollution on human beings is reduced. Bhure Lal, chairman, Environment Pollution Control Authority (EPCA), said more States were becoming aware of the problem of air pollution and setting up monitoring stations.

Biden Calls on India to Phase Down HFCs, Step Up Efforts to Address Climate Change

On July 24th, Vice President Joe Biden urged India to phase down its use and production of hydrofluorocarbons (HFCs) and take more “concerted action” to address climate change. In a speech at the Bombay Stock Exchange in Mumbai, Biden called on Indian leaders to work with the United States, China, and 100 other countries “within the Montreal Protocols” to reduce its use and consumption of HFCs. HFCs are used in air conditioners, refrigerators, and as sealants. Use of HFCs is growing rapidly, as the substances were identified as replacements for ozone-depleting substances under the Montreal Protocol. HFCs do not deplete the ozone layer, but many are highly potent greenhouse gases, with some having many times the global-warming potential that carbon dioxide has. Biden warned that rising sea levels caused by climate change would endanger the lives of “tens of millions” of people in India and hinder the country's ability to grow. While pointing to the global implications of failing to act on climate change, Biden stressed that India needs to take steps for its own sake. Todd Stern, U.S. special envoy for climate change, told reporters on July 18 by phone following a multilateral Major Economies Forum on Energy and Climate meeting in Poland that the United States had formed a climate working group with Indian officials during a June visit by U.S. Secretary of State John Kerry that was “just beginning” its work.

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Calcutta City Leading The Way Back To Petrol Cars?

In a season of slump that has seen automobile manufacturers trying to ride the rough with new models and even Honda biting the diesel bait, car buyers in Calcutta have reposed their faith in petrol, the traditional fuel of choice for the family car. “Calcuttans have always driven petrol cars,” declared industry analyst Rahul Khanna. “There was a period when the growing gap in fuel pricing had skewed the balance in favor of diesel but petrol has made a comeback in this city.” Showroom statistics reflect the reverse trend, a conundrum for an industry that still sells many more diesel variants than of petrol elsewhere in the country. Almost every carmaker has seen a return to a more balanced diesel-petrol ratio in the Calcutta sales charts. If there was any doubt in the minds of petrolheads drawn towards diesel, it was removed by the government’s move to decontrol the price of diesel. The gap is still substantial but the arithmetic of owning a petrol car looks better for the Calcuttan looking for a refined, low-maintenance drive. Diesel prices have risen seven times in Calcutta so far this year to reach Rs 55.16 a liter, against Rs 50.98 in January. The price of petrol is Rs 76.10 a liter, against Rs 75.03 in January. For all the hoopla about diesel being cheaper than petrol, experts say that it is still more economical for the average vehicle owner to drive a petrol variant of a passenger car. Taking the price of petrol to be between Rs 74-78 per liter and the Rs 1 lakh or more extra that a diesel variant of any car costs, the owner has to do about 70,000 to 80,000km a year to break even. Someone driving within Calcutta, where the average distance between two destinations is considerably shorter than in Delhi, would require at least five to seven years of car use to finally reap the economy of diesel. Just that by this time, most owners would be ready to replace their vehicles! Some recent examples of the changing trend include:

Maruti Suzuki, which had waiting periods running into months for diesel models of the Swift, Swift Dzire and Ritz, is in the middle of a slump. “We no longer have waiting periods for the Swift and Ritz,” a spokesperson for the company said from Delhi. “Diesel had accounted for less than 15 per cent of our sales in 2011-12, rose to 20 per cent in 2012-13 and then declined to 16 per cent.” Even the diesel version of the new multi utility vehicle Ertiga doesn’t have as long a waiting period as it did before fuel pricing broke free of the shackles of subsidy. “Ertiga had a 10 to 12-week waiting period that has come down to eight to 10 weeks,” said a sales manager at Bhandari Automobiles.

A sales executive at Mukesh Hyundai has more telling statistics to share. “The sale of

diesel cars has dropped 30 per cent while petrol cars are going out of the showroom more than they did in the past two years. Since last November, 90 per cent of the enquiries have been for petrol cars,” he said. A customer no longer has to wait for an i20 or Verna diesel. Until a year ago, the waiting period for both was 90 to 100 days. “Previously, the diesel-petrol mix stood at 80:20 for our Verna and Elantra models. That has come down to a ratio of 50:50. In the case of i20, the mix stands at 20:80,” the sales executive said.

Tata Motors, whose forte is diesel technology, has started feeling the pinch. “As it is, the

automobile market is down. Car sales have hit a plateau,” rued Vinod Agarwal of Lexus Motors. The increased preference for petrol has made the market gloomier still for Tata Motors. “The petrol-diesel ratio for Tata vehicles was 10:90 before deregulation. Today, it stands at 15:85,” said Anil Bagaria of KB Motors. “The most affected model is the Vista. We are selling more petrol Vistas than ever before.”

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Chevrolet dealer Rajesh Sanei echoed the market sentiment. “Since November, we have

been selling two to three models more of petrol.”

Nissan seems to be the only one to have bucked the trend, showing growth in the diesel segment. “The petrol-diesel mix has changed for us from 70:30 to 60:40,” a company official said.

Ashok Manaktala of Topsel Toyota said the product mix of the world’s largest automobile

manufacturer at its Calcutta showrooms had changed with the deregulation of diesel pricing. Of the 20 Corollas Manaktala sells in a month, 16 are petrol variants. “In the Etios range, we sell 65 petrol and 35 diesel variants a month,” he said.

Honda is the one company that is benefiting both ways. Its City and Civic models had lost

the leadership position in their respective segments as the price of petrol soared but Amaze, its first diesel car, has hit the sweet spot thanks to the promised mileage of 25.8km to the liter. “Demand for petrol is back and the Amaze, which also comes with a diesel option, has blazed a trail. The diesel-petrol mix is 50:50,” said Sanjay Lamba of Pinnacle Honda.

The only segment that hasn’t witnessed any change in demand pattern is the luxury troika of BMW, Audi and Mercedes. “Audi has not been impacted (by fuel pricing) at all,” said Sandeep Bajaj of Audi Calcutta. Ditto BMW OSL Prestige. At Mercedes, too, it’s business as usual with a 75:25 diesel-petrol mix. Much of this, of course, wouldn’t make sense to automobile reviewers who have turned into diesel evangelists. “Diesel is available everywhere...diesel engines are less sensitive to fuel quality. And they don’t shudder or explode anymore,” wrote one columnist. But Calcutta has shown itself to be resistant to assembly-line thinking. “The price difference between petrol and diesel will shrink. And since diesel cars are costlier than petrol models by at least a lakh, we will certainly see more petrol cars selling,” said a Chevy dealer.

Any dip in the sale of diesel vehicles is good news for environment say experts who maintain there are greater benefits to be had through the shift back to petrol. “Any reduction in the number of diesel cars can give enormous air-quality and, by extension, health benefits. Diesel emissions have been reclassified by the

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WHO as Class I carcinogen, putting it in the same class as tobacco,” said Anumita Roy Choudhury of the Delhi-based Centre for Science and Environment. This is, of course, an unending debate. The automobile industry’s refrain is that modern diesel cars satisfy strict emission norms. Some even classify diesel as the cleaner fuel. But those like Roy Choudhury insist that diesel has always got away with murder. “Even under the emission standards that you follow, a diesel car is legally allowed to emit more particulate matter and three times more nitrogen oxide compared to a petrol car,” she said. The presence of both these pollutants in Calcutta’s air is high. The level of fine particulate is almost double the national permissible standard.

60. Ex-Im Bank Won't Finance Vietnam Coal-Fired Power Plant The U.S. Export-Import Bank board of directors has voted not to proceed with the financing of U.S. exports to help build a coal-fired power plant in Vietnam, following a plea from U.S. environmental groups to stop the project. The Ex-Im Bank board decision was made after a "careful environmental review" of the 1,200-megawatt Thai Binh Two power plant, according to a statement from the Ex-Im Bank, citing a bank official. Five environmental groups wrote to President Barack Obama earlier this week, calling the project "the first crucial test case" of his recently unveiled action plan to address global climate change. They included Friends of the Earth, Greenpeace USA, Pacific Environment, Center for International Environmental Law and Center for Biological Diversity. "The Thai Binh II coal plant ... would use outmoded subcritical boiler technology, a violation of your Climate Action Plan and the Export-import Bank's environment policy. As such, this dirty coal plant will emit unacceptable air pollution that will worsen climate disruption and poison local communities," the groups said. Under Ex-Im Bank policy, the board conducts an environmental review of high carbon intensity projects before considering financing. That spares the bank and exporters unnecessary expense if the project is turned down on environmental concerns, the bank official said.

61. Australian Government Unveils Draft Bill to Fast-Track Move to Emissions Trading On July 25th, Australia's government released draft legislation to implement its proposed move from a fixed carbon price to emissions trading on July 1, 2014. This follows a July 14th announcement by Prime Minister Kevin Rudd that the government intended to move a year earlier than scheduled to emissions trading, which would trigger a significant drop in Australia's carbon price for the 2014-15 financial year. On July 25th, Climate Change Minister Mark Butler said the early shift to trading would likely result in a carbon price in 2014-15 of A$6 [$5.50], “75 percent lower than under the current fixed price arrangements.” That's because Australia's carbon price regime is designed to partially link to the European Union's Emissions Trading System once trading begins, so that Australian businesses can use European allowances to help meet their scheme obligations. Prices in the much larger EU market will largely determine Australian prices once linkage occurs, and EU allowances (EUAs) are currently trading at a much lower level than Australia's current carbon price.

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In addition to advancing the start date for emissions trading, the bill would allow the government to issue a regulation setting a cap on total 2014-15 financial year emissions by companies with obligations under the carbon price scheme. If Parliament disagreed with the level of the cap and disallowed the regulation, then a default cap set at 25 million metric tons below the total 2012-13 emissions of companies covered by the scheme would apply. Industry groups have generally welcomed the prospect of an early move to emissions trading, although some have campaigned for a comprehensive repeal of the pricing scheme. Environmental groups and climate change action advocacy groups have also cautiously welcomed the announcement, on the basis that a lower price could allow Australia to specify a more ambitious national target for emissions reductions. Comment on the draft legislation will be accepted through Aug. 15. Rudd said the change would slash A$3.8 billion from the federal budget over the forward estimates period. He said his government would make up the gap with savings of around A$3.9 billion from a range of measures. The tax was due to raise A$8.14 billion in 2013-14, and A$8.6 billion in 2014-15. The policy shift would see the cost of carbon permits fall from the planned A$25.40 ($23.09) per metric ton from July 2014 to around A$6 per metric ton, Rudd said, saving big businesses billions of dollars in carbon costs. But Rudd's new carbon plan is reliant on his center-left Labor Party winning national elections, due between late August and November, and receiving support from the minority Australian Greens party. The conservative opposition has promised to scrap the carbon price altogether if it takes power, with opposition leader Tony Abbott dismissing the ETS as a "so-called market in the non-delivery of an invisible substance to no-one". The measures by which Rudd's government plans to make up the budget gap after the scrapping of the carbon tax include the removal of a tax concession on the personal use of salary-sacrificed or employer-provided cars.

62. Southeast Asian Ministers Back Haze Monitoring System but Not Release of Data On July 17th, Southeast Asian countries concerned about haze resulting from fires in Indonesia recommended adoption of a monitoring system that features digitized land-use maps and maps of development concessions in certain fire-prone areas but balked at public release of the data. Fires burning on the Indonesian island of Sumatra have resulted in clouds of ash that drift over Singapore and Malaysia and produce recurring environmental and health problem. A meeting in Kuala Lumpur, Malaysia, to discuss the haze was attended by ministers from Indonesia, Singapore, Malaysia, Thailand, and Brunei, all members of the Association of Southeast Asian Nations (ASEAN). The ministers signaled their commitment to deal with the long-term causes of the haze while stressing offers of help. Ministers agreed to recommend that countries adopt the Singapore-developed ASEAN Sub-Regional Haze Monitoring System, calling it a “useful tool” in the official communiqué. Pending

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approval at an ASEAN Leaders Summit in October, the system—featuring digitized land-use maps and maps of development concessions in certain fire-prone areas—could be shared among governments, the communiqué added. Singapore urged that the data be made public so more pressure could be applied to companies and individuals who use fires to clear land, but the idea was rejected after several members cited legal problems with it. Nigel Sizer, director of the World Resources Institute's Global Forests Initiative, said, “The lack of commitment to public disclosure is a serious obstacle to progress. Unless the governments elect to make concession data public, companies committed to sustainable sourcing of palm oil and other products cannot reinforce the efforts of governments and others with market pressure. Furthermore, without the concessions maps, the media and concerned citizens cannot monitor government efforts and help ensure those responsible for illegal fires are held accountable.” While the ministers praised the steps Indonesia has taken to control the fires, they acknowledged the need for better early warning systems of burning and haze. Malaysia and Singapore volunteered to renew existing collaboration with Indonesia and extend cooperative activities to other parts of Sumatra. One subject on which the communiqué was muted was Indonesia's failure to ratify the ASEAN Agreement on Transboundary Haze Pollution. The ministers commended the government for its “commitment to expedite the process of ratification,” a key concern of other countries, but did not detail discussions. Officials were not available for comment.

63. Taiwan EPA Joins NASA in Monitoring Air Pollution The ROC Environmental Protection Administration cooperated with NASA and six other nations in the region to set up the Seven SouthEast Asian Studies (7-SEAS) network to monitor air pollution, the EPA said on August 13th. NASA is the main organizer of the project, the EPA said, which includes agencies from Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. 7-SEAS aims to monitor how air pollution generated by slash and burn farming and the burning of agricultural waste moves across borders. It also looks at the interaction between pollution from such biomass burning and the environment, radiation and the atmosphere. The monitoring began in February, with measurement stations located in such places as the Thai-Myanmar border; northern Vietnam; Mount Lulin and Hengchun in Taiwan; and Taiping Island and other ROC islands in the Pratas and Spratly archipelagos. Precision instruments were used to measure air quality and pollutants over a four-month period. A total of 14 Taiwan agencies and research bodies joined in the monitoring this year, including the EPA, the National Science Council and Taoyuan County-based National Central University, the EPA said. Time was specially allocated from the experimental schedule of Taiwan satellite FORMOSAT-2 for it to produce high resolution images of the affected areas of the South China Sea to aid in the comparative analysis of the results. Taiwan’s participation demonstrates it has the requisite technological skills that are up to international standards in atmospheric quality measurement and has the potential to become a center for monitoring Southeast Asian air quality, the EPA added.

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As part of the 7-SEAS project, the EPA took measuring devices to Thailand’s Doi Ang Khan National Park. Besides determining the chemical signature of pollutants being produced by biomass burning on the Indochinese peninsula, the research also showed that pollutants were carried more than 3 kilometers high into the atmosphere where air currents were able to transport them to Taiwan, affecting air quality in Hengchun and on the western plains. Taiwan is situated downstream of major Southeast Asian air currents, the EPA said, so in 2009 it collaborated with the Coast Guard Administration, Dongsha Marine National Park, Kaohsiung City Marine Bureau, NSC and NTCU to set up a monitoring station on the Dongsha Islands. In 2010, in cooperation with NASA, another measuring device was added, and in 2012 a solar radiation meter was installed on Taiping Island. (SDH) "Our facility has allowed scientists to compare different data for more accurate results," said Chu Yu-chi, director of the EPA's Department of Environmental Monitoring and Information Management. It is also the first time Taiwan has contributed to international aerosol research through providing its own equipment, Chu said, adding that the findings will be published in "Atmospheric Environment," a scientific journal, by the end of 2013. The EPA will further examine the data to better draw up future environmental policies, Chu added.

64. Victoria Drivers Could Face $1000 Bill to Fix Up Clunkers Tens of thousands of motorists will have to pay about $1000 each to have old bombs and hotted-up cars repaired under tough new emissions and noise controls. Drivers who refuse to fix their cars would be fined and repeat offenders would face having their registration suspended. The new regulations, expected to be introduced in December, are detailed in a report by the state's Environment Protection Authority into the effects of vehicle air and noise emissions limits. The report says that in the first year about 8100 motorists would be expected to be caught for pumping out too much pollution, or being too loud. If those motorists want to keep driving their cars, the EPA estimates that repairs and testing fees would be about $1261 each. Over the next decade, the report says almost 81,000 cars are likely to break the regulations, with the average costs of repairs and testing over that period being about $1000 a vehicle. New limits mean that most cars would be banned from pumping out exhaust smoke for "a continuous period of 10 or more seconds", and that their noise would be no more than five decibels above the level "established for the vehicle when it is certified". "The beneficiaries of the regulations are the Victorian environment and the wider Victorian community, with reduced emissions leading to improved overall health and amenity outcomes," the report says. The net value to the community was estimated at $249.3 million over 10 years, while the cost to motorists would be $56 million over the same period. Royal Automobile Club of Victoria (RACV) public policy manager Brian Negus questioned the accuracy of the figures supplied by the EPA. "My initial response is that we need to be very careful in looking at their stated benefits - they seem to be very high," Mr. Negus said. "We would support remaking the current regulations ... but as to extending it to some of the areas where there are huge costs involved, there needs to be very careful consideration of that."

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Environment Minister Ryan Smith's spokesman James Martin said the updated regulations were aimed at excessively smoky or noisy vehicles. "These are normally associated with poorly maintained clunkers, or hotted-up cars that contribute to poor air quality, exacerbate health issues or result in sleep disturbance," Mr. Martin said. The EPA report says new regulations would enable easier detection of polluting vehicles as the "EPA anticipates using remote sensing to increase the ability of detecting high-emitting vehicles". It also expected restrictions on petrol vapor emissions at service stations would cost the industry more than $100 million in the next 10 years, a cost likely to be passed to motorists. The report says emissions limits would be a better tool than mandatory testing, which would have seen 25,000 light commercial vehicle drivers forced to get special services, costing about $437 a year.

65. Diesel Driven Growth in Nepal With increases in the price of petrol, consumers are now attracted to more economical diesel engine cars. Although diesel run cars were ignored earlier due to higher prices and the requirement of extra care and maintenance, they are now growing popular among customers who are lured by the cheaper fuel cost along with the greater mileage that such vehicles offer as compared to their petrol counterparts. Since diesel engine embedded cars have proven to be more economical on the pocket when compared to petrol driven ones, many auto enthusiasts these days are exploring the option of diesel run cars. “In recent times, we have witnessed a notable growth in the demand of diesel run cars,” said Prabin Khatiwada, head of passenger car business unit at Sipradi Trading, authorized distributor of Tata Motors. Citing that they have introduced almost all the models of cars in both diesel and petrol versions, he said, “The ratio of diesel and petrol car sales from Tata stable is 70:30.” According to him, the major reason behind the growing preference of diesel cars among customers is because of cheaper fuel price, greater mileage and only slightly more expensive than petrol cars. Along with this change in customer preference, most new models across segments now try to introduce both petrol and diesel versions. This figure has escalated in the past couple of years. Compared to few years back, diesel engines are now far more refined, efficient and qualitative. They were previously considered unreliable and too noisy, but along with the evolution of technology and innovative techniques, diesel cars have transformed into much more reliable and quieter vehicles that emit lesser carbon dioxide. In this backdrop, diesel-run cars are gaining ground as a smart choice. The domestic auto market is flooded with diesel models, as auto manufacturers witness the benefit in bringing in diesel run cars that ensure outstanding performance with good fuel economy.

66. New Zealand Scales Back Its Greenhouse Gas Reduction Goal New Zealand has scaled back its target for reducing carbon emissions, saying the move was an interim step ahead of a new United Nations pact from 2020. The government said it would commit to cutting greenhouse gas emissions to 5 percent below 1990 levels by 2020; previously it had indicated that it would look at a cut of 10 percent to 20 percent.

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Last November, New Zealand said it would commit to an emissions reduction target under the U.N. Framework Convention on Climate Change, which is not a legal treaty, rather than sign up to second deal under the Kyoto Protocol. It had previously said its target would be influenced by global progress in tackling emissions, particularly in major developing economies such as China and India. United Nations climate talks in South Africa in 2011 agreed to sign an international deal in 2015 that would impose binding emission cuts from 2020. "Taking this 2020 target allows us to take action in the interim, while the shape of this new agreement is being determined," Groser said. The European Union has a target of cutting emissions by 20 to 30 percent below 1990 levels from 2020, Australia has said it would cut by at least 5 percent, and possibly by up to 25 percent, and Britain aims to cut emissions to 50 percent of 1990 levels by 2027. About 70 percent of New Zealand's electricity comes from renewable hydro, geothermal, and wind generation. The government's announcement has drawn criticism from the country's two main opposition parties. The Labor Party's climate change spokeswoman, Moana Mackey, said that the government's decision will “do nothing to restore credibility to our clean green image.” “We are the last developed country to announce a target and we still haven't seen any plan as to how the government expects to achieve even this very modest reduction,” she said. Green Party co-leader Russel Norman said that as a small country, New Zealand is reliant on larger countries to reduce their emissions to avoid serious consequences of human-caused climate change. “We can't expect them to act to save our bacon while we freeload,” he said. However, Climate Change Minister Tim Groser said the new target is affordable and demonstrates that “New Zealand is doing its fair share to address global climate change.” “In deciding this target, the government carefully balanced the cost to New Zealand households and businesses against taking ambitious action to tackle climate change,” he said.

MIDDLE EAST

67. Bosch MEA Diesel Systems Sales up 25% In First Half of 2013 Bosch Automotive Aftermarket, Middle East and Africa has recorded an increase of 25 per cent in sales of its diesel systems in the first half of the year as against the same period last year. Clean technology and increasing popularity of diesel engines in commercial vehicles are the reasons behind the remarkable growth and sales volume of diesel systems, added Guido Gring, vice president of Bosch MEA. Diesel systems for commercial vehicles have consistently been on an upward sales growth curve year-on-year, even during the global economic downturn a few years ago, Gring said. “In 2012, Bosch diesel systems accounted for about half of our overall sales revenue for the automotive business sector in the Mena region,” said Gring. “Half way through 2013, our diesel systems division continues to lead the way.” “The combination of Bosch common-rail technology and exhaust-gas treatment is guaranteeing a sustainable and successful future for the diesel engine. The commercial vehicles diesel systems growth for Bosch in the Mena region in 2013 is also reflected in sales of our common-rail systems,

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which for the first six months this year have increased by more than 40 per cent versus the same period last year.” Research has found that diesel vehicles emit up to 25 per cent less CO2 less than comparable vehicles with gasoline engines. Not only are they more eco-friendly, diesel engines are also far more efficient – in terms of fuel consumption, the diesel engine is about 30 per cent more efficient than a comparable gasoline engine. “Businesses using commercial vehicles are driven by ownership costs, and the diesel engine is ideal for commercial vehicles that clock up to 10,000kms or more per year,” concluded Gring. “Manufacturers, dealers, and end-users in the Middle East are now more environmentally conscious and this is driving demand for diesel technology. Bosch is a world-wide leader in that respect – the technology that we use is in our diesel systems is safe, efficient and durable.” –

68. GMC Mideast Sales up 8% In July GMC recorded its best ever July sales in the Middle East, with a total of 3,180 GMC vehicles sold, up from 2,946 in July 2012, marking an increase of 8 per cent year-on-year. Sales of the Terrain crossover rose 29 per cent compared to the same period last year. Figures increased 17 percent year-on-year in the UAE and 8 percent in Saudi Arabia, GMC’s largest market in the Middle East. Meanwhile, sales of the Yukon full size SUV, GMC’s most popular nameplate, jumped by 19 percent year-on-year in July across the region driven by strength in the UAE and Saudi Arabia. Sales in both countries rose 42 per cent and 22 per cent respectively. Dealers recorded best July sales in 8 years for the Sierra heavy duty pickup, as figures jumped 35 per cent compared to the same period last year.

69. Saudi Car Imports Edge 1 Million In 2012 Saudi Arabia imported 982,000 vehicles in 2012, as against 737,000 in the preceding year, marking an increase of 33 per cent. The value of vehicle imports in 2012 reached SR76.6 billion ($20.4 billion), reflecting an increase of 42 percent over 2011, the Saudi Gazette quoted the Central Statistics Department (CSD) report published by Al-Madinah newspaper. The US claimed the top spot as a car exporter to Saudi Arabia for the second straight year, with South Korea taking the second place, beating Japan into third place. The CSD report highlighted that the value of 215,000 car exports from the US to Saudi Arabia amounted SR20.59 billion, while 207,000 cars were imported from South Korea.

70. Israel to Electrify Its National Train System; First Electric Buses Launched Israel's national train system will be electrified between 2015 and 2020, the National Infrastructure Committee decided on August 13th. The approval will allow Israel Railways to move forward with a tender whose pre-qualification phase already includes seven international consortiums. The decision followed the deployment of Israel's first electric buses on August 6th. Calling the railway program a “top priority,” Transportation Minister Israel Katz said in a statement that electrifying the trains will significantly reduce pollution and increase both the reliability of trains

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and passenger comfort. Electrifying some 420 kilometers (261 miles) of existing and planned rail lines, adapting transformer stations, acquiring and converting rolling stock, and building a new control system will cost about 11.2 billion shekels ($3.1 billion), the ministry said. The first lines are expected to be electrified in 2015, but fast trains between Israel's two largest cities, Tel Aviv and Jerusalem, are not scheduled for launch until 2018, before the project's completion in 2020. The committee approval follows the settlement of a number of disputes and objections, including an agreement with the Environmental Protection Ministry to reduce permissible electro-magnetic radiation levels near the tracks from a daily average of six MilliGauss to four MilliGauss. Owners of private or industrial buildings near the tracks will not be eligible for damages, the committee determined, although it did agree to shift part of a contested, elevated line planned to run along the Haifa shore to an alternate location. Israel Railways Chief Executive Officer Boaz Tzafrir welcomed the committee approval, stressing in an August 13th statement that his company aims to lead Israel into a “new era.” “Our ability to move trains faster and longer will allow us to carry more passengers safely and in the shortest time from point to point,” Tzafrir said. This will “sharply increase the number of passengers choosing the train, and as a result [there will be] fewer motor vehicles, fewer accidents and less air pollution,” he added. The committee decision came only days after the August 6th rollout in Tel Aviv of the country's first electric buses. The Dan Bus Cooperative imported the bright orange buses from China's BYD Group. They will provide a smoother, quieter ride for passengers while producing far less polluting exhaust than the diesel buses dominating Israeli public transportation today, the company said. Dan Chairman Michael Nagar said the company plans to replace about a quarter of its 1,000-bus fleet with electric models within five years, at a cost of 400 million shekels ($112 million). The electric buses will run for 100 kilometers (62 miles) on 100 kilowatts of electricity, and can be recharged for about 6,000 cycles, the company said. The technology will reduce the company's energy costs per bus by about two-thirds and save another 25 percent in maintenance costs in comparison with diesel buses, the company said. In addition to China and Israel, BYD (an acronym for “Build Your Dreams”) is also providing electric buses this year to the Netherlands, Finland, Denmark, Uruguay, Colombia, Canada, and the United States, a spokesman said at an August 5th launch ceremony.

GENERAL

71. Automobile Production Sets New Record in 2012 World auto production set yet another record in 2012 and may rise even higher during 2013. According to London-based IHS Automotive, passenger-car production rose from 62.6 million in 2011 to 66.7 million in 2012, and it may reach 68.3 million in 2013. When cars are combined with light trucks, total light vehicle production rose from 76.9 million in 2011 to 81.5 million in 2012 and is projected to total 83.3 million in 2013. Just four countries—China, the United States, Japan, and Germany—produced 53 percent of all light vehicles worldwide, and the top 10 accounted for 76 percent. At 18.2 million vehicles, China

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produced almost as many as the next two countries—the United States and Japan—combined. Germany's and South Korea's production is declining slightly, while that of India, Brazil, Mexico, Canada, and Thailand is rising. Alternative vehicle propulsion technologies are slowly becoming more prominent, driven by a desire to reduce dependence on petroleum and the need to reduce air pollutants and greenhouse gas emissions. Alternatives include so-called hybrid vehicles that use both a conventional internal combustion engine and an electric motor, as well as a variety of electric vehicles (EVs), such as plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs), and fuel cell electric vehicles. The cumulative number of hybrid vehicles sold worldwide as of early 2013 was about 6.3 million. Between late 1997 and March 2013, Toyota—the leading hybrid manufacturer—sold nearly 5.13 million hybrids worldwide, or 81 percent of the global total.

72. Traffic Fumes and Air Pollution Double the Risk of Autism

Babies who are exposed to traffic pollution in the womb and in their first 12 months of life are more likely to develop autism, a new study has found.13 Exposure to traffic fumes and industrial air pollution can dramatically increase a mother’s chances of having a child with autism. Autism is developmental disorder that interferes with social and communication skills.

Researchers from the Harvard School of Public Health found the risk was doubled for women living in the most polluted locations. The scientists found a clear link between being pregnant in a location with high levels of pollution and having an autistic child. “Our findings raise concerns since, depending on the pollutant, 20% to 60% of the women in our study lived in areas where risk of autism was elevated,” said lead author Andrea Roberts, research associate in the HSPH Department of Social and Behavioral Sciences. Exposure to diesel particulates, lead, manganese, mercury, methylene chloride and other pollutants are known to affect brain function and to affect the developing baby. Two previous studies found associations between exposure to air pollution during pregnancy and autism in children, but those studies looked at data in just three locations in the U.S.

13 “Perinatal air pollutant exposures and autism spectrum disorder in the children of Nurses’ Health Study II participants,” Andrea L. Roberts, Kristen Lyall, Jaime E. Hart, Francine Laden, Allan C. Just, Jennifer F. Bobb, Karestan C. Koenen, Alberto Ascherio, and Marc G. Weisskopf, Environmental Health Perspectives, online June 18, 2013

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The researchers examined data from Nurses’ Health Study II, a long-term study based at Brigham and Women’s Hospital involving 116,430 nurses that began in 1989. Among that group, the authors studied 325 women who had a child with autism and 22,000 women who had a child without the disorder. They looked at associations between autism and levels of pollutants at the time and place of birth. They used air pollution data from the U.S. Environmental Protection Agency to estimate women’s exposure to pollutants while pregnant. They also adjusted for the influence of factors such as income, education, and smoking during pregnancy. The results showed that women who lived in the 20% of locations with the highest levels of diesel particulates or mercury in the air were twice as likely to have a child with autism as those who lived in the 20% of areas with the lowest levels. Other types of air pollution—lead, manganese, methylene chloride, and combined metal exposure—were associated with higher autism risk as well. Women who lived in the 20% of locations with the highest levels of these pollutants were about 50% more likely to have a child with autism than those who lived in the 20% of areas with the lowest concentrations. Most pollutants were associated with autism more strongly in boys than girls. However, since there were few girls with autism in the study, the authors said this finding should be examined further.

73. Energy Use to Grow by 56 Percent by 2040, Fueled by Developing Nations, EIA Reports

World energy consumption will grow by 56 percent between 2010 and 2040 while energy-related carbon dioxide emissions will rise by 46 percent in the same time period, the Energy Information Administration said in its latest international energy outlook released on July 25th. Most of the growth in both energy use and emissions will come from developing nations, or countries that are not members of the Organization for Economic Cooperation and Development. OECD members include the United States and other industrialized countries. Energy demand will be driven by strong economic growth in the developing world, EIA said. Half of the increase will come from China and India, EIA predicted. Some of the key conclusions included:

Total world energy consumption is expected to grow from 524 quadrillion British thermal units (Btu) to 820 quadrillion Btu.

World economic growth will average of 3.6 percent per year.

Renewable energy and nuclear power are the world's fastest-growing energy sources,

each increasing 2.5 percent per year.

Under current government policies, fossil fuels will continue to supply nearly 80 percent of world energy use through 2040.

Natural gas is the fastest growing fossil fuel, as global supplies of tight gas, shale gas,

and coalbed methane increase.

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The industrial sector continues to account for the largest share of delivered energy consumption and is projected to consume more than half of global delivered energy in 2040.

World oil prices are expected to rise, in 2011 dollars, from $106 per barrel in 2020 to $163

per barrel in 2040, due partly to rising demand but also unrest in the Middle East.

Global consumption of petroleum and other liquid fuels is expected to grow from 87 million barrels per day in 2010 to 97 million barrels daily in 2020 and 115 million barrels per day in 2040.

Based on current policies and regulations governing fossil fuel use, global energy-related

carbon dioxide emissions are projected to rise to 45 billion metric tons in 2040, a 46 percent increase from 31.2 billion metric tons in 2010.

Economic growth in developing nations, fueled by a continued reliance on fossil fuels, will

account for most of the increases in greenhouse gas emissions.

Non-OECD emissions exceeded OECD emissions by 38 percent in 2010 and are projected to exceed OECD emissions by 127 percent in 2040. Coal accounts for the largest share of emissions through 2040.

The projections, known as the reference case, do not include prospective laws or

regulations that might affect energy markets and fuel use.

74. World Bank Commits to Low-Carbon Energy, Restricts Coal Financing to ‘Rare' Cases

The World Bank's executive board has agreed to a new energy policy that confirms its commitment to low-carbon energy sources and restricts financing for coal-fired power plants to “rare circumstances.” The bank will only finance coal projects in countries with “no feasible alternatives” for meeting basic energy needs or a lack of financing, according to an energy sector directions paper discussed by the board on July 16th. The World Bank also pledged in the paper to scale up bank work in natural gas and hydropower to help meet its goal to expand access to reliable energy sources. Rachel Kyte, the World Bank's vice president for sustainable development, called the paper “a pragmatic set of directions for energy development.” She said in a statement July 16 that the paper positions the bank to achieve a goal set under its Sustainable Energy for All initiative to reach universal access to modern energy, double the global rate of energy efficiency improvement, and double the share of renewable energy in the global energy mix by 2030. The shift in policy on coal by the world's leading development finance institution is considered by analysts to be an important political win after member countries failed to reach a consensus on a previous effort to limit coal financing. The World Bank said in the paper that it will “scale up its engagement in natural gas” by helping countries address barriers to commercialization, encouraging private sector investment, providing risk mitigation instruments, and making investments through the International Finance Corp.

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The World Bank and other financiers had stepped away from large hydropower projects in the 1990s due to concern over environmental and social impacts. But leading multilateral banks have recently returned to hydropower lending. The World Bank said in the paper that it “has learned many lessons from past experience” and that it is “firmly committed to the responsible development of hydropower.” The impact of this energy strategy may not be seen immediately, since bilateral donors and the private sector will still continue to finance coal. Some analysts hope the new strategy could send a signal that coal is a risky investment and prompt countries to turn to alternative energy sources. Under World Bank President Jim Yong Kim - the first scientist to head the poverty-fighting institution - the bank has launched a more aggressive stance to spur action on climate change. Kim has said it is impossible to tackle poverty without dealing with the effects of a warmer world. Multilateral institutions like the World Bank have come under criticism for urging global action to cut emissions of carbon dioxide while simultaneously funding coal-fired power plants. Such plants are seen as one of the main causes of rising pollution from heat-trapping gases. The World Bank argues funding coal-fired power plants is sometimes necessary to bring energy to the world's poorest nations and to help them eradicate poverty. Analysts say coal is often the cheapest energy source in places like Kosovo, where the World Bank is mulling whether to support the country's plans for a coal-fired power plant. Emerging market countries like Brazil and China - which relies heavily on coal for its ballooning energy needs - have previously blocked proposals to limit coal financing at the bank. They argue the developing world should use whatever means it can to catch up to advanced economies, and that limiting coal to only the poorest would be discriminatory. The World Bank's strategy affirms "each country determines its own path for achieving its energy aspirations," likely a nod to the concerns of developing countries like China. The real test of the strategy may come next year, when the World Bank should decide whether to provide loan guarantees for the Kosovo power plant fired by coal. The World Bank last approved funding for a coal-fired power plant in 2010, in South Africa, despite lack of support from the United States, Netherlands and Britain due to environmental concerns. U.S. President Barack Obama in June said the United States would stop investing in coal projects overseas, part of a broad package of climate measures, and called on multilateral banks to do the same. The United States is the world's second-biggest emitting nation after China, and has sought to cut emissions of gas blamed for warming the planet.

75. Last Decade Sees ‘Unprecedented' Extremes, Highest Temperatures, U.N. Says The world experienced “unprecedented” extreme weather events between 2001 and 2010 as global temperatures reached their highest levels in the history of modern records, according to a U.N. report released on July 3rd. Extreme floods, droughts, and tropical cyclones were seen during the first decade of the 21st century, which was the warmest decade since meteorological records began around 1850, the United Nations' World Meteorological Organization said in the report. Key conclusions included:

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Floods were the most frequent extreme weather event from 2001 to 2010, according to the report. Among the areas hit especially hard was Pakistan, where 2,000 people died and 20 million were affected by flooding in 2010.

Droughts, however, affected more people than any other natural disaster because of their

large scale and long-lasting nature. Some of the highest-impact and longest droughts occurred in Australia, East Africa, and the Amazon Basin.

The period from 2001 to 2010 was the most active decade since 1855 for tropical cyclones

in the North Atlantic Basin, according to the U.S. National Oceanic and Atmospheric Administration's National Climatic Data Center, the report said. The period had an average of 15 named storms recorded per year, well above the 1981-to-2010 long-term average of 12 named storms per year.

The year 2005 marked the most active storm season ever recorded, with 27 total named

storms, including Hurricane Katrina.

The decade also included a more than 2,000 percent increase in the loss of life from heat waves, “particularly during the unprecedented extreme heat events that affected Europe in the summer of 2003 and the Russian Federation in the summer of 2010,” the report said.

At the same time, there were fewer deaths due to storms and floods compared with the 1990s, due in part to “better early warning systems and increased preparedness,” according to the report. Extreme Events and Climate Change Many of the extreme events “can be explained by the natural variability of the climate system,” but rising atmospheric concentrations of greenhouse gases are also affecting the climate, the report said. “While climate scientists believe that it is not yet possible to attribute individual extremes to climate change, they increasingly conclude that many recent events would have occurred in a different way—or would not have occurred at all—in the absence of climate change,” the report said. For example, the report said the likelihood of the 2003 heat wave in Europe was probably increased substantially by rising global temperatures. More complete and long-term data is needed to distinguish between “natural climate variability and human-induced climate change,” according to the report. “A decade is the minimum possible time frame for detecting temperature changes,” the report said. The study said that 44 percent of nations recorded the highest daily maximum temperature of the past half-century in the decade 2001-10 but only 11 percent reported a new low.

76. Diesel Fumes Pose High Risk to Diabetics Exposure to diesel fumes, for even few hours, is putting diabetics at a higher risk of developing respiratory and cardiovascular diseases, a new study has found.

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Nano Diesel Exhaust Particles (DEP) enter the blood stream of diabetic patients through the nasal/respiratory tract and cause systemic inflammation (swelling) of heart tissues and other vital organs, concludes the study, Health News reported. Exposure of between 24-48 hours can have an acute effect on the patients by causing a risk of developing cardiovascular and respiratory issues, while long-term chronic effects can lead

to the development of cancer cells in the human body. Though harmful environmental particles affect healthy humans as well, the effect is greater on diabetic patients, said Prof Abderrahim Nemmar who carried out the two-year study at the UAE University's Department of Physiology, College of Medicine and Health Sciences. The experiment was carried out on mice with Type 1 (genetically inherited) diabetes with the dose of particle exposure comparable to human exposure. According to the professor, similar international environmental studies have proved that pollutants can affect the heart and brain.

77. Heatwaves Increase Ozone Pollution Danger, Study Finds Ozone pollution rises during hot weather while plants’ ability to absorb ozone is reduced, according to Defra-funded research. With more ozone pollution in the air from reduced absorption from plants, the study by the Stockholm Environment Institute (SEI)’s York Centre estimates that this cost the lives of 460 people in the UK during the hot summer of 2006.14 The research found that ozone pollution from traffic fumes, industrial processes and other sources is at its worst during extreme heat but vegetation is also less effective at reducing pollution than it is at lower temperatures. According to lead author Lisa Emberson, this is because during heat waves when the ground is especially dry, plants become stressed and shut their stomata (small pores on their leaves) to conserve water. Dr. Emberson, University of York lecturer and SEI’s York Centre director, explained that this natural protective mechanism makes them more resilient to extreme heat and high ozone levels, but it also stops them from absorbing ozone and other pollutants. She said: “Vegetation can absorb as much as 20% of the global atmospheric ozone production, so the potential impact on air quality is substantial. What we set out to do in this study was to quantify that impact in terms of increased ozone levels and the toll on human life.” The research team, which also included scientists at King’s College London, focused on the summer of 2006, when a heat wave and drought occurred across the UK and much of Europe. They combined two models used for human health and ecosystem risk assessment to compare two scenarios, one with perfect ozone uptake by plants, and one with minimal ozone absorption. The difference between perfect and minimal uptake was equivalent to 16 days of ozone levels above the threshold for human safety across the entire UK – and as many as 20 days in the East Midlands and eastern UK.

14 ‘Scorched Earth: How will changes in the strength of the vegetation sink to ozone deposition affect human health and ecosystems?’ was published July 18 in the journal Atmospheric Chemistry and Physics. The research was financed by the UK Department for Environment, Food and Rural Affairs (Defra).

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Using these same scenarios, the team also estimated that 970 premature deaths due to ozone would have occurred under minimal plant ozone uptake conditions over the June to July period; of these 460 could have been avoided if plants had been absorbing ozone at full capacity. All estimated premature deaths are in addition to human health and mortality impacts from the heat itself. Ground-level ozone pollution can lead to lung inflammation decreased lung function, and an increase in asthma attacks. As a result, Dr. Emberson said, vulnerable people in both urban and rural areas with respiratory problems are advised against physical activity during episodes of high ozone pollution. The York lecturer said: “The more we know, the better we will be able to judge how successful our emission reduction efforts have been so far, and whether we need additional efforts – in the UK, across Europe and beyond, since we know that pollutants such as ozone and its precursors can carried around the globe.”

78. Lifecycle Emissions – Electric Vehicles Cleaner, Renault Study Electric vehicle in-use emissions are most definitely cleaner, but what happens when you consider lifecycle emissions? For example, aside from the power supply that is used to charge the lithium-

ion battery pack, what about the emissions generated manufacturing the battery pack itself? A recent study completed by Renault, the French automaker, compares the lifecycle emissions of three vehicles in the Renault Fluence lineup. The conventional vehicles, the diesel version, powered by a 1.5ℓ i4 engine, and the gasoline version, powered by a 1.6ℓ i4, were compared to the ZE electric vehicle, with a 22kWh lithium-ion battery pack and 70kW electric motor. A number of lifecycle emissions factors were

included in the Renault study, including links to energy sources, water and air pollution, and carbon dioxide emissions, among others, at four different stages in the lifecycle, from production to recycling. The lithium-ion battery pack and electric motor did push up emissions for a couple of factors, but overall, the ZE electric vehicle has lower lifecycle emissions than the diesel and gasoline conventional vehicles. [See Image for Comparison.]

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What’s the deciding factor? Lifecycle emissions pretty much boil down to what fuel you use. Diesel fuel ends up being cleaner than gasoline, mainly because diesel engines are inherently more efficient, but are still worse for the environment than electric vehicles. Some may point to dirty power plants pushing emissions higher when recharging, but a Stanford University study points out that even powered by coal, electric vehicles are cleaner. Since the 2006 Study, coal power has actually dropped, meaning electric vehicles are actually getting cleaner as the power grid gets cleaner.

79. Report Estimates That Seas May Rise 2.3 Meters Per Degree of Global Warming Sea levels could rise by 2.3 meters for each degree Celsius that global temperatures increase and they will remain high for centuries to come, according to a new study by a leading climate research institute. Anders Levermann said his study for the Potsdam Institute for Climate Impact Research was the first to examine evidence from climate history and combine it with computer simulations of contributing factors to long-term sea-level increases: thermal expansion of oceans, the melting of mountain glaciers and the melting of the Greenland and Antarctic ice sheets.

The Sheldon Glacier with Mount Barre in the background, is seen from Ryder Bay near Rothera Research Station, Adelaide Island, Antarctica, in this NASA/British Antarctic Survey Photo: NASA/British Antarctic Survey "We're confident that our estimate is robust because of the combination of physics and data that we used," Levermann told reporters. "We think we've set a benchmark for how

much sea levels will rise along with temperature increases." Sea levels rose by 17 cm last century and the rate has accelerated to more than 3 mm a year, according to the IPCC. A third of the current rise is from Antarctica and Greenland. Almost 200 governments have agreed to limit global warming to less than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times and plan to agree, by the end of 2015, a deal to curb emissions. Global average surface temperatures have risen by 0.8C (1.4F) since the Industrial Revolution and the IPCC has said temperatures are likely to be 0.4 to 1.0 degrees Celsius warmer from 2016-35 than in the two decades to 2005. "In the past there was some uncertainty and people haven't known by how much," Levermann said. "We're saying now, taking everything we know, that we've got a robust estimate of 2.3 meters (7 feet, 6.6 inches) of rising sea per degree (Celsius) of warming."

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Some scientific studies have projected sea level rise of up to 2 meters by 2100, a figure that would swamp large tracts of land from Bangladesh to Florida. David Vaughan, head of the Ice2sea project to narrow down uncertainties about how melting ice will swell the oceans, has said sea levels would rise by between 16.5 and 69 cm under a scenario of moderate global warming this century and that the biggest impact rising seas will have is that storms will be more destructive in the near future. "It's not about chasing people up the beach or the changing shape of coastlines," he said. "The big issue is how the storms will damage our coasts and how often they occur. That'll increase even with small levels of sea rise in coming decades." "Continuous sea-level rise is something we cannot avoid unless global temperatures go down again," Levermann said. "Our results indicate that major adaptation at our coastlines will be necessary. It's likely that some currently populated regions can't be protected in the long run."

80. Report Sees Signs of New Climate 'Normal' Apparent In Hot 2012 Last year was one of the 10 hottest on record, with sea levels at record highs, Arctic ice at historic lows and extreme weather in various corners of the globe signaling a "new normal," scientists said recently in the 2012 State of the Climate report. Meant to be a guide for policymakers, the report did not attribute the changes in climate to any one factor, but made note of continued increases in heat-trapping greenhouse gases including carbon dioxide, methane and nitrous oxide. "Our planet as a whole is becoming a warmer place," said Kathryn Sullivan, acting administrator of the U.S. National Oceanic and Atmospheric Administration. Sullivan said the “new normal” outlined in the report could help policymakers and decision makers plan for future climate variability. “Many of the planning models used in infrastructure planning, for example, rely on a set of assumptions that rely on the future being statistically a lot like the past,” Sullivan said. But the data released by NOAA, she said, “will lead one to question the soundness of those assumptions.” The report also “cautions us to look at a likely future where extremes are more frequent and more intense than what we have accounted for in the past,” she added. On a global scale, 2012 ranked as either the eighth or ninth warmest year on record, depending on the data set used, since recordkeeping began in the late 1800s according to the report. Some of the highest temperatures were recorded in eastern Canada, parts of Europe and Russia, and the United States. An earlier NOAA report said the United States experienced record warmth in 2012. However, in the decade leading up to 2012, global temperatures actually declined by .09 degree F (.05 degree C), according to Thomas Karl, director of NOAA's National Climatic Data Center. Karl said the 50-year trend indicates global temperatures have consistently increased about .27 degree F (.15 degree C) per decade. The recent decrease in temperatures has been noted by climate change skeptics who question the impact of human activities, such as the burning of fossil fuels that emit carbon dioxide, on climate. However, other changes detailed in the report paint a more complex picture:

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Sea levels reached a record high, after a sharp decrease in 2011 possibly linked to the Pacific Ocean phenomenon La Nina, which can have a cooling effect;

Arctic sea ice shrank to its smallest summer minimum since satellite records began 34

years ago, while Antarctic sea ice reached a record high;

More than 97 percent of the ice sheet covering Greenland melted at least a bit in the summer of 2012, four times greater than the 1981-2010 average;

Average sea surface temperatures rose, but not much, making 2012 among the 11th

warmest years on record;

Ocean heat was near record high levels in the upper half-mile of the water, and temperatures also increased in the deep ocean.

Unprecedented change was observed in the Arctic, where surface temperatures are increasing about two times faster than the rest of the world, according to the report. The Arctic “continues to be a region where we have some of the most compelling evidence of the fact that global temperatures are warming,” Jackie Richter-Menge, a research civil engineer at the U.S. Army Corps of Engineers, said during the teleconference. In 2012, sea ice shrank to its smallest “summer minimum” extent since satellite records began 34 years ago. Records also were set for permafrost temperatures, spring snow cover extent, and several other indicators. “While records from year to year tend to be eye-catching, what really deserves our attention is the linkages of change we are observing in the Arctic system,” Richter-Menge said, pointing to the connections between drastically shrinking sea ice cover, the warming of the ocean surface, and increasing tundra vegetation and ocean productivity. “The reason these linkages are important is because they reflect the persistence of changes in the Arctic region,” she said. “New records being reported from year to year are no longer anomalies or exceptions; really they've become the norm for us.” The year started off with a weak La Niña, which dissipated during the spring into neutral conditions, meaning “for the first time in several years” neither El Niño nor La Niña dominated regional weather and climate conditions. After sharp decreases in global sea levels in the first half of 2011 that were linked to La Niña, sea levels rebounded to reach record highs in 2012. Heat content in the upper 2,300 feet of the ocean remained near record high levels in 2012, while overall increases also were recorded in the deep ocean below. The year also saw an upward trend in greenhouse gas concentrations, including methane and nitrous oxide. Atmospheric carbon dioxide concentrations increased by 2.1 parts per million (ppm) in 2012, reaching a global average of 392.6 ppm for the year. The peer-reviewed report was compiled by 384 scientists from 52 countries based on global climate indicators, notable weather events, and other data collected by monitoring stations and instruments around the world. The report was published in the Bulletin of the American Meteorological Society. A separate report will be published in the bulletin in September explaining the causes behind some of the most extreme climate trends in 2012.

81. Experts Surer Of Manmade Global Warming But Local Predictions Elusive Climate scientists are surer than ever that human activity is causing global warming, according to leaked drafts of a major U.N. report, but they are finding it harder than expected to predict the

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impact in specific regions in coming decades. The uncertainty is frustrating for government planners: the report by the Intergovernmental Panel on Climate Change (IPCC) is the main guide for countries or regions weighing multi-billion-dollar shifts to renewable energy from fossil fuels, for coastal regions considering extra sea defenses or crop breeders developing heat-resistant strains. Drafts of the study by the U.N. panel of experts seen by the press, due to be published next month, say it is at least 95 percent likely that human activities - chiefly the burning of fossil fuels - are the main cause of warming since the 1950s. That is up from at least 90 percent in the last report in 2007, 66 percent in 2001, and just over 50 in 1995, steadily squeezing out the arguments by a small minority of scientists that natural variations in the climate might be to blame. "We have got quite a bit more certain that climate change ... is largely manmade," said Reto Knutti, a professor at the Swiss Federal Institute of Technology in Zurich. "We're less certain than many would hope about the local impacts." And gauging how warming would affect nature, from crops to fish stocks, was also proving hard since it goes far beyond physics. "You can't write an equation for a tree," he said. The new study will state with greater confidence than in 2007 that rising manmade greenhouse gas emissions have already meant more heat waves. But it is likely to play down some tentative findings from 2007, such as that human activities have contributed to more droughts. Almost 200 governments have agreed to try to limit global warming to below 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times, seen as a threshold for dangerous changes including more droughts, extinctions, floods and rising seas that could swamp coastal regions and entire island nations. The report will flag a high risk that global temperatures will increase this century by more than that level, and will say that evidence of rising sea levels is now "unequivocal". For all that, scientists say it is proving harder to pinpoint local impacts in coming decades in a way that would help planners. Drew Shindell, a NASA climate scientist, said the relative lack of progress in regional predictions was the main disappointment of climate science since 2007. "I talk to people in regional power planning. They ask: 'What's the temperature going to be in this region in the next 20-30 years, because that's where our power grid is?'" he said. "We can't really tell. It's a shame," said Shindell. Like the other scientists interviewed, he was speaking about climate science in general since the last IPCC report, not about the details of the latest drafts. The panel will try to explain why global temperatures, while still increasing, have risen more slowly since about 1998 even though greenhouse gas concentrations have hit repeated record highs in that time, led by industrial emissions by China and other emerging nations. An IPCC draft says there is "medium confidence" that the slowing of the rise is "due in roughly equal measure" to natural variations in the weather and to other factors affecting energy reaching the Earth's surface. Scientists believe causes could include: greater-than-expected quantities of ash from volcanoes, which dims sunlight; a decline in heat from the sun during a current 11-year solar cycle; more heat being absorbed by the deep oceans; or the possibility that the climate may be less sensitive than expected to a build-up of carbon dioxide. The main scenarios in the draft, using more complex computer models than in 2007 and taking account of more factors, show that temperatures could rise anywhere from a fraction of 1 degree Celsius (1.8 Fahrenheit) to almost 5C (9F) this century, a wider range at both ends than in 2007. The low end, however, is because the IPCC has added what diplomats say is an improbable

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scenario for radical government action - not considered in 2007 - that would require cuts in global greenhouse gases to zero by about 2070. Temperatures have already risen by 0.8C (1.4F) since the Industrial Revolution in the 19th century. Experts say that the big advance in the report, due for a final edit by governments and scientists in Stockholm from September 23-26, is simply greater confidence about the science of global warming, rather than revolutionary new findings. "Overall our understanding has strengthened," said Michael Oppenheimer, a professor at Princeton University, pointing to areas including sea level rise. An IPCC draft projects seas will rise by between 29 and 82 cm (11.4 to 32.3 inches) by the late 21st century - above the estimates of 18 to 59 cm in the last report, which did not fully account for changes in Antarctica and Greenland. The report slightly tones down past tentative findings that more intense tropical cyclone are linked to human activities. Warmer air can contain more moisture, however, making downpours more likely in future. "There is widespread agreement among hurricane scientists that rainfall associated with hurricanes will increase noticeably with global warming," said Kerry Emanuel, of the Massachusetts Institute of Technology. "But measuring rainfall is very tricky," he said.

82. Benefits of Cutting Soot and Methane Debated A drive to reduce soot and other heat-trapping air pollutants worldwide is less promising than hoped as a new front in the fight against climate change, according to a new study. It argues that extra measures to reduce such pollutants, led by soot and methane, would cut temperature rises by only 0.16 degree Celsius (0.29 Fahrenheit) by 2050, far less than some estimates that the benefits could be 0.5C (0.9F). "Reductions of methane and black carbon (soot) would likely have only a modest impact on near-term global climate warming," the authors at the U.S. Department of Energy's Pacific Northwest National Laboratory (PNNL) wrote. But the conclusion is based on an assumption that developing nations would drop high-polluting technologies such as wood-fired stoves anyway as their economies grew, so that emissions would fall regardless of any separate new policies. In other words, the study assumes that many of the measures to reduce the short lived climate forcers would already be adopted because as developing nations get wealthier they will inevitably address these measures because of the air pollution benefits so that cleaning up the remainder would have only modest climate benefits. However, a scientific adviser to the Climate and Clean Air Coalition - founded by the several governments and the U.N. Environment Program (UNEP) in February 2012 - said more wealth did not necessarily mean cleaner air. "It took really aggressive efforts by the United States and Europe to clean up air pollution" in past decades, Drew Shindell, who is also a climate scientist at NASA, told reporters. "It doesn't happen automatically." He said the efforts to reduce soot, methane and other gases that break down quickly in the air could substantially complement a wider drive to slow global warming, which is blamed mainly on carbon dioxide, a greenhouse gas that can linger in the atmosphere for centuries. Soot comes from sources such as wood-burning stoves, diesel engines, forest fires and open burning of crop waste. Methane comes naturally from decomposition of plant and animal matter, and from man-made sources including the farming of ruminants such as cattle and sheep, and coal or natural gas extraction.

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UNEP says that cuts in short-lived pollutants could slow global warming by 0.5 degree Celsius and have the potential to prevent more than 2 million premature deaths a year and avoid the annual loss of more than 30 million tons of crops. Steven Smith, lead author of the new study, told the press: "Our results don't change previous findings that soot and methane emission reductions would have beneficial effects for health and agriculture." PNNL used the DOE Global Change Assessment Model (GCAM) to evaluate the climate impact of reducing soot and methane emissions. GCAM is a dynamic model that takes into account ongoing future changes in technology, society and the economy, including energy and land use. GCAM assumes – in the baseline case – that all measures with negative life cycle cost will be taken by rational decision makers. The net effect is to shrink the relative effectiveness of “extra” short lived forcer mitigation and the associated climate effects because GCAM assumes that ~50% of SLF mitigation will happen naturally under Business as Usual (BAU). PNNL also assumes relatively aggressive air pollution controls (e.g., low sulfur fuel and diesel filters worldwide) in the base case. As Shindell points out, the question PNNL is really asking is: what are the benefits of additional efforts to remove methane and BC-related emissions after many of the UNEP measures have already happened? Not surprisingly, the answer is not too large. In contrast, the UNEP work deliberately looked at the effects of full implementation of the measures relative to only what's 'on the books' already to quantify the benefits of additional actions relative to current policy. In addition Shindell points out, the UNEP work was meant to quantify the maximum benefits achievable, hence the 100% implementation, and not to say that was a likely or even plausible scenario (an aspirational one perhaps). And it only went out to 2030 for emissions projections, but for climate impacts (and only for climate) emphasized values in 2050 owing to the lag time in the response to the emissions changes through 2030. In addition to the different socio-economic assumptions, there is a real difference in the physical science as well. PNNL uses an overly simplistic model of the atmosphere and climate. While UNEP used full three-dimensional composition-climate models and divided up the world into ~130,000 boxes, the PNNL study used 4 boxes. It has no mountains, no snow, and no transport in the atmosphere, no chemistry, no rain, no geography and no seasons. Thus it is quite astonishing that the PNNL study claims that differences from the UNEP work can be attributed to their using 'more realistic' models. That claim seems to be due to a very basic error on their part in which they say that the UNEP work assumed all climate change took place by 2050 and then stopped, when it should have taken place more slowly. All it takes is a quick look at the many graphs of temperature vs. time in the UNEP report to see that their claim is incorrect and that it did in fact have the correct temporal evolution of climate. Thus they compound their erroneous claim with mistaken analysis, and don't realize that their model is just too simple to capture what they're trying to look at.

83. EIA: World Petroleum Product Consumption Sets Record High In 2012 The world’s consumption of petroleum products reached a record high of 88.9 million b/d in 2012, as declining consumption in North America and Europe was more than outpaced by growth in Asia and other regions, according to a recent study by the US Energy Information Administration. The study examines regional trends in petroleum consumption between 1980 and 2012.

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Asia’s consumption increased by 4.4 million b/d between 2008 and 2012. In 2009, Asia overtook North America as the world’s largest petroleum-consuming region, fueled by demand increases from China and India. According to EIA’s projections, China is expected to replace the US as the world’s largest net oil importer this fall. US consumption was reduced in 2011 and 2012 as a result of higher oil prices and increased fuel efficiency of light-duty vehicles. Motor gasoline consumption, which makes up almost half of total US liquids fuel consumption, fell by 290,000 b/d between 2010 and 2012. Petroleum use in Europe has declined consecutively since 2006, due to weak economic performance and government policies in favor of energy efficiency. Europe’s petroleum use declined of 780,000 b/d in 2009 and 570,000 b/d in 2012.

84. Automotive Engineers See Stronger Regulations on the Horizon With automotive regulations governing fuel economy and CO2 emissions being discussed in Europe and the United States, nearly half of automotive engineers predict those regulations will strengthen, according to a WardsAuto and DuPont survey conducted in late July. Only 8 percent predict regulations will relax, primarily due to economic and cost issues, and one-fourth expect no change, the results show. The survey results also show the value for lightweighting vehicles to help meet targets is increasing, and that every system in the vehicle is a candidate for reduced mass. Fuel and emission standards throughout the world are driving significant changes in vehicle design, said DuPont Performance Polymers President Diane H. Gulyas. There are multiple solutions simultaneously getting into the market and the industry must continue to work in harmony to develop low emission, fuel-efficient vehicles that consumers want to drive. Now in its third year, the annual survey with WardsAuto was conducted as the European Union delayed a vote to adopt stringent 2020 emission regulations. This uncertainty, coupled with the mid-term evaluation process built into the 2017-2025 U.S. regulations, stimulated a survey asking subscribers to weigh in on the outcome and whether their companies are reacting to uncertainties. More than 1,300 subscribers to leading industry publication WardsAuto responded to the survey. Forty three percent say there are no changes, 36 percent say there are some or many changes in the development pipeline.

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While last year’s respondents gave aluminum a slight edge over plastics and composites as the material that can best help them meet regulations, respondents today are looking at all materials in the portfolio. In 2011 surveys with the Society of Automotive Engineers and WardsAuto, the automotive engineering community revealed that materials are critical to a products success, yet most said they were not confident that today’s materials portfolio would help them meet CAFE regulations. We’ve seen a variety of materials-based solutions introduced in the past couple years, said Mike Day, DuPont Automotive Performance Polymers development director in North America. And development activity with the automakers is intensifying, especially related to new composite and multi-material solutions that deliver the

strength and stiffness needed for performance and safety. Lightweighting is core to meeting new standards and one that is growing in value, according to more than 60 percent of respondents. Further, when asked which systems are the most likely targets all ranked relatively equally. The results reflect that every system, every component throughout the vehicle is a candidate for weight savings, said Day. This is a great time to incorporate plastics early in the design stage since there are many more opportunities to integrate functions for significant mass and cost savings. In addition to lightweighting, the industry continues to optimize the internal-combustion engine, develop hybrid and electric vehicles and adopt alternative fuels. For its part, DuPont offers advanced materials to help reduce mass and improve efficiency; battery chemistries and materials for more efficient electric-powered vehicles; and has collaborated to develop low global warming potential refrigerants for vehicles and biofuels manufactured from non-food based cellulosic resources. The WardsAuto survey was sponsored by DuPont and conducted by Paramount Research, Coralville, Iowa. Forty-three percent of the 1,300 respondents indicate they work for system, component or parts manufacturers; 24 percent work for an automaker; and the balance work for engine or engine-service companies. Nearly half the respondents say they work in engineering, R&D or in quality/reliability. Sixteen percent work in management and the remainder represent manufacturing, purchasing or other field.

85. Main Conclusions from the Saltsjöbaden V Workshop 24-26 June 2013 On 24-26 June 2013 more than 130 leading experts and scientists, policy makers and negotiators, international organizations and industry met at an international workshop in Gothenburg, Sweden in order to discuss and outline future directions in air pollution science and policy. The workshop was organized by the Swedish Environmental Protection Agency and the IVL Swedish Environmental Research Institute, in collaboration with international organizations such as the

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Convention on Long-range Transboundary Air Pollution (CLRTAP), the European Commission, Global Atmospheric Pollution Forum and the Nordic Council of Ministers. The workshop set the scene for future international and global air pollution policies and discussed possibilities to achieve improved air quality for the protection of health, ecosystems and materials and at the same time ensure benefits for climate change, biodiversity and other related policy areas. The workshop provides input to international policy processes with respect to both air pollution and climate change. The discussions at the workshop built on a number of on-going and recently finalized international activities such as the CLRTAP Long Term Strategy, the on-going review of the EU Thematic Strategy on Air Pollution, and several initiatives in relation to Short Lived Climate Pollutants (SLCP). Topics of particular interest were combined air pollution and climate change policies, actions for the control of emissions of reactive nitrogen, health impacts of air pollution, future effects-based international air pollution policies and the roadmap for going from regional to global air pollution policies. Future work on POPs and heavy metals under CLRTAP and other conventions was also discussed. The key conclusions and recommendations are presented below. These are the outcome of discussions during the meeting in seven topical workshops followed by a general discussion and agreement in plenum. Each recommendation is followed by a “tag” suggesting the most relevant organization(s) for the recommendation. The key to the abbreviations is given after the recommendations. General conclusions and recommendations 1. Future direction of policy and science

Air quality has improved during the past 30 years, but there is still work to be done to protect human health, ecosystems, crops, cultural heritage and to contribute to short-term mitigation of climate change. The effect-based approach – that has underpinned the Convention on Long-Range Transboundary Air Pollution to date – should remain the basis for further steps. (EB)

Further emission reductions, especially from diesel cars, non-road mobile machinery and domestic coal, wood combustion and agriculture are needed to reduce long-term population exposure. (EB, European Commission)

It is crucial that the latest proposed European mobile standards (Euro-6 and VI) will work as planned under real-world driving conditions. A process related to the new driving cycle and associated testing is underway in Europe. Member States will ultimately decide on the real world issue, based on a proposal from the Commission, but should ensure that their views are properly represented throughout the consultation process, in which views from industry currently tend to dominate. (EU Member States, European Commission, EB)

The revised National Emissions Ceilings (NEC) Directive (proposal scheduled for adoption by the European Commission in 2013) could be used as a first step towards addressing emissions of the ozone precursors methane and carbon monoxide for both air quality and health purposes, at the same time benefitting near term climate. This can be followed by similar actions on a broader international scale. (European Commission, EB, Arctic Council, CCAC)

Emissions data on Black Carbon and knowledge of its impacts on health and climate should be further improved. This requires specific action by the Task Forces on Emission Inventories and Projections and Hemispheric Transport of Air Pollution as well as the Task Force on Health. (EMEP, TFEIP, TFHTAP, TFH, scientific community)

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In order to move towards improved protection of ecosystems from air pollution (in particular eutrophication and ozone impacts), development of indicators complementing critical loads and critical limits could be investigated. This includes air quality limit value for ammonia and regional emission ceilings for nitrogen and indicators relating nitrogen concentrations and deposition or ozone fluxes to impacts on ecosystems (such as “no net loss of biodiversity”). Such indicators are required for impacts assessments carried out in complement to analyses provided by the GAINS model. (EB, TFRN, WGE)

A number of paths may be considered and further explored by the research community in order to assess benefits of air pollution reductions. These include the evaluation of ecosystems improvements and the benefits these entail for human health and the provision of ecosystems services. (WGE, EMEP, TFH, TFIAM, ICP M&M and other ICPs)

The contribution to the reduction in air pollution and greenhouse gas emissions of structural changes in transport, energy and food supply as well as behavioral change will become increasingly important in the future. Energy efficiency measures, introducing renewables and switching from coal to gas are examples of structural changes. Further work is needed to explore ways to encourage sustainable and healthy lifestyles. (WGSR, TFIAM, TFRN)

The integrated scientific approach including emissions, monitoring, modelling, integrated assessments, and policy scenario evaluations is essential and specific to the CLRTAP. It provides valuable support to further policy development and implementation, in cooperation with other conventions and programs. Improved emission inventories are needed in order to improve the scientific basis for policy development. Increased cooperation with EECCA countries on science and implementation is of high priority. (EB, EMEP, WGE, TFEIP, and other TFs/ICPs as appropriate)

For both HM and POP, human and ecosystem exposures occur via a number of pathways and atmospheric emissions and long range transport contribute in varying degrees to the exposure either directly or indirectly (e.g. via uptake in food chains in remote areas). New scientific evidence of human health effects at low dose levels of HM and POP warrants further policy action to reduce atmospheric emissions and long-range transport. The unique characteristics of CLRTAP among the various international conventions and programs are the strong links between science and policy as well as the integrated scientific approach. CLRTAP should develop cooperation with other international conventions, policies and programs focused on regulation, monitoring and assessment. In this context, CLRTAP can provide an infrastructure and a mechanism by which parties can meet many of their obligations to other international agreements (EB, WGSR, EMEP, and WGE)

2. Communication Communications from the International Air Pollution community must be responsive to the broad mix of outputs generated and the diversity in the assimilative capacities of the various recipients. Communication may relate to the status of air quality in a given area, international emission trends, local policy options and the outcomes of policy interventions. The respective audiences and relevant messages are varied and CLRTAP (including its subsidiary bodies) could together with other international bodies play a more pivotal and effective role in the design and delivery of messages from the wider international air community to all stakeholders within and beyond present networks.

The meeting recommends the EB and the CLRTAP secretariat to consider its communication strategy, redesign its webpage and establish a position for a

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communications officer to manage internal communications and support external mainstream messaging efforts. (EB, CLRTAP secretariat)

An effective communication strategy requires coordination of communication between Convention bodies, with other international conventions as well as with other target groups outside the Convention, such as policy makers and the general public. This may require information to be tailored for the target groups and presented via different media. (EB)

In regards to conveying messages to the public and politicians internationally, it is recommended to involve professional support to ensure that there is sustained mainstream media attention for air related issues through a variety of media (print, online, radio, television) and on all scales (e.g. local, national). This regular messaging can change the public perception of air quality, make adverse air quality impacts a reputational risk for industry, and so change the political context for regulation. (EB, European Commission, EEA, national administrations etc.)

The achievements and potentials of CLRTAP and the role played by an integrated scientific approach should be actively promoted. The synthesized messages of these scientific efforts must be made easily understood for the public. (EB and CLRTAP subsidiary bodies)

3. Outreach to the global scale Concerted international action is crucial for the reduction of population exposure to long-range air pollution such as ozone and fine particles and for reducing damage to ecosystems. Due to the synergies between air pollution and climate change, air pollution control could effectively contribute to the mitigation of short-term and local warming.

CLRTAP should take steps to open the Convention to parties outside the UN ECE, in recognition of the general character of the obligations of the Convention and to facilitate building upon the work of TF HTAP. (EB and TFHTAP)

CLRTAP should initiate discussions with other regional networks and relevant bodies on the appropriate elements of a Global Framework for Cooperation of Air Pollution. The intention would not be to have a global negotiating organization but rather an agreed process for information sharing, policy coordination and to enhance capacity for managing transboundary and local air pollution issues. (EB, UNEP, GAP Forum)

CLRTAP should invite the International Law Commission (ILC), established by the United Nations, to continue exploring the scope for a ‘Law of the Atmosphere’, which would facilitate integrated action on climate change and tropospheric air pollution. (EB, UNEP, UN ILC)

Scientific cooperation with other conventions and programs working on different aspects of air pollution, e.g. UNEP, the Arctic Council, AMAP, the Stockholm Convention and the Minamata Convention should be developed and co-funding should be sought where appropriate. (EB, EMEP, WGE, UNEP, Arctic Council, AMAP, Stockholm Convention, Minamata Convention, CCAC, European Commission)

An ad-hoc group with representatives for WGE, EMEP, and WGSR should be formed to address potentials and actions to enhance cooperation and synergies on POPs and HM with other conventions, programs and policies, and also to evaluate possibilities for funding of these activities (EB).

Climate change policy makers and national IPCC representatives from countries interested in the linkages between air pollution and climate change should propose the compilation of a special report on air pollution and climate change that would engage the IPCC, CCAC, and the air pollution community both globally and locally, including subsidiary bodies of CLRTAP. (National governments, IPCC, CCAC, EB, EMEP, WGE)

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4. Outreach to the local scale The meeting identified the importance of emission control measures on the local scale both with respect to urban and agricultural areas and encourages:

Relevant bodies under the Convention to involve experts from local and city administrations, NGOs and experts from industry or agriculture in their scientific network. (EMEP, WGE, TFIAM, TFH, TFRN)

The Working Group on Strategies and Review, the European Commission and the parties to further develop standards for large animal production units and for products (Euro standards, Ecodesign, Non Road Mobile Machinery and machinery for manure application to agricultural land), that would facilitate meeting air quality limit values locally and halting the loss of biodiversity in designated nature protection areas, i.e. Natura 2000 areas. (WGSR, European Commission, national governments)

Local and national governments to reduce exposure of urban population to air pollution with additional incentives to reduce emissions from local combustion sources. Fuel switching, retrofitting and/or early replacement of vehicles and small-scale combustion installations, as well as incentives to reduce car mobility and energy use would have priority. (European Commission, national governments, local administrations, WGSR)

Local and national governments to develop reduction plans to bring nitrogen deposition, and ammonia and nitrogen oxides concentrations over designated nature protection areas, such as Natura2000 sites, down towards critical loads and levels. (Local administrations, national governments, European Commission)

5. Short and long term ambitions for the European Union The meeting advises the European Commission in its present work on the Thematic Strategy on Air Pollution and related revisions of directives to consider:

Including in the new NEC Directive a regular interim review of progress towards the emission targets (of the NEC Directive and the emission obligations under the revised Gothenburg Protocol) and require a scheduled national assessment process with Member States reporting on projected emissions and compliance progress. This may trigger additional action or infringement if a country fails to respond or fails to take action on persistent poor performance. (European Commission)

Making optimal use of the available technical abatement potential in 2025 and move towards long term ‘no significant impacts on health and ecosystems’ by 2030 at which time it should be possible to incorporate the potential co-benefits from the climate and energy package and the Common Agricultural Policy revision. (European Commission)

Stimulating technological innovations needed for cleaner air. (European Commission) 6. Capacity-building and information infrastructure International air pollution policies have, since the trans-boundary transport of pollutants was recognized, been based on scientific evidence and long-term monitoring and these activities are still of sustained and significant importance for the policy work. The meeting advises:

Parties to sustain the monitoring programs under EMEP and WGE with a viable number of monitoring sites. (Parties to the CLRTAP, EMEP, WGE)

The European Commission to require ecosystem monitoring under the NEC Directive, which should build on existing monitoring systems. (European Commission)

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Parties to maintain the scientific capacity within the CLRTAP and enable national experts and scientists to actively participate in its scientific network as well as the financing of research and monitoring activities. This should also include the awareness of air pollution and the improvements of technical capacities in the EECCA countries. (Parties to the CLRTAP)

Scientific bodies and national and European policy makers to promote the prioritization of topics relevant for CLRTAP in available (co-)funding programs (e.g. LIFE, Horizon 2020, Structural Funds). (European Commission, national governments and agencies)

CLRTAP and its subsidiary bodies and parties to engage with other international and national organizations through the Group on Earth Observations (GEO) Air Quality Community of Practice to take advantage of the progress in information technology to improve information access and exchange within the Convention and the broader global air quality community. (EB, EMEP, WGE, TFHTAP)

Abbreviations AMAP - Arctic Monitoring and Assessment Program, a working group under the Arctic Council CCAC - The Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants CLRTAP - Convention on Long-range Transboundary Air Pollution EEA - European Environment Agency EB - Executive Body of the Convention on Long-range Transboundary Air Pollution EECCA - Eastern Europe, Caucasus and Central Asia EMEP - Steering Body of the European Monitoring and Evaluation Program under CLRTAP GAP Forum HM - Global Atmospheric Pollution Forum Heavy metals Horizon 2020 - The EU Framework Program for Research and Innovation 2014-2020 ICPs - International Cooperative Programs under WGE ICP M&M - The International Cooperative Program on Modelling and Mapping of Critical Levels and Loads and Air Pollution Effects, Risks and Trends ILC - The International Law Commission, established by the UN IPCC - Intergovernmental Panel on Climate Change LIFE - The EU’s financial instrument supporting environmental and nature conservation projects Natura 2000 – POP An EU-wide network of nature protection areas established under the EU Habitats Directive Persistent Organic Pollutants TFEIP - Task Force on Emission Inventories and Projections under EMEP TFH - Task Force on Health under WGE TFHTAP - Task Force on Hemispheric Transport of Air Pollution under EMEP TFIAM - Task Force on Integrated Assessment Modelling under EMEP TFRN - Task Force on Reactive Nitrogen under WGSR WGE - Working Group on Effects under CLRTAP WGSR - Working Group on Strategies and Review under CLRTAP WHO - World Health Organization