Magazine "Energie Libere"

ÉNERGIE L IBRE

ISSUE #2, OCTOBER 2012

THE GREEN ECONOMY ARISES

FROM YOURSELF

PHYSICAL ECONOMY OF S. PODOLYNSKY.

IDEAS ABOUT ENERGY BUDGET OF THE

TERRITORY

GLOBAL WARMING: JUDGMENT BY

OURSELVES

ENERGY PROSPECTS FOR STATEWIDE

AUTOMATED MANAGEMENT SYSTEM.

EVERYTHING NEW

IS WELL-FORGOTTEN OLD

WORLD`S LARGEST CARBON FUNDS: CREATION,

PERSPECTIVES ON FUNCTIONING

AND DEVELOPMENT

n its path to global prosperity the global economy has ignored environmental

issues for too long. As a result nowadays the world faces a lot of problems, including

ecological catastrophes, environmental pollution, climate change, food and energy crisis.

Having assessed the risks related to such unconcern we should try to correct the current

situation by directing all means of the global economy.

In order to promote sustainable development of a planet, our magazine "Énergie Libre"

is focused on means and initiatives which try to achieve this goal, namely international

agreements on protection of environment, environmental economy, carbon market,

alternative energy and energy efficient technologies, etc.

From the editors of

“ÉNERGIE LIBRE”

O

ÉNERGIE LIBRE

BFSE.COM.UA

THE CONTENT OF THE ISSUE

POLICY

Global warning: judgment by ourselves……………………………………….…....4

ECONOMICS

Physical economy of S.Podolynsky. Ideas about energy budget of the

territory……………………………………………………………………………...6

FINANCE

World`s largest Carbon Funds: creation, perspectives on functioning

and development……...………………………………………...………………….11

FEUILLETON

The Green Economy arises from your self……………………………...……… ...17

TECHNOLOGIES

Energy prospects for Statewide Automated Management System.

Everything New is Well-Forgotten Old…………….………………..…………….20

BFSE.COM.UA

ÉNERGIE LIBRE

GLOBAL WARMING: JUDGMENTS BY OURSELVES.

o you know that according to sci-

entists’ predictions the population

of polar bears will shrink by two

thirds till 2050? In perspective polar bears

will be for our posterity what dinosaurs for

us are. Global warming is to blame for this,

as for 90% of problems of planetary scale.

All of us know theoretically the nature and

consequences of this phenomenon, but few

people realize its effects in full, and mainly

how soon we will feel real changes. So, we

continue to live our usual life passing the

buck to anyone – politicians, scientists, big

corporations, non-governmental organiza-

tions. The year 2010 was the hottest of the

last 130 years, and 12 of 15 last years were

the warmest by the average annual temper-

ature. According to some scientists’ re-

searches, this tendency will lead to the rise

of sea level by 1, 2 meters till the end of the

century. The problem is, this process is ir-

reversible. Even if humankind stops carbon

emission at all till 2100, New-York, Hong

Kong will be wiped off the map to the end

of the millennium, and small island coun-

tries like Grenada – even earlier. That’s

why Small Island State Union appeal to the

world community with the request to limit

global average temperature increase to no

more than 1,5°C above pre-industrial level

while it has already been exceeded by 0,8

degree. Otherwise it could be evaluated as

a genocide against island countries. One

more reason to sound the alarm is the

threat of fatal diseases spread - first of all

malaria. Rainfalls acceleration, tempera-

ture background and humidity rising create

favorable conditions for spread of malaria

agents and for expansion of its carriers –

mosquitoes. Annually 300-500 millions of

people have malaria, half a million of which

dies. Global warming will double these fig-

ures. Fever, cholera, meningitis, plague and

sleeping sickness will be widespread too.

In addition to that nutrition problems

D “Besides, two degrees warming worldwide means

3.5 °С warming in Africa.... “

There is little doubt that the burning of fossil fuels and deforestation have altered the Earth’s climate, some uncertainty remains about whether and when such changes will become unmanageable.

ÉNERGIE LIBRE POLICY

BFSE.COM.UA 4

will be accentuated. American scientists

assert, that climate changes will lead to

significant crop reduction in tropics and

subtropics turning formerly fertile territo-

ries into deserts. That’s why half of the

earth population will starve in the next

century. This situation will be aggravated

by water shortage and its poor quality.

Mass nation migration can be the main

consequence of it.

With regard to the flora and fauna

changes, 1,5 – 2,5°С rise of average annu-

al temperature will place 20-30% of exist-

ing animal and plant species in jeopardy,

where fishes and polar bears mentioned

before are at the head of the list

(according to Intergovernmental Panel on

Climate Change).

In the year 2009 London newspaper

«The Guardian» initiated publication of

article with appeal for solving the climate

change problem in 45 editions worldwide.

At that time in Copenhagen was taking

place UNO conference dedicated to world

climate changes.

German language business newspaper

«Handelsblatt» called this summit “climate

disaster in political dimension”. Despite

civil society expected adoption of agree-

ment that will reduce carbon emission

firmly, only declarative document was the

result of the summit. It was admitted that

2°С rise of average annual temperature

may have disastrous consequences ,but

clear mechanism of combating actions

wasn’t developed. At the same time appli-

cation of small island country’s Tuvalu rep-

resentative for correction of the summit

aims was rejected (he requested the aim

of the summit was to prevent 1,5°С rise of

average annual temperature instead of

stated 2°С). This 0,5°С may be crucial for

small island countries in future: they will

be inundated by rising seas. Besides, two

degrees warming worldwide means 3.5 °

С warming in Africa, that will lead to

droughts, famines, and millions of climate

refugees. However, one of the biggest pol-

luters – USA – recognized the necessity of

reducing 4% global warming pollution be-

low 1990 levels by 2020, while for achiev-

ing no more than 2 degrees warming re-

ductions must be at least ten times larger:

40% below 1990 levels by 2020. Naomi

Klein in her article “Better to have no deal

at Copenhagen than one that spells catas-

trophe” wrote USA “…have carved up the

last remaining unowned resource and allo-

cated it to the wealthy." Such a situation

was considered by world community as

“climate colonialism”. Concrete decisions

has been shifted to the Cancun conference

held in December 2010.

“Annually 300-500 millions of people have malaria, half a

million of which dies.”

POLICY ÉNERGIE LIBRE

5

Sourse:http://adoptanegotiator.org/2012/10/25/catastrophic-but-not

Logotip Cop15 - Copenhagen

Logotip Cop18 - Doha

Participants reached a settlement about

some aspects of the treaty that will replace

Kyoto Protocol in 2012. There have been

developed a number of decisions about for-

est protection and international technology

exchange. The final adoption of post- Kyoto

treaty will take place this year in Doha. So,

the effectiveness of the UNO in handling the

matter is being brought into question.

As for Ukraine, it has doubtful reputation

concerning participation in such a confer-

ences. On the one hand our country was

represented on both UNO conferences dedi-

cated to the climate changes and took part

indecision-making process. On the other

hand, Victor Yushchenko neglected the Co-

penhagen conference. That’s why activists in

city-center distributed leaflets with his photo

and inscription “Climate shame”on them. At

the Cancun Сonference Ukraine was award-

ed with anti prize “Dinosaur of the day” for

blocking the negotiation process. The reason

was unconstructive position in the negotia-

tions and refusal to disclose the information

about the use of money received from car-

bon emission reduction.

Big business can’t stay aside too because

it’s exactly big business who is being ac-

cused of intensive growth of harmful emis-

sion. Its superprofit is supposed to be made

at society’s cost .

That’s why term “social corporate re-

sponsibility” is used in every big business’s

annual report. But such an activity can be

considered not only in terms of realizing

one’s responsibility, but in terms of creating

one more competitive advantage and trib-

ute to company’s reputation saving. That’s

why it’s sometimes difficult for average citi-

zen to distinguish eyewash from real effec-

tive actions. .

Without any doubts mankind should

unite - it is the only way to postpone the

moment of disaster. But we should start

with ourselves. And the point is not only a

carbon emission reduction, but rational use

of nature at all. In my opinion our problem

lies in consumer world-view, in change of

value priorities - from spiritual to material

ones. Our ancestors was notable for respect-

ful attitude to the nature, they have made

the cult of it. What happened with our gen-

eration then? What caused so abrupt men-

tality change? Globalization, acculturation,

national self- identification crises? Should

we blame USSR, where nature was sacri-

ficed to the raising of the rate of production?

In any case the most important thing is

not to be indifferent. Simple things done by

everyone can yield significant results. Re-

ducing the amount of driving , preferring

bicycle, taking paper for recycling and using

the recycled paper (by the way, it doesn’t

differ in terms of price), rational use of elec-

tricity and running water, throwing rubbish

only in certain places – you don’t have to

change the way of life you used to do all of

this things. The most important thing: we

mustn’t lose heart – we still can gain time.

Myroslava Padalytsa

[email protected]

“Even if humankind stops carbon emission at all till 2100, New-

York, Hong Kong will be wiped off the map to the end of the

millennium, and small island countries like Grenada – even

earlier. “

ÉNERGIE LIBRE POLICY

Sourse http://www.environmentalcommunicator.com/151/

evidence-of-climate-change-global-warming.html

President Barack Obama speaks at the climate summit in

BFSE.COM.UA 6

PHYSICAL ECONOMY OF S.PODOLYNSKY.

t a time when the linear model of ag-

gressive economic growth seen in the

coordinates of "human - society",

"human - environment" we received a num-

ber of natural disasters, shortage of natural

resources and the devaluation of "financial

unit" as a market regulator.

Scientific research carried out by S.

Podolynsky on the edge of natural and so-

cial sciences. He was the first who com-

bined the physical processes with economi-

cal, methodologically demonstrating the

need of the synthesis of natural and cost

parameters store solar energy in the pro-

cess of economic activity. So today we can

apply a macroeconomic approach, which

would be focused on adequate outcomes of

natural systems , which consider the com-

ponents of the system: "human" - "society" -

"ecology" (Human? Economy? Ecology? ) in

reciprocal communication. Only in such

coordinates can find an optimal solution,

and for the further development of humani-

ty - to ensure sustainable development

(figure 1).

Difficulty links between different compo-

nents of this system does not permit today

to build such a conceptual model of it that

would adequately describe the interaction

between its components and the environ-

ment. Such model should meet the require-

ments of structural, dynamic and infor-

mation completeness. In such cases, carry

out decomposition of the system, under-

standing under this procedure - the selec-

tion and examination of all major subsys-

tems that affect the ultimate goal of the

system. It is possible on the basis of deduc-

tive approach.

Fgure 1 – Model of sustainable development

A

Today, from our point of view, due to some problems with of energy, raised by environmen-tal concerns such as environmental, it is im-portant analyze so-called energy budget of ter-ritory. Because we do not have well-established scholars over Ukraine's energy strategy, includ-ing appropriate plant operation, development of alternative energy sources, including prospects to develop agriculture. Study of Scientific Her-itage S. Podolynsky allows him to consider ap-proaches to improve the concept of our country in particular energy budget of its territory.

ÉNERGIE LIBRE ECONOMICS

Ukrainian scientist S.Podolynsky

BFSE.COM.UA 7

Using elements of deductive approach, the

energy budget of any territory can be pre-

sented in the scheme (figure 2).

In terms of system analysis of this struc-

ture can be classified as:

open system where matter and

energy are transformed;

system is not homogeneous, as its

structure can be distinguished as the set of

subsystems

a system in which signs of the

product (quantity, quality, etc.) make it

difficult to determine its value.

A key element of the studied system is

energy. On the one hand, it is one of the

basic properties of matter, the total meas-

ure of all forms of movement, on the other -

the ability to perform some work or the

source of the force, which will perform the

work. Hence the "energy" in general we

understand the ability to develop force. At

the same time converting and makes ener-

gy conservation work, this leads to its accu-

mulation at the disposal of mankind. The

role of energy conservation law in society

and the impact of people on the transfor-

mation of energy on Earth showed S.

Podolynsky. He gave an analysis and classi-

fication of types and sources of energy

available to mankind at that time. This -

solar energy (radiation, photosynthesis,

wind, falling water), energy of Earth's rota-

tion (inflows), accumulated on the Earth

Solar energy (coal, oil). Movement and

transformation of matter and energy in the

ecosystem is shown in Figure 3. Sun contin-

ues to offer us a huge amount of non con-

verted energy and its stock is still very

large. But it does not run that the distribu-

tion of energy on the Earth's surface would

be most beneficial to human life . Possibility

of the better distribution of the energy - to

some extent – is in the hands of the person.

Quantitative characteristic in this case is

“energy capacity”

Figure 2 – Scheme of the “Energy budget of territory”

Figure 3 – Scheme of movement and transformation

of matter and energy in ecosystems


BFSE.COM.UA 8

- the property system to perceive, process,

absorb and transport the external energy,

and give it away outside the system. This

property is closely linked to productivity,

as evienced by the last unit of measure -

the mass or amount of energy that is con-

centrated in the mass. In a mass of differ-

ent substances are different amounts of

concentrated energy. Types of energy and

their characteristics are presented in Ta-

ble. 1.

Investigating energy, S. Podolynsky

proceeded from the fact that the amount

of energy is a universal value that is un-

changed. But in some parts of Earth it is

distributed unevenly, causing wide-

spread tendency to counterbalance it and

the gradual dissipation. Regarding energy,

as global figure S. Podolynsky showed

ability of the person to influence its

movement and accumulation. Natural sys-

tem receive external energy from the sun,

which emits gamma spectra of complex

rays in a wide range of wavelengths - from

0,1 to 3000 nm.

Conservation and energy conversion

based on the equation of energy balance.

Human play the role of the transformer,

obtained from the Sun to give energy

work. Structures which was built on Earth,

have a high price because of work, be-

cause they spent lots of solar energy.

Podolynsky never minimalized role of so-

cially useful work, he was more interested

in the accumulation of living matter on the

planet - or, more simply organic matter,

begotten by the Sun, as a precondition for

any work and most earthly wealth - abso-

lute capital.

Podolynsky showed that human labor is

useful, mainly in agriculture, reducing the

scattering of solar energy, increases its

fate, which piled on the Earth's surface in

the form of "transformed" energy. Also

S.Podolynsky made definition for the con-

cept "useful work" it is "all mechanical and

mental consumption of human and animal,

which increasing budget of transformed

energy on the earth's surface"

He distinguished two aspects of ener-

gy: physical and social .

Physical - to reduce all forms of energy

dissipation through the rational use of en-

ergy accumulated on the Earth.

Social - is to save energy (wealth) be-

tween generations. In relation to the whole

generation it has an integral character.

Exploring the system in general,

S.Podolynsky in the "work of man and its

relation to energy distribution" summariz-

es the components of energy budget areas:

• The total amount of energy derived

Earth's surface, gradually decreasing, but

also its accumulation at the disposal of

mankind under the influence of increased

labor rights and pets;

• Perfect machine is humanity with

all its economy (fields, droves, machines,

etc.). Productivity increases human con-

sumption of this work on the transfor-

mation of higher energies into the higher

(production of machines, etc.);

Types of energy

Characteristics

Internal energy Energy system, which depends on the internal state of the system (it includes all

forms of energy system components)

Mechanical energy The energy of mechanical motion and interaction of bodies or their parts (energy

magnetic field - magnetic energy, electromagnetic energy fields - electromagnetic

energy, energy of moving particles - the kinetic energy, energy particles fixed in a

gravitational field - potential energy, energy of the atomic nucleus - nuclear energy)

Heating energy Level or change the thermal state (heat) system (the body) during the process

Electric energy The energy of interaction and motion of electric charges

Table 1 - Types of energy and their characteristics

“The role of energy conservation law in society and

the impact of people on the transformation of energy

on Earth showed S. Podolynsky. “


BFSE.COM.UA 9

• Use of solar energy as an engine and

direct preparation of nutrients from inorgan-

ic materials fundamental to the continuation

of the most advantageous energy storage on

the Earth;

• Actions that result in the phenomenon,

the opposite of work, is theft (scattering,

embezzlement) power of humanity, in partic-

ular - the war, an arbitrary limit of popula-

tion, production of luxury goods and unpro-

ductive consumption. Instead, improvement

of human life quantitatively increases the

energy budget of each individual.

Several types of energy in one area can

change one kind to another, it should be

viewed with exergety position [6], such as:

• considering the field of environment

and their impact on processes of energy con-

version;

• preventing the possibility of an equilib-

rium system and the environment.

In this case, the maximum work that can

be executed from a given quantity of heat is

determined by Carnot.

- am- bient tempera-

ture, К;

- temperature of the source, К.

Thus, we can build energy model of our

civilization in the form in which it exists in a

living reality. It should be remembered that

"the main purpose of humanity should be an

absolute increase in energy budget. The only

limit "best possible accumulation of energy

on Earth" is "only the absolute amount of

energy from the sun and organic materials

that are on earth"

So the problem of creating energy budg-

et of each territory is exists. And

S.Podolynsky proposed a method in which

we can easily create energy budget and use

this energy without any harm for nature.

Problem of using or not using alternative

sources of energy should be solved by hu-

manity in the way of rightly using alternative

sources of energy. Thus, we should create

energy budget of territory and widely use it.

Taras Reshetyuk

[email protected]

Photograph by Michael Melford Sourse :http://ngm.nationalgeographic.com/2009/09/solar/johnson-text


“Investigating energy, S. Podolynsky proceeded from

the fact that the amount of energy is a universal value

that is unchanged. “

BFSE.COM.UA 10

The Carbon fund operations have demonstrated numerous opportunities for collaborating across sectors, and have served as a catalyst in bringing climate issues to bear in projects relating to rural electrification, renewable energy, energy efficiency, urban infrastructure, waste manage-ment, pollution abatement, forestry, and water resource management.

WORLD'S LARGEST CARBON FUNDS: CREATION,

PERSPECTIVES ON FUNCTIONING AND DEVELOPMENT

fter adoption of Kyoto Protocol to

the United Nations Framework Con-

vention on Climate Change, crea-

tion of the European Union Emis-

sions Trading Scheme (EU ETS) we faced a

tremendous growth on the global carbon

market. The major instrument on this mar-

ket is emission reduction, which allows to

emit the specific amount of greenhouse

gases. This market is called “carbon mar-

ket” and today the word “carbon” we also

use with widely known processes and insti-

tutions (such as financing, funds, exchange

etc.). Carbon market is a relatively new

market, where huge risks, low liquidity, the

lack of guarantees, specific goods and spe-

cial pricing conditions are present, as in

every new market worldwide. But despite of

numeral negative characteristics this mar-

ket increases the concentration of capital

from year to year very fast, becomes more

attractive for investors and integrates more

and more financial institutions (see Fig. .1).

One of such institutions is carbon fund,

which acts as guarantor, reduces risks, in-

creases liquidity and is responsible for the

evolution of the carbon market. The main

initiative to establish carbon funds are in-

ternational financial institutions financed by

private and public funds. In addition, there

are funds that are fully subordinated to cor-

porations and banks. Their main feature of

all funds is that they finance projects aimed

at reducing emissions and purchase of so

called “reduction units”. To show the

A

ÉNERGIE LIBRE FINANCE

BFSE.COM.UA 11

role of financial institutions in this market

we will try to demonstrate the size and char-

acteristics of some carbon funds. The largest

carbon funds in the world are:

a. Thirteen carbon funds of the

World Bank.

b. Six carbon funds of the Euro-

pean Investment Bank.

c. Carbon Funds of the European

Bank for Reconstruction and

Development.

d. Two carbon funds of the Asian

Development Bank.

e. Carbon fund sof the Kfw

(Kreditan-stalt für Wiederauf-

bau).

f. European Carbon Fund.

One of the largest international financial

institutions - the World Bank, also does not

evade the problem of climate change and

has pioneered the creation of has estab-

lished the maximum number of carbon

funds. Unlike other institutions, the World

Bank does not provide or guarantee loans

for projects, but purchases the reduction

units by paying for them one-off or periodic

payments after the units have been con-

firmed. Financial resources of the World

Bank all carbon funds of in 2010 amounted

to 2.3 bln. USD. First Carbon Fund of the

World Bank, called Prototype Carbon Fund

(PCF), was founded in 2000 (See Table 1).

Since then, almost all World Bank funds

CFU (Carbon Finance Unit) are formed by

private and government funds. Total number

of private companies that participated in the

formation of carbon funds of the World Bank

is 66, governments - 16.The activities of the

funds focus on projects within the Clean

Development Mechanism and Joint Imple-

mentation of Kyoto Protocol. The largest

number of reduction units is achieved by

carbon funds through the implementation of

projects in the field of alternative energy,

energy efficiency and reduction of industrial

fluorinated gases HFC-23. Geography of the

funds is Latin America, Europe, Asia and

Africa (see Table 2).

Considering the largest number of pro-

jects among the carbon funds of the World

Bank, we can identify Community Develop-

ment Carbon Fund (CDCF). Founded in

2003, the fund acquired reduction units in

28 projects, of which 43% - the projects in

the field of alternative energy. Interesting is

the fact that the founders

Fund name Fund budget (millions of USD)

Number of Projects Volume, (million tonnes of

CO2)

Prototype Carbon fund

128,6

24

28,2

Tabl.1. Key performance indicators of the Prototype Carbon Fund

Source: http://wbcarbonfinance.org

The World Bank Carbon

Finance Unit(СFU)

Number of Projects

Value of Projects (bln.

USD)

Volume, (million tonnes of

CO2)

155 1,7 208

Tabl.2. Investment portfolio of World Bank carbon funds

Fig.1. Global carbon market capitalization, bln. USD.



BFSE.COM.UA 12

of the fund include are the governments of

9 countries governments and 16 private

companies (see Table 3).

Among World Bank carbon funds, in

terms of amounts of funding and number of

emission reductions acquired, we can note

Umbrella Carbon Facility tranche 1.

This fund was founded in 2006 with capital-

ization of 775 million euros. By now Um-

brella Carbon Facility tranche 1 has 129

million of emission reduction units. These

units were acquired from Greenhouse Gas

Reduction Projects (HFC-23). Just after

Durban Climate Change Conference

(November/December 2011) the World

Bank, together with Deutsche Bank, GDF

Suez and Swedish Energy Agency an-

nounced the creation of a new carbon fund

- Umbrella Carbon Facility tranche 2.

The activities of this fund will allow project

developers to continue selling carbon cred-

its generated after 2012, under the Clean

Development Mechanism (CDM).

Other significant carbon funds of the

World Bank are: The Bio Carbon Fund,

Carbon Partnership, Spanish Carbon

Fund and Danish Carbon Fund (see Fig.

2).

Another significant player in the carbon

market is the European Investment Bank

(EIB). The appearance of a large number of

carbon funds managed by this organization

is caused by, firstly, the commitments made

by the European Union to reduce emissions

under the Kyoto Protocol, and secondly, the

introduction of European Union Emissions

Trading Scheme (EU ETS). The EIB started

to finance its carbon projects simultaneous-

ly with the World Bank – in March 2007.

International financial institutions are man-

aging the Carbon Fund for Europe with a

capitalization of about 50 million euros and

3.1 million metric tons of CO2 emission re-

ductions. Another 5 carbon funds are man-

aged by the EIB. (See Table 4).Carbon EIB

Funds are generated by private and govern-

ment resources. The financial resources of

the EIB carbon funds amount to about 809

million euros. Such institutions as KfW,

Caisse des Dépôts, Nordic Investment

Bank, Zeroemissions, CEZ and Endesa

contribute significantly in the financing of

these funds.

Tabl.3.Key performance indicators of Community Development Carbon Fund (CDCF)

Fund name Budget

(millions of USD) Number of Projects

Volume, (million tonnes

of CO2)

Community Development Carbon

Fund 128,6 29 7,1


90,4 mln $ 140 mln €

The Bio Carbon Fund (Tranche1,2) Carbon Partnership Facility

220 mln €

90 mln $

Spanish Carbon Fund Danish Carbon Fund



Fig.2. Capitalization of some carbon funds of the World Bank

BFSE.COM.UA 13

Financial flows of the funds are aimed

both at development of relevant projects and

purchase of reduction units, under the Clean

Development Mechanism and Joint Imple-

mentation of Kyoto Protocol.

The European Investment Bank cooper-

ates very successfully not only with the

World Bank (they have a common carbon

fund), but also with the European Bank for

Reconstruction and Development (EBRD).

The result of such cooperation is Multilat-

eral Carbon Credit Fund (MCCF), created

in 2005 with a budget of 208.5 million euros.

MCCF focuses on projects in the field of

energy, energy efficiency, developing alter-

native sources of energy and other projects

aimed at reducing greenhouse gases emis-

sions. The fund is developing projects in

different countries of Eastern and Central

Europe and Central Asia etc.). In Eastern

Europe, in addition to the development of

projects under the Joint Implementation

Mechanism, MCCF works under the scheme

of "green investments". For this purpose the

fund has divided its budget into two parts:

Green Fund (58.5 million euros) and Project

Fund (150 million euros).

After 17 UN Conference in Durban

(South Africa) the future of the Kyoto Proto-

col remains indefinitely, creating a signifi-

cant risk for the use of Kyoto units that will

be issued after 2012. However, these cir-

cumstances do not apply to Carbon Fund

Post-2012, founded by the EIB and other 4

financial institutions with high credit rating.

The fund was launched in March 2008 with

a budget of 125 million euros. Post-2012

Carbon Fund focuses on buying carbon

credits to be received after 2012. The Fund

is interested in projects in the field of renew-

able energy, energy efficiency, projects to

reduce methane emissions at industrial

sites and projects for disposal of greenhouse

gases - Carbon Capture and Storage pro-

jects (CCS). Today the Post-2012 Carbon

Fund is dealing with projects for 1 million

tonnes of reduction units (see Table 5). As-

sets of this fund are managed by Connie

(Europe) Limited – an investment adviser to

the fund First Climate.

The international institution - Asian

Development Bank's (ADB) supported the

economies of low-carbon in Asia and the

Pacific, proposing to implement Carbon

Market Program (CMP). The main result

Name Period of generation, years Expected amount of reductions (СERs)

1. Nigeria Landfill Gas Project. 2013-2017 700,000

2. India Wind Energy Project. 2013-2020 260,000

Tabl.4. The largest carbon funds managed by the EIB

Tabl.5.Emission reduction projects, managed by the Post-2012 Carbon Fund

Source: http://www.eib.org/

Source: http://ngm.nationalgeographic.com/2009/09/solar/johnson-text

Name Budget (mln euros)

1. Multilateral Carbon Credit Fund 208,5

2. Mediterranean Carbon Fund 200,0

3. EIB/KfW Carbon Purchase Programme (I,II) 190,0

4. Post-2012 Carbon Fund 125,0

5. Carbon Fund for Europe 50,0

6. Fonds Capital Carbone Maroc 36,0

All together 809,0


BFSE.COM.UA 14

of two new funds: Asia Pacific Carbon

Fund (APCF) and Future Carbon Fund

(FCF). Asia Pacific Carbon Fund was es-

tablished in 2007 in order to purchase re-

duction units generated by 2012. Portfolio

of this fund includes 48 projects (see Ta-

ble. 6).Such organizations as Fundo Portu-

gues de Carbono (Portugal), Swedish Ener-

gy Agency (Sweden), The Grand-Duchy of

Luxembourg, Climate Cent Foundation

(Switzerland) and others are among the

members of APCF. The activities of the

Future Carbon Fund, established in 2008,

is evidenced by its name. FCF focuses on

purchasing of reduction units to be gener-

ated after 2012. Fund's portfolio includes

25 projects (see Table. 7).The participants

of FCF included: FCF PMV (Belgium), Min-

istry of Strategy and Finance with Export-

Import Bank of Korea, Swedish Energy

Agency, POSCO (South Korea), Eneco En-

ergy Trade (Netherlands). Both funds are

focused on projects in the fields of renewa-

ble energy, energy efficiency, reducing

emissions of methane and cleaning water

(Clean Development Mechanism).

Another financial institution that plays

a leading role in the carbon market is KfW

(Kreditanstalt für Wiederaufbau) (see Ta-

ble. 8).

The financial institution KfW started its

activities in the carbon market in 2004,

creating KfW Carbon Fund in collaboration

with the Government of Germany, In addi-

tion to the cooperation with Government of

Germany, KfW Carbon Fund works to-

gether with the European Investment

Bank, the World Bank and private

Source:http://www.kfw.de/kfw/en/KfW_Group/Sustainability_and_Climate_Protection/Procurement_Programmes/

Participation_in_the_Post_2012_Carbon_Credit_Fund/index.jsp

Name Budget

(mlnUSD) Number of Projects


CO2)

AsiaPacificCarbonFund 151,8 48,0 10,2

Tabl.6.Key performance indicators of the Asia Pacific Carbon Fund (APCF)

Tabl.7.Key performance indicators of the Future Carbon Fund

Name Budget

(mln USD) Number of Projects


CO2)

Future Carbon 115,00 25 8,20

Name of the fund Founders Budget

(mln euros)

1. KfW Carbon fund KfW banking group. German Federal govern-

ment. 84,0

2. EIB-KfW Carbon Programme I KfW banking group. European Investment Bank 90,0

3. EIB-KfW Carbon Programme IІ KfW banking group. European Investment Bank 100,0

4. Post-2012 Carbon Fund

KfW banking group. European Investment

BankCaisse des Dépôts. Nordic Investment

Bank. Instituto de Crédito Oficial

125,0

5. Community Development Car-

bon Fund

KfW banking group. World bank. (other compa-

nies and government) 2,5

Tabl.8.Key performance indicators of the KfW (Kreditanstalt für Wiederaufbau)

Source: http://adb-apcf.org/project_cycles/

Source: http://adb-apcf.org/project_cycles/


BFSE.COM.UA 15

companies. The main purpose of the KfW`s

funds is to support the development of the

Flexible Mechanisms under Kyoto Protocol

and participate in the European Union Emis-

sions Trading Scheme (EU ETS). KfW, to-

gether with the European Investment Bank,

has established the EIB-KfW Carbon Pro-

gramme I and EIB-KfW Carbon Programme

II. As a result of carbon financing, KfW has

signed contracts worth 40 million tonnes of

CO2 in the 92 projects. The KfW`s carbon

fund is acting in the countries of Asia, North

America, Africa and Europe. Projects in the

field of alternative energy form 73% of the

Fund's portfolio, of which 26% are wind

Power, 20% - for processing and utilization

of organic waste gases.

Established in 2005, European Carbon

Fund became one of the first private carbon

funds in the market. The Fund commenced

operations receiving financial support from

the CDC Climat (subsidiary Caisse des Dé-

pôts, France) and BNP Paribas-Fortis

(France). The list of investors includes addi-

tional twelve financial institutions. As a re-

sult, the resources of the Fund reached

142.7 million euros. The Foundation focuses

on projects under Article 12 of the Kyoto

Protocol (CDM) (see Table 9). Since its in-

ception, the Fund has bought 67 million of

Certified Emission Reductions (CERs),

gained from 27 projects. The fund acts in

countries from Asia, South America and Afri-

ca. Investors of the Fund are the companies

such as: Citadel group, Allianz, Societe Gen-

erale, UniCredit and others. The fund is

managed by Natixis Environnement &

Infrastruc -tures.

The research of selected international

and private carbon funds showed great in-

terest of international financial institutions

and private capital in development of low-

carbon economy and stimulation of the car-

bon market. The characteristic feature of

the carbon market is the presence of signifi-

cant risks, therefore it is logical that initia-

tors of most carbon funds are the interna-

tional financial institutions

(The World Bank, EIB, Asian

opment Bank, European Bank for

Reconstruction and Development).

Despite the turmoil in the global econo-

my, unresolved fate of the Kyoto Protocol

and reduce the price of emission permits

(see Fig.3), the funds do not reduce the

amount of financing projects and continue to

build up their portfolios. The most popular

among the carbon funds are reduction units

from projects in the field of alternative ener-

gy, energy efficiency and related projects to

reduce emissions of fluorinated gases.

Name of the project CDM Project Company Volume,

(million tonnes of CO2)

1.Essaouira, Morocco, 60 MW wind

farm. Office Nationaled’Electricit 1,400,000

2. Yangquan Coal Mine Methane

(CMM) Utilization for Power Gener-

ation Project.

Yangquan Coal Industry (Group)

2,136,174

3. Paulinia Land fill Gas Project. ESTRE 1,050,000

Tabl.6.Key performance indicators of the Asia Pacific Carbon Fund (APCF)

Source: http://www.europeancarbonfund.com/en_index.html

Gonta Andrey

Chief of civic Organization «Vilna Energia»

[email protected]

“…carbon fund, which acts as guarantor, reduces risks,

increases liquidity and is responsible for the evolution

of the carbon market.”

Source: http://www.climate-connect.co.uk/Home/?q=node/1779

Fig.3 Price trend of CER Spot prices at Bluenext Exchange


BFSE.COM.UA 16

ost of the people haven’t hear so

much about green economy, but

majority see it as “a recent phe-

nomenon, something that has sud-

denly sprang up” and the time is not ripe

for action now. BUT the green economics is

the economics of the real modern world—

not just about the environment, but the

world of work, human needs, the Earth’s

materials, and how they mesh together

most harmoniously. It is about regenera-

tion (not about accumulation) of individuals,

communities and ecosystems. So every Hu-

man being and human worker can no longer

serve as cogs in the machine of accumula-

tion, be it capitalistic or socialistic. It’s a

brand new system, which has been chang-

ing all the spheres of people’s lives and

minds. So, you still think that it for all you

cares!?

Certainly we must move to harmonize

with natural systems. But doing this re-

quires great human creativity, tremendous

knowledge, and the widespread participa-

tion of everyone: individual, government,

businessmen, household, community. But I

would like to illustrate the impact of busi-

ness into the green world, to show the first

steps on the way of global green regenera-

tion. Today, green business is profitable

branch of the business world. Probably this

is the reason why such companies are criti-

cized. The green business is really in its

infancy, and the future of being green will

no doubt distill down to some very real and

definable goals and practices. But my aim is

to involve nonchalant individuals into the

green world, that’s why I’ll be consider

them as the most progressive link in the

green movement chain. Today’s business is

all about being green. From Wall-mart to

Apple, everyone is talking about how green

their approach, packaging, or methods are.

In order to be considered a green business,

a company must use practices which are

viewed as sustainable and environmentally

friendly. These practices might include the

use of organic and natural products to build

its factories, tighter protections against

emission, and environmentally responsible

sourcing of supplies.

Fashion

THE GREEN ECONOMY ARISES FROM YOURSELF

“Wal-Mart took up the "green" initiative, and introduced

plans for an environmental overhaul, including making

its trucks more efficient...”

M

It's time to see green economy as a pathway out of economic recession. Green economy is one that will drive investment and financial flows towards restoring our environ-

ment and generating a better quality of life for all.

ÉNERGIE LIBRE FEUILLETON

BFSE.COM.UA 17

For example, FedEx and United Parcel Ser-

vice using hybrid vehicles in an attempt to

cut costs and reduce their environmental

impact.

In 2005 General Electric launched

Ecomagination, representing a commit-

ment to produce technology that reduces

energy consumption and waste. Such com-

panies as Toyota and Honda continued to

improve their hybrid technologies. As a

result, as consumer concern about climate

change grew, these companies stood ready

to provide earth-friendly products. Compa-

nies like Nike Inc., which set targets to

reduce waste and packaging and become

"climate neutral", and Hewlett-Packard ,

which is working toward reducing waste

and setting up recycling services for elec-

tronic waste, made the “Global 100 Most

Sustainable Corporations in the World”, list

based on how well they managed environ-

mental risks and opportunities compared to

their competitors (Global 100 Most Sus-

tainable Corporations in the World

2011,2011). Companies like Alcoa and

Dupont, for example, have established sys-

tems to reduce carbon emission and other

harmful chemicals, the most likely targets

for government intervention. Wal-Mart

took up the "green" initiative, and intro-

duced plans for an environmental overhaul,

including making its trucks more efficient,

building new stores with strict energy con-

servation goals and pushing suppliers to

reduce packaging. Apple also becomes

greener: they started recycling in 1994 and

today they operate recycling programs in

countries where more than 82% of all Macs

and iPods are sold. Apple’s U.S. retail

stores take back unwanted iPods for envi-

ronmentally friendly disposal free of

charge. As an incentive, they even offer


Source:http://powerelectronics.com/power_systems/smart-grid-success-rely-system-solutions-20091001/

BFSE.COM.UA 18

Inditex group obliged its 5000 shops

throughout the world to reduce energy use

by 30 % and cut water use by half till

2015. It’s the very least needed for LEED

(Leadership in Energy and Environmental

Design) certification.

Levi's has launched ecologic pro-

gram WaterLess, aimed at reduction of

water usage at all stages of jeans produc-

tion and people’s lives. It is claimed, that

settling this program will save on 20 mln l

— what is enough to supply the city with

population of 10 000 with drinking water.

In addition, Levi's stimulate customers to

save on water and hand over part of sales

return to charitable institution Water.org.

To highlight the seriousness of green

trend, let’s look at carbon market. “In a

market worth in excess of 188 Billion Dol-

lars, demand for Carbon Offsets is rising

dramatically due to companies such as

Marks &Spencer, Jaguar Land Rover,

Aviva & the Co-Operative, to name just

four, committing comprehensively to car-

bon neutrality with their competitors fol-

lowing suit, this drive for demand is conse-

quently pushing up the price of credits

fast”. So, look around, maybe you have

already been involved into the green life!?

But unconscious impassive usage is not

enough. I don’t want to incline you to

spending lots of money, time and force on

environmental protection. I want you to

start with easy tips:

-Save energy to save money (Set

your thermostat a few degrees lower in the

winter and a few degrees higher in the

summer. Install compact fluorescent light

bulbs. Unplug appliances when you're not

using them)

-Save water to save money (Take

shorter showers. Install a low-flow shower-

head)

-Less gas more money (and better

health!) (Walk or bike to work. Lobby your

local government to increase spending on

sidewalks and bike lanes.)

-Eat smart (Add one meatless meal a

week. Buy locally raised, humane, and or-

ganic meat, eggs, and dairy whenever you

can.)

-Skip the bottled water (Use a water

filter to

purify tap water instead of buying bot-

tled water. Bring a reusable water bottle.)

-Think before you buy.

-Borrow instead of buying.

-Buy smart (Invest in high-quality,

long-lasting products)

-Keep electronics out of the trash

(Keep your electronics as long as possible.

Donate or recycle them responsibly when

the time comes.)

-Make your own cleaning supplies

(All you need are a few simple ingredients

like baking soda, vinegar, lemon, and

soap). So, let’s start with ourselves!

“Wal-Mart took up the "green" initiative, and introduced

plans for an environmental overhaul, including making

its trucks more efficient...”

Natali Palyona

[email protected]

Source:http://www.thecorner.eu/2012/09/ferrovial-selected-for-dow-jones-

index-of-most-sustainable-companies/


BFSE.COM.UA 19

ENERGY PROSPECTS FOR NATIONAL ECONOMY MAN-

AGEMENT SYSTEM. EVERYTHING NEW IS ACTUALLY

WELL-FORGOTTEN OLD Most of the ideas that now seem innovative and worthy of attention have a long and continuous

history of success and failures.

or example, one can recollect N.

Tesla’s idea of using alternating

current network to transfer energy

over long distances. For a long

time this idea could not be realized due to

resistance from the market monopolists,

who were threatened with the loss of their

profit. And just over time it became obvious

for everyone that such an approach was not

only innovative in the industry, but also

made it possible to implement a number of

projects in other sectors of economic and

social activities.

The same story happened with the pro-

posal for the creation of Statewide Auto-

mated Management System for Collection

and Processing of Information for the Ac-

counting, Planning, and Management of the

National Economy (in Russian, abbrevia-

tion, OGAS) by B.M. Glushkov. In the early

60's Mr. Glushkov was one the first who

saw the perspectives in the creation of such

a computerized system that would optimize

the business, economic and financial pro-

cesses in the state. The idea, which was

immediately accepted with a great enthusi-

asm and gained a considerable support at a

high level of management, eventually began

to lose its power. But at that time there

existed, a number of reasons, which signifi-

cantly hindered the development of this

project.

First of all, one should mention a State

Planning Commission (Gosplan), which was

a colossus - the embodiment of Lenin’s

vision of a planned economy, and bureau-

cratic apparatus, the abolition of which

would lead to necessity of retraining or cre-

ation of new working places for a huge

number of civil servants. Moreover, manag-

ers of state enterprises immediately real-

ized the extent of "elimination of the shad-

ow economy" and disclosure of operational

information about the actual performance

of their activities.

Secondly, implementation of such a large

project required significant funds. For ex-

ample, a project to build an automated con-

trol system (ACS) called for 4-5 billion

“roubles”1 , while OGAS needed almost 20

billion.

“….of three five-year periods this project was to bring

almost 100 billion “roubles” to the state budget.”

BFSE.COM.UA 20

ÉNERGIE LIBRE TECHNOLOGIES

F

However, at the end of three five-year

periods this project was to bring almost

100 billion “roubles”2. to the state budget.

Thirdly, another obstacle deterring fur-

ther development of such of such a sys-

tem was the level of IT technologies. At

that time the data had to be entered on a

periodic basis, which slowed down the pro-

cess of collecting and processing infor-

mation.

The procedure itself was cumbersome

and required a human directly involved in

the process. As a result, the project has

been implemented only in a few sectors.

This fact disallowed to realize all the bene-

fits of this innovative method and excluded

the possibility of creating an integral auto-

mated control system for

of production system existing for many

decades.

Today’s reality revealed the inability of

economy to operate in a market, where

high rates of growth of industrial produc-

tion are reached managing business , eco-

nomic and financial processes in the state.

Over time there have been changes that

have shown all imperfections

only through a more intensive use of the

limited non-renewable natural resources.

Such policy eventually resulted not only in

depletion of the existing resources stocks,

but also in degradation of natural environ-

ment3.

Taking into account such global meta-

morphosis, most of the states in the world

chose the policy to develop the renewable

energy sources. This decision gives them

good opportunities not only in the fight

against climate change, but also in the

economic and financial issues. However,

diversification of energy sources requires a

fundamental alteration of the existent pow-

er system. Bringing the share of renewable

energy sources in total energy consump-

tion to 20% in 2020 (plans of Europe and

USA) requires the implementation of a

system which would enable to regulate the

voltage drops in the network4 (see Fig. 1).

The new system, supplying electricity to

consumers, will also include the construc-

tion of power storages, which could extract

the surplus energy from the smart grid

during the over-voltage, and pump it back

in case of power shortage. Such system

resembles greatly the economic relations

in general, where there is a specific pro-

duction process with the results consumed

either immediately or when they are

moved to the surplus store for further im-

plementation in a time of scarce.

1.Kutsyk , Mahar , Stavchikov Problem of increasing the efficiency of ACS / BS Kutsyk, NV

Mahar, AI Stavchikov. - Moscow: Nauka, 1982. - S. 17.

2.Malinowski The history of computer technology in their faces. - K.: firm "KIT" VET "ASK",

1995. - 384 lopment: critical issues. - Organisation for Economic Co-operation and Development, 2001.

– Р. 69-71.

3.. Sustainable development: critical issues. - Organization for Economic Co-operation and

Development, 2001. – Р. 69-71.

Fig.1. Areas for modernization of existing smart grid supply in North America.

Source:http://powerelectronics.com/power_systems/smart-grid-success-rely-system-solutions-20091001/


BFSE.COM.UA 21

The idea of building a “reasonable net-

work” is implemented simultaneously in

Northern America and Western Europe.

And while European variant covers mainly

the most developed countries (e. g., Germa-

ny), American project approved by the

State Department of Energy and by Power

Transmission Office in 2003, stipulates the

construction of a network that would sup-

ply energy to nearly 130 mln people in the

early stages. Future expansion of the pro-

ject is provided by Mexico and Canada. 5

Up to year 2030, American project calls

for 165 billion dollars of investments (from

8.3 billion to 18 billion dollars per year).

However, the economic effect of this pro-

ject will range between 638 and 802 billion

dollars after its implementation (1 dollar of

investment will bring 4-5 dollars of profit)6.

At first glance, it seems that modern

power project and work by V.M. Glushkov

concern different spheres of economy. sys-

tem requires the availability of the levels,

similar to those that are introduced in the

project by V.M. Glushkov.

But it is the use of energy as a unit al-

lows to remove a number of the re-

strictions, with which our compatriot’s pro-

ject faced in his time

Firstly, implementation of Smart Grid

system requires the availability of the lev-

els, similar to those that are introduced in

the project by V.M. Glushkov.

Both projects have collected information

processing center (State Energy Company/

Agency) with adjoined regional units

(distribution companies), where breakdown

by industry takes place. At the bottom of

the chain there are consumers of electricity

using so-called "reasonable counters" that

facilitate the work of not only energy sup-

plier, but also for the user. Those devices

facilitate the work of power suppliers and

users.

The “Smart Grid” itself in North

America, according to the approved docu-

ments, will include the following compo-

nents:7

- national electricity supply system in

the USA;

- regional electricity supply systems in

Mexico and Canada;

- local networks for supplying electrici-

ty to final consumers.

Secondly, final consumers will get a spe-

cial device that every few seconds passes

the information about the amount of energy

consumed to the supplier. At the same

time, the consumer has the ability to regu-

late with his own hand the way and the

amount of electricity consumption, up to

determine the order of representation of

individual appliances.

Hence, it is possible to obtain the real-

time information about the necessary vol-

umes of electricity, and, as a result, the

management company receives an im-

portant tool for the planning of its activi-

ties.

Thirdly, taking into consideration the

existing methods of analyzing shadow econ-

omy, the most common is that one which is

based on a comparison of the volumes of

energy consumed by national economies.

The data show that almost 54% of the

national economy "operated in the shadow"

at the beginning of 2000 8.

Fourthly, it is necessary to recall the

work of technocrats led by H.Scot. They

were the first to count the balance of the

U.S. economy using power units, allowing

them to avoid fluctuations in the price

(excluding the destructive influence of mon-

etary factor) and get real out-

put9.Moreover, representatives of this

trend used power units to foresee the onset

of energy crisis of the 70’s in the USA.

Thus, the proposed integrated "smart

grid" is the real embodiment of ideas to

build OGAS as a system monitoring and

controlling of the entire country's economy.

The use of power units instead of modern

cash is an important prerequisite for long-

term and accurate planning of business

processes and protecting them from the

influence of inflation.

5 Richard J. Campbel. Smart Grid and Cybersecurity – Regulatory Policy and Issues / CRS Report for Congress, June 15,

2011. – P. 11.

6.Tony Seba. Solar Trillions - 7 Market and Investment Opportunities in the EmergingClean-Energy Economy. – First Beta

Edition, 2009. – P. 229.

7.Adrian T. Sobotta, Irene N. Sobotta, John Gøtze. Greening It. How Green IT Can Form a Solid Foundation For a Low-

Carbon Society. – The Green IT Initiative, 2009. – P. 143.

8.Freferich Schneider, Dominik Enste. Shadow Economies Around the World: Size, Causes and Consequences // Working

Paper 00/26. – Washington D.C.: International Monetary Fund, February 2000. – Р. 10.

Alexander Sushchenko, associate professor

Department of Finance KNEU them. Hetman

[email protected]

BFSE.COM.UA 22


ÉNERGIE LIBRE POUR LES NOTES

BFSE.COM.UA 23

“Climate change is the defining challenge of our age.”

Ban Ki-moon, CMP 3, Bali, Indonesia

Email address :

[email protected]

Website:

www.bfse.com.ua

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