A New Middle Stance Emerges in Debate over Climate

By ANDREW C. REVKINPublished: January 1, 2007

Amid the shouting lately about whether global warming is a human-caused catastrophe or a hoax, some usually staid climate scientists in the usually invisible middle are speaking up.

The discourse over the issue has been feverish since Hurricane Katrina. Seizing the moment, many environmental campaigners, former Vice President Al Gore and some scientists have portrayed the growing human influence on the climate as an unfolding disaster that is already measurably strengthening hurricanes, spreading diseases and amplifying recent droughts and deluges.

Conservative politicians and a few scientists, many with ties to energy companies, have variously countered that human-driven warming is inconsequential, unproved or a manufactured crisis.

A third stance is now emerging, espoused by many experts who challenge both poles of the debate.

They agree that accumulating carbon dioxide and other heat-trapping smokestack and tailpipe gases probably pose a momentous environmental challenge, but say the appropriate response is more akin to buying fire insurance and installing sprinklers and new wiring in an old, irreplaceable house (the home planet) than to fighting a fire already raging.

“Climate change presents a very real risk,” said Carl Wunsch, a climate and oceans expert at the Massachusetts Institute of Technology. “It seems worth a very large premium to insure ourselves against the most catastrophic scenarios. Denying the risk seems utterly stupid. Claiming we can calculate the probabilities with any degree of skill seems equally stupid.”

Many in this camp seek a policy of reducing vulnerability to all climate extremes while building public support for a sustained shift to nonpolluting energy sources.

They have made their voices heard in Web logs, news media interviews and at least one statement from a large scientific group, the World Meteorological Organization. In early December, that group posted a statement written by a committee consisting of most of the climatologists assessing whether warming seas have affected hurricanes.

While each degree of warming of tropical oceans is likely to intensify such storms a percentage point or two in the future, they said, there is no firm evidence of a heat-triggered strengthening in storms in recent years. The experts added that the recent increase in the impact of storms was because of more people getting in harm’s way, not stronger storms.

There are enough experts holding such views that Roger A. Pielke Jr., a political scientist and blogger at the University of Colorado, Boulder, came up with a name for them (and himself): “nonskeptical heretics.”

“A lot of people have independently come to the same sort of conclusion,” Dr. Pielke said. “We do have a problem, we do need to act, but what actions are practical and pragmatic?”

This approach was most publicly laid out in an opinion article on the BBC Web site in November by Mike Hulme, the director of the Tyndall Center for Climate Change Research in Britain.

Dr. Hulme said that shrill voices crying doom could paralyze instead of inspire.

“I have found myself increasingly chastised by climate change campaigners when my public statements and lectures on climate change have not satisfied their thirst for environmental drama,” he wrote. “I believe climate change is real, must be faced and action taken. But the discourse of catastrophe is in danger of tipping society onto a negative, depressive and reactionary trajectory.”

Other experts say there is no time for nuance, given the general lack of public response to the threat posed particularly by carbon dioxide, a byproduct of burning fossil fuels and forests that persists for a century or more in the air and is accumulating rapidly in the atmosphere and changing the pH of the oceans.

James E. Hansen, the veteran climate scientist with the National Aeronautics and Space Administration who has spoken out about climate dangers since 1988, has recently said that scientists have been too quiet too long.

“If we want to avoid producing a different planet, we need to start acting now,” and not with paltry steps, he said in a recent e-mail exchange with a reporter and other scientists. “It seems almost to be a secret that we cannot put all of the fossil-fuel CO2 into the air without producing a different planet, and yes, dangerous change. There are people who don’t know that!”

Debate among scientists over how to describe the climate threat is particularly intense right now as experts work on the final language in portions of the latest assessment of global warming by the Intergovernmental Panel on Climate Change.

In three previous reports, the last published in 2001, this global network of scientists operating under the auspices of the United Nations has presented an ever-firmer picture of a growing human role in warming.

Studies used to generate the next report (portions are to be issued in February) have shown a likely warming in the 21st century — unless emissions of greenhouse gases abate — at least several times that of the last century’s one-degree rise.

But substantial uncertainty still clouds projections of important impacts, like how high and quickly seas would rise as ice sheets thawed.

Recent drafts of the climate report used a conservative analysis that does not project a rise most people would equate with catastrophe, scientists involved in writing it say. Other experts say this may send too comforting a message.

Dr. Hulme insists that it is best not to gloss over uncertainties.

In fact, he and other experts say that uncertainty is one reason to act — as a hedge against the prospect that problems could be much worse than projected.

His goal, Dr. Hulme said, is to raise public appreciation of the unprecedented scale and nature of the challenge.

“Climate change is not a problem waiting for a solution (least of all a solution delivered and packaged by science), but a powerful idea that will transform the way we develop,” he said in an e-mail message.

Dr. Hulme and others avoid sounding alarmist, but offer scant comfort to anyone who doubts that humans are contributing to warming or believes the matter can be deferred.

These experts see a clear need for the public to engage now, but not to panic. They worry that portrayals of the issue like that in “An Inconvenient Truth,” the documentary focused on the views of Mr. Gore, may push too hard.

Many in this group also see a need to portray clearly that the response would require far more than switching to fluorescent light bulbs and to hybrid cars.

“This is a mega-ethical challenge,” said Jerry D. Mahlman, a climatologist at the National Center for Atmospheric Research in Boulder, Colo., who has studied global warming for more than three decades. “In space, it’s the size of a planet, and in time, it has scales far broader than what we go-go Homo sapiens are accustomed to dealing with.”

Dr. Mahlman and others say that the buildup of carbon dioxide and other greenhouse gases cannot be quickly reversed with existing technologies. And even if every engine on earth were shut down today, they add, there would be no measurable impact on the warming rate for many years, given the buildup of heat already banked in the seas.

Because of the scale and time lag, a better strategy, Dr. Mahlman and others say, is to treat human-caused warming more as a risk to be reduced than a problem to be solved.

These experts also say efforts to attribute recent weather extremes to the climate trend, though they may generate headlines in the short run, distract from the real reasons to act, which relate more to the long-term relationship of people and the planet.

“Global warming is real, it’s serious, but it’s just one of many global challenges that we’re facing,” said John M. Wallace, a climatologist at the University of Washington. “I portray it as part of a broader problem of environmental stewardship — preserving a livable planet with abundant resources for future generations.”

Some experts, though, argue that moderation in a message is likely to be misread as satisfaction with the pace of change.

John P. Holdren, an energy and environment expert at Harvard and president of the American Association for the Advancement of Science, defended the more strident calls for limits on carbon dioxide and other heat-trapping gases.

“I am one of those who believes that any reasonably comprehensive and up-to-date look at the evidence makes clear that civilization has already generated dangerous anthropogenic interference in the climate system,” Dr. Holdren said. “What keeps me going is my belief that there is still a chance of avoiding catastrophe.”

THE ENERGY CHALLENGE

Wal-Mart Puts Some Muscle Behind Power-Sipping Bulbs

Emile Wamsteker for The New York Times

Customer Andres Moreno walked past a Wal-Mart display of energy-saving fluorescent light bulbs in Secaucus, N.J.

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By MICHAEL BARBAROPublished: January 2, 2007

As a way to cut energy use, it could not be simpler. Unscrew a light bulb that uses a lot of electricity and replace it with one that uses much less.

The Energy ChallengeFrom Product to Cause Articles in this series are examining the ways in which the world is, and is not, moving toward a more energy efficient, environmentally benign future.

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Video Understanding Energy-Efficient Light Bulbs

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While it sounds like a promising idea, it turns out that the long-lasting, swirl-shaped light bulbs known as compact fluorescent lamps are to the nation’s energy problem what vegetables are to its obesity epidemic: a near perfect answer, if only Americans could be persuaded to swallow them.

But now Wal-Mart Stores, the giant discount retailer, is determined to push them into at least 100 million homes. And its ambitions extend even further, spurred by a sweeping commitment from its chief executive, H. Lee Scott Jr., to reduce energy use across the country, a move that could also improve Wal-Mart’s appeal to the more affluent

consumers the chain must win over to keep growing in the United States.

“The environment,” Mr. Scott said, “is begging for the Wal-Mart business model.”

It is the environmental movement’s dream: America’s biggest company, legendary for its salesmanship and influence with suppliers, encouraging 200 million shoppers to save energy.

For all its power in retailing, though, Wal-Mart is meeting plenty of resistance — from light-bulb makers, competitors and consumers. To help turn the tide, it is even reaching out to unlikely partners like Google, Home Depot and Hollywood.

A compact fluorescent has clear advantages over the widely used incandescent light — it uses 75 percent less electricity, lasts 10 times longer, produces 450 pounds fewer greenhouse gases from power plants and saves consumers $30 over the life of each bulb. But it is eight times as expensive as a traditional bulb, gives off a harsher light and has a peculiar appearance.

As a result, the bulbs have languished on store shelves for a quarter century; only 6 percent of households use the bulbs today.

Which is what makes Wal-Mart’s goal so wildly ambitious. If it succeeds in selling 100 million compact fluorescent bulbs a year by 2008, total sales of the bulbs in the United States would increase by 50 percent, saving Americans $3 billion in electricity costs and avoiding the need to build additional power plants for the equivalent of 450,000 new homes.

That would send shockwaves — some intended, others not — across the lighting industry. Because compact fluorescent bulbs last up to eight years, giant manufacturers, like General Electric and Osram Sylvania, would sell far fewer lights. Because the bulbs are made in Asia, some American manufacturing jobs could be lost. And because the bulbs contain mercury, there is a risk of pollution when millions of consumers throw them away.

Michael B. Petras, vice president of lighting at G.E., concedes that “the economics are better with incandescent bulbs.”

All that has only spurred Wal-Mart to redouble its efforts — and, in typical fashion, it is asking those who may be hurt by the change to help achieve it.

During an extraordinary meeting in Las Vegas in early October, competing bulb makers, academics, environmentalists and government officials met to ponder, at times uncomfortably, how Wal-Mart could sell more of the fluorescent lights.

The proposals discussed at what Wal-Mart dubbed the “light bulb summit” ranged from the practical (advertise the bulbs on the back of a Coke 12-pack) to the quixotic (create a tax on incandescent bulbs to make them more expensive).

Selling 100 million bulbs “is not a slam dunk by any stretch of the imagination,” Stephen Goldmacher, an executive at Royal Philips, the Dutch company that is one of the world’s largest light-bulb makers, told the group. “If this were easy, it would have happened already.”

The attendees did not need to look far for evidence. Wal-Mart had asked the owners of the Mirage Hotel and Casino, where the conference was held, to commit to using the

energy saving bulbs in its guest rooms in time for the meeting. The hotel politely declined.

It is not alone. Compact fluorescent bulbs, introduced in the United States with much fanfare in 1979 by Philips just as the nation’s second energy crisis of the decade was getting under way, have never captured the public imagination.

The new bulbs — lighted by sparking an efficient chemical reaction, rather than heating a metal filament — were ungainly, took several seconds to light up and often did not fit into traditional light fixtures.

Since then, refinements have made them far more convenient to use, reducing their size and price as well. But Wal-Mart sold only 40 million in 2005, compared with about 350 million incandescent bulbs, according to people briefed on the figures.

And it would have stayed that way unless Wal-Mart decided to go green. More than a year ago, Mr. Scott, the company’s chief executive, began reaching out to some of environmental groups, telling them that Wal-Mart, long regarded as an environmental offender, wanted to become a leader on issues like fuel efficiency and greenhouse gas emissions.

Mr. Scott viewed such a move as a way to use Wal-Mart’s influence to improve the environment, cut costs and, of course, burnish the company’s bruised image. In September 2005, Mr. Scott and Andy Ruben, Wal-Mart’s vice president for strategy and sustainability, drove 6,000 feet to the Mount Washington Observatory in New Hampshire with Steve Hamburg, an environmental studies professor at Brown University, and Fred Krupp, the president of the advocacy group Environmental Defense.

At the summit, where scientists measure climate change 24 hours a day, the men discussed global warming, acid rain, the hole in the ozone layer and what Wal-Mart could do about them.

“You need to look at what is being sold on the shelf,” Mr. Hamburg recalled telling Mr. Scott over a dinner of turkey and mashed potatoes. He began talking excitedly about compact fluorescent bulbs. “Very few products,” he said, “are such a clear winner” for consumers and the environment.

Soon after returning from the trip, Wal-Mart publicly embraced the bulbs with the zealotry of a convert. In meetings with suppliers, buyers for the chain laid out their plans: lower prices, expanding the shelf space dedicated to them and heavily promoting the technology.

Light-bulb manufacturers, who sell millions of incandescent lights at Wal-Mart, immediately expressed reservations. In a December 2005 meeting with executives from General Electric, Wal-Mart’s largest bulb supplier, “the message from G.E. was, ‘Don’t go too fast. We have all these plants that produce traditional bulbs,’ ” said one person involved with the issue, who spoke on condition of anonymity because of an agreement not to speak publicly about the negotiations.

The response from the Wal-Mart buyer was blunt, this person said. “We are going there,” the buyer said. “You decide if you are coming with us.”

In the end, as Wal-Mart suppliers generally do, the bulb makers decided to come with the company.

Philips, despite protests from packaging designers, agreed to change the name of its compact fluorescent bulbs from

“Marathon” to “energy saver.” To keep up with swelling orders from the chain, Osram Sylvania took to flying entire planeloads of compact fluorescent bulbs from Asia to the United States.

“When Wal-Mart sets its mind to something with a narrow objective like that, they are going to make it happen,” said Jim Jubb, vice president for consumer product sales at Sylvania.

At the same time that it pressured suppliers, Wal-Mart began testing ways to better market the bulbs. In the past, Wal-Mart had sold them on the bottom shelf of the lighting aisle, so that shoppers had to bend down. In tests that started in February, it gave the lights prime real estate at eye level. Sales soared.

To show customers how versatile the bulbs could be, Wal-Mart began displaying them inside the lamps and hanging fans for sale in its stores. Sales nudged up further.

To explain the benefits of the energy-efficient bulbs, the retailer placed an education display case at the end of the aisle, where it occupied four feet of valuable selling space — an extravagance at Wal-Mart. Sales climbed even higher.

In August 2006, the chain sold 3.94 million, nearly twice the 1.65 million it sold in August 2005, according to a person briefed on the numbers.

But to reach 100 million, Wal-Mart has to do much more — and that, executives concede, is where the biggest challenges rest. In the fall, the company began reaching out to competing retailers, Internet companies and even filmmakers.

The goal was to turn its sales campaign into a broader cultural movement.

One proposal, headed by Lawrence Bender, who produced Al Gore’s 2006 documentary, “An Inconvenient Truth,” is to create a Web site that would track sales of compact fluorescent bulbs at major retailers like Walgreen’s and Target. The result would be a real-time map, with data collected by a third party, showing how much Americans have saved by using the energy-efficient bulbs.

Mr. Ruben said such a map “helps consumers see this as something bigger than buying a bulb.”

At the same time, Google and Yahoo are in talks with Wal-Mart about how to use their search engines to promote the bulbs.

But Home Depot and Lowe’s balked at the idea of cooperating with their larger rival. “We don’t think we need an organization like that to sell more CFLs,” said Ron Jarvis, the vice president of environmental innovation at Home Depot, using the bulb’s industry nickname.

Then there is the mercury inside the bulbs, a problem Wal-Mart is working with the federal government and environmental groups to resolve, possibly by collecting the bulbs at its stores or off-site locations for recycling.

In the end, though, the biggest obstacle to overcome is America’s love affair with cheap, familiar-looking incandescent bulbs — a habit 130 years in the making.

For that to turn around, Wal-Mart will have to persuade its traditional consumers that it is worth paying a bit more at the checkout counter to save a significant amount money down the line, a seemingly simple task that few companies

ever accomplish. It is particularly difficult at a retailer that has long emphasized “always low prices.”

“It has taken the American public forever to grasp this,” said Charlie Jerabek, the chief executive of Sylvania.

Helen Capone encapsulates the challenge. Ms. Capone, 68, said she “curses the energy company every month” because of her electricity bill and loves the five-year-old, trouble-free compact fluorescent bulb in her attic. But she won’t switch to the energy-saving bulbs in the rest of her house in Secaucus, N.J. “They are not the prettiest things in the world,” she said, surveying the bulbs at a Wal-Mart.

That has put Wal-Mart in the strange position of racing ahead of its customers and coaxing them, bulb by bulb, toward energy conservation.

“We start with the premise,” Mr. Ruben, “that customers make good choices.”

THE ENERGY CHALLENGE

Travel Habits Must Change to Make a Big Difference in Energy Consumption

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By MATTHEW L. WALDPublished: December 30, 2006

WASHINGTON, Dec. 29 — The Environmental Protection Agency kicked off Energy Awareness Month in October with the slogan “change a light, change the world,” and encouraged Americans to buy compact fluorescent lights instead of conventional incandescent bulbs.

The Energy ChallengeArticles in this series are examining the ways in which the world is, and is not, moving toward a more energy efficient, environmentally benign future. Previous Articles in the Series »

Useful as that may be, picking a large sport utility vehicle that goes two miles farther on a gallon of gasoline than the least-efficient S.U.V.’s would have an impact on emissions of global warming gases about five times larger than replacing five 60-watt incandescent bulbs. The dollar savings would be about 10 times larger. And the more-efficient light bulbs would have a negligible effect on oil consumption.

Almost everything Americans do uses energy, making the earth warmer and purses thinner, and often raising demand for oil from unstable places. People eager to reduce their consumption can take many steps, but the size of their benefit — or cost — is not always evident.

The New York Times compared a number of such steps by three standards — reduction in global warming gases emitted, reduction in oil consumed and the dollar savings.

The calculations, shown in the accompanying chart, found that while choosing energy-efficient lighting and appliances makes a difference, changing how we travel would make by far the biggest difference.

Energy-saving light bulbs, the experts say, are relatively easy to adopt, and if everybody used them, the collective difference would be large. But they do not rival vehicles in potential savings.

Changing to a light bulb that gives three times as much light per watt of electricity means reducing energy use by cutting “a big share of a small thing,” said Lee Schipper, research director of the World Resources Institute, an environmental group. But picking a better vehicle, or using it less, is “a small share of a big thing.” And that has more potential, he said.

The larger the vehicle, the bigger difference even a small increase in fuel economy makes. For example, buying an S.U.V. with fuel economy rated at 16 miles per gallon instead of 14 — say a Chrysler Pacifica or a Buick Rendezvous, instead of a Chevrolet Tahoe or GMC Yukon — cuts oil consumption and reduces carbon dioxide emissions by three and a half times more than saving 2 miles per gallon in a typical car — going from, say, the 23 miles per gallon consumption of a V-6 Camry to the 25 miles per gallon of a Saturn Ion or a Honda Accord hybrid.

Of course, driving a car far more fuel-efficient than an S.U.V. saves the most of all. But many people will not consider such a vehicle, so they can help by picking a better model in the class they prefer.

Two miles per gallon may mean nothing more than picking a vehicle with the standard engine instead of the souped-up version, or picking the vehicle that has the best fuel economy in its size class.

The 16-mile-per-gallon models (as measured in road tests by Consumer Reports magazine) are very big S.U.V.’s, although not as large as the 14-mile-per-gallon models. Mr.

Schipper said it was a change “that your neighbors won’t notice. They won’t look down on you.”

There are lots of choices available beyond compromising on the size of an S.U.V. Some of the biggest also involve travel.

Commuting by train or bus, when that choice is available, will make the biggest difference. Consider the average round trip to work — 23 miles. In the average sedan, which gets 23 miles to the gallon, that is 250 gallons of gas a year and about 5,000 pounds of carbon dioxide emissions.

In cutting emissions of carbon dioxide, consumers can help by saving either gasoline or electricity. But as for cutting consumption of oil, saving electricity provides little help, because only 3 percent of electricity comes from burning oil.

That said, there are changes around the house that make a big difference. In many parts of the country, for example, heating a home for a winter takes about as much energy as running a car for a year. In a climate like Boston’s, replacing single-pane windows and storm windows with new thermal windows in a two-story, 2,000-square-foot house would save about 100 gallons of heating oil (about two-thirds as much oil as the switch to a 16-mile-per-gallon S.U.V). It would also reduce carbon dioxide production by more than 2,000 pounds. If the heating fuel is natural gas, the savings is about 1,600 pounds.

The next biggest energy user at home — again, depending on climate — is the air-conditioner. Replacing a 10-year-old air-conditioner with a new one would save about 871 pounds of carbon dioxide a year, although only a little more than a gallon of oil.

Even the most significant energy savings mentioned here are modest when compared with what it would take to limit global warming. Joseph J. Romm, an analyst at the Center for Energy and Climate Solutions and a head of the Energy Department’s efficiency and renewable energy program during the Clinton administration, said American carbon dioxide emissions come to about 44,000 pounds per person per year. Stabilizing the atmospheric concentration of carbon dioxide would require cutting that by 26,000 pounds to 35,000 pounds.

But the more modest goal set by the Kyoto Protocol, which would have required the United States to cut emissions by about 3,100 pounds per person annually, are well within reach.

Mr. Romm, the author of a new book about energy and climate change, “Hell and High Water,” said that eventually the world’s industries would have to switch to lower-carbon fuels, but before that time individuals and industries could take plenty of action. “You use efficiency to stop demand growth,” he said.

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THE ENERGY CHALLENGE

It’s Free, Plentiful and Fickle

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By MATTHEW L. WALDPublished: December 28, 2006

Correction Appended

Wind, almost everybody’s best hope for big supplies of clean, affordable electricity, is turning out to have complications.

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Emma Graham-Harrison/Reuters

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Coal being loaded near Fairfield, Tex. Electricity from coal is cheaper than from wind if the environmental and health costs are not factored in.

Engineers have cut the price of electricity derived from wind by about 80 percent in the last 20 years, setting up this renewable technology for a major share of the electricity market. But for all its promise, wind also generates a big problem: because it is unpredictable and often fails to blow when electricity is most needed, wind is not reliable enough to assure supplies for an electric grid that must be prepared to deliver power to everybody who wants it — even when it is in greatest demand.

In Texas, as in many other parts of the country, power companies are scrambling to build generating stations to meet growing peak demands, generally driven by air-conditioning for new homes and businesses. But power plants that run on coal or gas must “be built along with every megawatt of wind capacity,” said William Bojorquez, director of system planning at the Electric Reliability Council of Texas.

The reason is that in Texas, and most of the United States, the hottest days are the least windy. As a result, wind turns out to be a good way to save fuel, but not a good way to avoid building plants that burn coal. A wind machine is a bit like a bicycle that a commuter keeps in the garage for sunny days. It saves gasoline, but the commuter has to own a car anyway.

Xcel Energy, which serves eight states from North Dakota to Texas and says it is the nation’s largest retailer of wind energy, is eager to have more. Wind is “abundant and popular,” said Richard C. Kelly, the chairman, president and chief executive, speaking at a recent conference on renewable energy.

But Frank P. Prager, managing director of environmental policy at the company, said that the higher the reliance on wind, the more an electricity transmission grid would need to keep conventional generators on standby — generally low-efficiency plants that run on natural gas and can be started and stopped quickly.

He said that in one of the states the company serves, Colorado, planners calculate that if wind machines reach 20 percent of total generating capacity, the cost of standby generators will reach $8 a megawatt-hour of wind. That is on top of a generating cost of $50 or $60 a megawatt-hour, after including a federal tax credit of $18 a megawatt-hour.

By contrast, electricity from a new coal plant currently costs in the range of $33 to $41 a megawatt-hour, according to experts. That price, however, would rise if the carbon dioxide produced in burning coal were taxed, a distinct possibility over the life of a new coal plant. (A megawatt-hour is the amount of power that a large hospital or a Super Wal-Mart would use in an hour.)

Without major advances in ways to store large quantities of electricity or big changes in the way regional power grids are organized, wind may run up against its practical limits sooner than expected.

At a recent discussion of clean energy technologies held at General Electric’s research center in Niskayuna, N.Y, Dan W. Reicher, a former assistant secretary of energy for

conservation and renewable energy, predicted that renewables, led by wind, could reach 20 percent of demand in the next decade or two. President Bush has also said that wind could supply 20 percent of the nation’s electricity.

But Mr. Reicher drew a quick response from James E. Rogers, chief executive of Duke Energy, one of the nation’s largest utilities, and chairman of the Edison Electric Institute, the industry’s trade association. “I love his optimism,” Mr. Rogers said. “But unfortunately, I have to deliver electricity every day.”

Mr. Rogers said that wind and another big renewable source that is available only when nature cooperates, solar power, will be necessary because the government would eventually regulate carbon emissions from coal-fired power plants. He later said that his reply to Mr. Reicher had been a “cheap shot,” but he and others are still wondering how much wind the nation can absorb.

General Electric, a major maker of wind machines, says that along with lowering the price for a megawatt-hour, engineers have made other improvements in wind machines. With better electronic controls, many of them now help stabilize voltage on the grid, and have been cured of their tendency to shut off when detecting a voltage fluctuation, a problem that can escalate into a blackout.

Juan de Bedout, manager of the electric power and propulsion systems lab at G.E., said this was more important now because wind machines had grown from a few hundred kilowatts to 1.5 megawatts, and his company was exploring machines four times bigger than that. “That’s ginormous,” he said.

In many places, wind tends to blow best on winter nights, when demand is low. When it is available, power from wind

always displaces the most expensive power plant in use at that moment. If wind blew in summer, it would displace expensive natural gas. But in periods of low demand, it is displacing cheap coal.

And in places where suppliers enter bids each day to supply power on the next day, on an hour-by-hour basis, wind is at a disadvantage. Wider use of wind requires the invention of a new kind of weather forecasting, according to the Electric Power Research Institute, a nonprofit consortium based in Palo Alto, Calif., sponsored by the utility industry and its suppliers. Rather than forecasting from temperature or rainfall, what is needed is a focus on almost minute-by-minute predictions of wind in small areas where the turbines are.

The economics of wind would change radically if the carbon dioxide emitted by coal were assigned a cash value, but in the United States it has none. Coal plants produce about a ton of carbon dioxide each megawatt hour, on average, so a price of $10 a ton would have a major impact on utility economics.

Another possibility is energy storage, although this presents other difficulties.

In May, Xcel and the Energy Department announced a research program to use surplus, off-peak electricity from wind to split water molecules into hydrogen and oxygen. The hydrogen could be burned or run through a fuel cell to make electricity when it was needed most. Xcel plans to invest $1.25 million, and the government $750,000. But storage imposes a high cost: about half the energy put into the system is lost.

The Electric Power Research Institute said that existing hydroelectric dams could be used as storage; they can

increase and decrease their generation quickly, and each watt generated in a wind machine means water need not be run through the dam’s turbines; it can be kept in storage, ready for use later, when it is most needed.

The institute listed another possibility, still in the exploratory stage: using surplus electricity made from wind to pump air, under pressure, into underground caverns. At peak hours, the compressed air could be withdrawn and injected into generators fired by natural gas. Natural-gas turbines usually compress their own air; compression from wind would cut gas consumption by 40 percent, the institute said.

That would help with an important goal, reducing consumption of natural gas, which is increasingly scarce and costly in North America. But not everyone is so sanguine that wind will do that.

Paul Wilkinson, vice president for policy analysis at the American Gas Association, the trade group for the utilities that deliver natural gas, said that wind, while helpful in making more gas available for home heating and industrial use, would still need a gas generator to back it up. And the units used as backup are generally chosen for low purchase price, not efficient use of fuel.

At the American Wind Energy Association, Robert E. Gramlich, the policy director, said that one solution would be to organize control of the electric grid into bigger geographic areas, so that a drop-off in wind in one place would be balanced by an increase somewhere else, reducing the need for conventional backup. That is among several changes the wind industry would like in the electric system; another is easier construction of new power lines, because

many of the best wind sites are in prairies or mountain ranges far from where the electricity is needed.

A problem for new power lines is that they would be fully loaded for only some of the year, since the amount of energy that the average wind turbine produces over 12 months is equal to just 30 to 40 percent of the amount that would result from year-round operation at capacity. That number runs closer to 90 percent at a nuclear or coal plant.

Thus a 1,000-megawatt nuclear plant will produce nearly three times as much electricity as 1,000 megawatts of wind turbines. But operating costs at the wind farm are lower, and the fuel is, of course, free.

Correction: December 29, 2006

An article in Business Day yesterday about the difficulties of relying on the wind to provide electricity included an outdated reference to the company led by James E. Rogers, who expressed some concern about wind energy. It is Duke Energy, not Cinergy, which was acquired by Duke. The article also misstated the size of the wind turbines produced by General Electric. They are 1.5 megawatts, not gigawatts.

Outsize Profits, and Questions, in Effort to Cut Warming Gases

Quilai Shen for The New York Times

The view from a dirt road near a chemical plant in Quzhou, China, provides a sense of how severe pollution is becoming as the nation industrializes.

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By KEITH BRADSHERPublished: December 21, 2006

QUZHOU, China — Foreign businesses have embraced an obscure United Nations-backed program as a favored approach to limiting global warming. But the early efforts have revealed some hidden problems.

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Emissions from a factory in Qu- zhou match those of a million cars.

Under the program, businesses in wealthier nations of Europe and in Japan help pay to reduce pollution in poorer ones as a way of staying within government limits for emitting climate-changing gases like carbon dioxide, as part of the Kyoto Protocol.

Among their targets is a large rusting chemical factory here in southeastern China. Its emissions of just one waste gas contribute as much to global warming each year as the emissions from a million American cars, each driven 12,000 miles.

Cleaning up this factory will require an incinerator that costs $5 million — far less than the cost of cleaning up so many cars, or other sources of pollution in Europe and Japan.

Yet the foreign companies will pay roughly $500 million for the incinerator — 100 times what it cost. The high price is set in a European-based market in carbon dioxide emissions. Because the waste gas has a far more powerful effect on global warming than carbon dioxide emissions, the foreign businesses must pay a premium far beyond the cost of the actual cleanup.

The huge profits from that will be divided by the chemical factory’s owners, a Chinese government energy fund, and the consultants and bankers who put together the deal from a mansion in the wealthy Mayfair district of London.

Arrangements like this still make sense to the foreign companies financing them because they are a lot less expensive, despite the large profit for others, than cleaning up their own operations.

Such efforts are being watched in the United States as an alternative more politically attractive than imposing taxes on fossil fuels like coal and oil that emit global-warming gases when burned.

But critics of the fast-growing program, through which European and Japanese companies are paying roughly $3 billion for credits this year, complain that it mostly enriches a few bankers, consultants and factory owners.

With so much money flowing to a few particularly lucrative cleanup deals, the danger is that they will distract attention from the broader effort to curb global warming gases, and that the lure of quick profit will encourage short-term fixes

at the expense of fundamental, long-run solutions, including developing renewable energy sources like solar power.

As word of deals like this has spread, everyone involved in the nascent business is searching for other such potential jackpots in developing countries.

As for more modest deals, like small wind farms, “if you don’t have a humongous margin, it’s not worth it,” said Pedro Moura Costa, chief operating officer of EcoSecurities, an emissions-trading company in Oxford, England.

The financing of the chemical factory’s incinerator here and other deals like it are now drawing unfavorable attention. Canada’s environment minister, Rona Ambrose, announced in October that her government would withdraw from the trading program.

“There is a lot of evidence now about the lack of accountability around these kinds of projects,” she said.

Another concern is that the program can have unintended results. The waste gas to be incinerated here is emitted during the production of a refrigerant that will soon be banned in the United States and other industrial nations because it depletes the ozone layer that protects the earth from ultraviolet rays.

Handsome payments to clean up the waste gas have helped chemical companies to expand existing factories that make the old refrigerant and even build new factories, said Michael Wara, a carbon-trading lawyer at Holland & Knight in San Francisco.

Moreover, air-conditioners using this Freon-like refrigerant are much less efficient users of electricity than newer models. The expansion of large middle classes in India and

China has led to soaring sales of cheap, inefficient air-conditioners, along with the building of coal-fired plants to power them, further contributing to global warming and the depletion of the ozone layer.

The program is at the forefront of efforts to address the most intractable problem in climate change: how to limit soaring emissions from the largest developing countries. Sometime in 2009, China’s total emissions of carbon dioxide, the most important global warming gas, are expected to surpass those from the United States, according to the International Energy Agency.

While the challenge of addressing global warming is daunting, so are the consequences of inaction. Scientists warn that rising concentrations of carbon dioxide and other global warming gases could result in more severe storms, wide crop failures, the spread of tropical diseases and rising sea levels endangering some coastal cities.

Programs like the one the United Nations supports are increasingly common in Europe. In general, they allow companies to buy rights on the market to exceed their limits on global warming gases from other companies prepared to reduce emissions elsewhere at a lower cost. Many economists consider emissions-trading systems, which are driving participants to the cheapest cleanups with the biggest impact, as the most efficient way to address pollution.

But a study commissioned by the world organization has found that the profits are enormous in destroying trifluoromethane, or HFC-23, a very potent greenhouse gas that is produced at the factory here and several dozen other plants in developing countries. The study calculated that industrial nations could pay $800 million a year to buy

credits, even though the cost of building and operating incinerators will be only $31 million a year.

The situation has set in motion a diplomatic struggle pitting China, the biggest beneficiary from payments, against advanced industrial nations, particularly in Europe. At a global climate conference in Nairobi, Kenya, in November, European delegates suggested that in the case of Freon factories now under construction in developing countries, any payments for the incineration of the waste gas should go only into an international fund to help factories retool for the production of more modern refrigerants that do not deplete the ozone layer.

But the Chinese government blocked the initiative, insisting that money for Chinese factories go into the government’s own clean energy fund. Negotiators ended up setting up a group to study the issue.

Even as hundreds of millions of dollars from the program are devoted to the refrigerant industry, countries in sub-Saharan Africa, which were originally envisioned as big beneficiaries of emissions trading, are receiving almost nothing. Just four nations — China, India, Brazil and South Korea — are collecting four-fifths of the payments under the program, with China alone collecting almost half.

Two-thirds of the payments are going to projects to eliminate HFC-23.

Those payments also illustrate conflicting goals under Kyoto and the Montreal Protocol, a 1987 agreement that requires the phasing out of ozone-depleting substances. The problem is that the trading program backed by the United Nations, known as the Clean Development Mechanism, is helping support an industry that another international organization is trying to phase out.

And while ozone depletion is a separate problem from global warming, some gases, like HFC-23, make both worse. The separate secretariats under the protocols have little legal authority to resolve this quandary.

“It’s tricky in that we don’t have a mechanism other than the Security Council, and who cares there about HFC’s?” said Janos Pasztor, the acting coordinator of the organization that oversees the program.

In the end, officials say, there should be more projects aimed at providing renewable energy and sustainable economic development for the world’s poorest people.

“If people only do HFC-23 projects, then they miss the whole idea,” Mr. Pasztor said.

Richard Rosenzweig, chief operating officer of Natsource, a company in Washington arranging emissions deals between poor and rich countries, said it was not fair to look only at incineration costs and compare them with the size of payments from industrial nations. The administrative costs of the program are high, he said, and at least disposal of the waste gas is taking place.

If the world tried to reduce emissions through an outright ban or regulation alone, as many environmentalists recommend, it might not happen at all, he said. The United Nations-favored program may have flaws, he added, but “it’s a pilot phase — this is a 100-year problem.”

Environmental groups say that governments in developing countries should either require factories to incinerate the waste gas as a cost of doing business, or receive aid from wealthier countries to cover the relatively modest cost of incinerators.

“Couldn’t we pay for the cost, or even twice the cost, of abatement and spend the rest of the money in better ways?” Mr. Wara asked.

DuPont produces HFC-23 as part of its output of Teflon, but has routinely burned the colorless, odorless waste gas without compensation for many years, even though it is not required by law to do so, a DuPont spokeswoman said.

The secretariat of the Clean Development Mechanism estimates that a ton of HFC-23 in the atmosphere has the same effect as 11,700 tons of carbon dioxide. James Cameron, the vice chairman of Climate Change Capital, which organized the chemical factory deal here, said there were considerable costs and risks in setting up plans that required elaborate certification by consultants, acceptance by developing-country governments and approval by a United Nations secretariat.

For small projects involving less than $250,000 worth of credits, fees for deal makers, consultants and lawyers can far exceed the cost of installing equipment to clean up emissions.

Even the Chinese government, the main seller of carbon credits and a defender of the program, is expressing some misgivings.

“We do not encourage more HFC projects,” a statement by Lu Xuedu, deputy director of the Office of Global Environment Affairs at the Ministry of Science and Technology, said. “We would prefer to have more energy efficiency and renewable-energy projects that could help alleviate poverty in the countryside.”

But for now, the projects involving industrial gases like HFC-23 are where most of the action is.

“You can do those quickly,” Mr. Rosenzweig of Natsource said, “and it’s worth the investment.”

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THE ENERGY CHALLENGE

The Cost of an Overheated Planet

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By STEVE LOHRPublished: December 12, 2006

The iconic culprit in global warming is the coal-fired power plant. It burns the dirtiest, most carbon-laden of fuels, and its smokestacks belch millions of tons of carbon dioxide, the main global warming gas.

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The Energy ChallengeFossil Fuel Economics Articles in this series are examining the ways in which the world is, and is not, moving toward a more energy efficient, environmentally benign future.Previous Articles in the Series » Related LinksClimate Change Science Project (pdf)"Alternatives to Kyoto: the Case for a Carbon Tax" by Richard N. Cooper of Harvard University (pdf)Report on Economics of Climate Change Sponsored by the British Government (pdf)Report From the National Commission on Energy Policy (pdf)Duke Energy's Views on Climate Change and Policy

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James E. Rogers, chief executive of Duke Energy and chairman of a leading utility trade group, at an electrical substation in Charlotte, N.C.

So it is something of a surprise that James E. Rogers, chief executive of Duke Energy, a coal-burning utility in the Midwest and the Southeast, has emerged as an unexpected advocate of federal regulation that would for the first time

impose a cost for emitting carbon dioxide. But he has his reasons.

“Climate change is real, and we clearly believe we are on a route to mandatory controls on carbon dioxide,” Mr. Rogers said. “And we need to start now because the longer we wait, the more difficult and expensive this is going to be.”

Global warming is not only an environmental hazard, but also a great challenge for economic policy. Without economic incentives, analysts say, the needed investments in industrial cleanup, innovative low-carbon technologies, fuel-efficient cars and other ways of reducing energy waste will not occur.

Mr. Rogers’s stance is far from universal within the power industry, but it has surprising support, particularly from those, like him, who also produce electricity from carbon-free nuclear reactors.

And despite the Bush administration’s adamant opposition to any limits on fossil fuel emissions, the idea is beginning to pick up momentum in the American political arena as well. Already, California has adopted a policy aimed at reducing the state’s contribution to global warming by 25 percent in the next 14 years.

In Washington, several influential lawmakers, including Senator John McCain, a leading Republican contender for president in 2008, have introduced legislation intended to limit the nation’s carbon dioxide output.

But how would those goals be achieved? Global warming can be seen as a classic “market failure,” and many economists, environmental experts and policy makers agree that the single largest cause of that failure is that in most of

the world, there is no price placed on spewing carbon dioxide into the atmosphere.

Yet it is increasingly clear that there is a considerable cost to carbon dioxide emissions, especially to future generations, as climate specialists warn of declines in farm output in poor tropical countries, fiercer hurricanes and coastal floods that could make many people refugees.

Price List for Polluting

“Setting a real price on carbon emissions is the single most important policy step to take,” said Robert N. Stavins, director of the environmental economics program at Harvard University. “Pricing is the way you get both the short-term gains through efficiency and the longer-term gains from investments in research and switching to cleaner fuels.”

Some academics see an analogy between a global warming policy and the pursuit of national security in the cold war. In the late 1950s, American military spending reached as high as 10 percent of the gross domestic product and averaged about 4 percent, far higher than in any previous peacetime era. A Soviet nuclear attack was a danger but hardly a certainty, just as the predicted catastrophes from global warming are threats but not certainties.

“The issues are similar in that you pay now so things are less risky in the future — it’s an insurance policy,” said Richard Cooper, a Harvard economist. “And in the cold war, we taxed ourselves fairly highly to mitigate that threat.”

What makes such a view more than a conceptual argument is that executives like Mr. Rogers, who is also chairman of the Edison Electric Institute, a utility trade group whose members provide 60 percent of the nation’s electric power,

are also pushing for a carbon dioxide-pricing policy to reduce the risk to their companies.

They say that only with some sort of federal policy in place — which would probably take the form of a tax on carbon dioxide waste from any source, or a “cap and trade” regulatory system — will it become clear what carbon cleanup or fuel-switching moves their companies may have to make, and on what sort of timetable.

Investors in alternative energy projects also emphasize the need to set policy priorities.

“We need a policy framework for the long term,” said Vinod Khosla, a leading environment-oriented venture capitalist. “Fifteen years is the minimum horizon of stability that we need.”

Beyond incentives for business, a national global warming policy should include increased federal spending on research on futuristic technologies to curb carbon emissions, advocates say.

Combating global warming, they say, will require over-the-horizon breakthroughs involving safe nuclear energy, hydrogen power and advanced carbon sequestration — or technologies that have not yet been imagined.

But even today, there are sizable opportunities, by insisting on more efficient energy use, that are not being seized, according to the McKinsey Global Institute. In a new report, the institute, a business-oriented research group that is part of McKinsey & Company consultants, estimated that the yearly growth in worldwide energy demand could be cut by more than half through 2020 — to an annual rate of 0.6 percent from a forecast 2.2 percent, using current technology alone.

Available steps that would yield a more productive, and efficient, use of energy include compact fluorescent lighting, improved insulation on new buildings, reduced standby power requirements and an accelerated push for appliance-efficiency standards.

All these moves, McKinsey said, would save money for consumers and businesses. “We were really surprised by these huge straightforward opportunities that are not being taken,” said Diana Farrell, the McKinsey Global Institute’s director. “In some senses, there is a big market failure.”

Energy efficiency can help slow the pace at which the risk from global warming risk increases, but it cannot reverse the trend alone. In the very long term, environmental experts say, the world’s economy needs a technological transformation, from deriving 90 percent of its energy from fossil fuels today to being largely free of emissions from fossil fuels by 2100, through cleanup steps or alternative energy sources.

Science and Uncertainty

Given all the uncertainties, the scientists and economists who design and run simulations of global warming policy acknowledge that their work is at best a tool for thinking about climate change issues.

Still, they tend to agree that over the next 50 years, the cost of slowing and eventually reversing carbon emissions growth will be 1 to 2 percent of global economic output. They assume the focus over those years will be mainly on efficiency and cleaning up electricity generation.

In later years, their cost projections become more varied, ranging from 1 percent to as high as 16 percent of global output, depending on assumptions about how difficult it will

be to wean the world’s vehicle fleet from fossil fuels, and to make other technological leaps.

“Going past 2050, the cleverness really has to kick in,” said John M. Reilly, an economist at the M.I.T. Joint Program on the Science and Policy of Global Change.

A global warming policy would be shaped first by science and social values, before economics. A sensible goal, according to many environmental specialists, is to try to avert a doubling or more of atmospheric concentrations of carbon dioxide in this century.

“This is not something that goes on inside a computer, but a grand political calculation,” said Stephen H. Schneider, a climate expert at Stanford University.

Yet even in realms of social policy, where uncertainty is high, there is an implicit calculation of costs and benefits. In the case of global warming, the cost of society’s insurance policy may well be worth it, measured in the damage averted.

But it will not be cheap. Take the experts’ consensus estimate that curbing carbon dioxide emissions over the next 50 years will, on average, cost about 1 percent of global economic activity annually.

It seems a modest figure. Yet in today’s terms, 1 percent of the United States economy is more than $120 billion a year, or $400 a person.

Put another way, $120 billion is about equal to the Bush administration’s tax cuts in 2001; it is also roughly the amount spent on the Iraq and Afghanistan wars this year.

“There’s no easy way around the fact that if global warming is a serious risk, there will be serious costs,” said W. David Montgomery, an economist at Charles River Associates, a consulting group.

A price on carbon dioxide emissions, most economists agree, would be the most efficient way to combat global warming. And the price, they say, should start small to give industries time to adapt, then ratchet up over the years to encourage long-term investments in energy saving, carbon cleanup and new technology.

The two methods of pricing carbon are to charge a tax on each ton of carbon dioxide emitted into the air, or to place a cap on total emissions and then let polluters trade permits to emit a ton of carbon dioxide.

Economists like William D. Nordhaus of Yale and Mr. Cooper of Harvard advocate a tax as the clearest price signal to the energy marketplace, and less susceptible to political tampering and market manipulation than a cap-and-trade system. It could also be used to raise revenue to offset other taxes.

In a recent paper, Mr. Cooper suggested an initial tax around $14 a ton of carbon dioxide emitted, which he calculated would translate roughly into a 100 percent tax on coal and add 12 cents to each gallon of gasoline. Such a tax would raise as much as $80 billion a year in the United States.

“There’s nothing sacred about the number,” he said, “but you need to get a significant price into the system to create the incentive for people to go out and look for solutions.”

A Quota or a Tax?

Economically, a cap-and-trade system has the same goal as a tax, putting a price on carbon dioxide emissions, but goes about it differently. A limit would be placed on overall emissions, with polluters allocated permits. Then, companies able to go below their emission targets would be allowed to sell their unused “permits to pollute” to companies that could not.

A cap-and-trade system also has some political advantages. It can deflect the anger over higher costs and enable governments to use their allocations to essentially buy political support, since permits are the equivalent of cash. Big polluters, who will have to invest most to clean up, could be granted extra allowances in the early years of the program to subsidize their investments.

In the United States, caps and trading have a record of success in combating acid rain, which is caused by sulfur dioxide emissions from fossil fuel power plants.

“People said it was a crazy idea, too complicated and too regulatory,” said Richard L. Schmalensee, an M.I.T. economist who was an economic adviser to the first President Bush when the sulfur emissions program was designed. “But the lesson learned was that a cap-and-trade system can work.”

The global warming legislative proposals before Congress — including one sponsored by Senator McCain and Senator Joseph I. Lieberman of Connecticut, and another by Senator Jeff Bingaman of New Mexico — envision cap-and-trade systems.

But the challenge of controlling carbon emissions is far greater than sulfur. Carbon dioxide is a pervasive byproduct of the economy, and the polluters are many and varied.

Once emitted, carbon dioxide is vexingly long-lived in the environment.

The early struggles of the European Union’s carbon emission trading system, set up last year, point to the administrative and political difficulties. The European governments, responding to lobbying by domestic businesses, handed out permits that exceeded the emissions that most companies were already putting into the air. When that became clear in April, the market price of carbon dioxide emissions fell by half.

Senator Barbara Boxer of California, who will soon take the chair of the Senate environment committee, has pledged to push Congress to impose a price on carbon dioxide emissions, as the Europeans have done.

Yet without coordinated international action, even if the United States — the largest source of carbon emissions — reined them in, this would have only limited effect on global warming. China is on track to surpass the United States as the leading emitter of carbon dioxide by 2009, according to a recent report by the International Energy Agency.

“Unless China and India are brought in, it won’t matter much what the developed world does,” said Scott Barrett, a professor of environmental economics at the School of Advanced International Studies of Johns Hopkins University.

But developing nations like China and India, energy specialists say, would certainly avoid joining any international effort on global warming without an emphatic move by the United States.

“Every year we delay, we contribute to another year of delay in China, India and elsewhere,” said Jason S. Grumet, executive director of the National Commission on Energy

Policy, a bipartisan group of energy experts. “The ecological and economic imperative is to start now.”

THE NATION

A Terrible Thing to Waste. Or Try This.

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By JEREMY W. PETERSPublished: December 10, 2006

ENERGY conservation has been linked with more than its fair share of ambitious causes: preserving American liberty

and saving humanity, for starters

DEUTSCH “We wanted to shake people up and let them know this is a grave situation,” said Bryan Black, an executive vice president with Deutsch in New York. In addition to the print ad, his firm proposed a mock magazine that would be aimed at readers who live in a polluted future. Related

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KIRSHENBAUM BOND & PARTNERS “America, to be truly free in the world, needs to be dependent on itself and not on foreign oil,” said Lance Ferguson, associate creative director with Kirshenbaum Bond & Partners in New York. The slogan is meant to tap into both national pride and feelings of vulnerability.

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ANOMALY “This is really more to be symbolic, but it has some practical application as well,” said Johnny Vulkan, a partner with Anomaly in New York. His firm proposed a campaign that would include these signs and temporarily lower the speed limit to 54 m.p.h. to demonstrate how a relatively modest effort could produce significant results.

If ever an issue was ripe for one of those ubiquitous, can’t-get-it-out-of-your-head public service slogans, one would think that this is it.

But advertisers and the federal government aren’t rushing to produce a public service campaign along the lines of “Only you can prevent forest fires” and “This is your brain

on drugs,” which have become part of the national consciousness. The New York Times enlisted three advertising agencies known for their creative flair to take a shot.

The assignment was to imagine that the Ad Council, the nonprofit organization behind some of the most memorable public service announcements, has asked them to create the definitive campaign to promote energy conservation.

Creating any P.S.A. is a chore, ad executives said, because the goal is getting people to alter everyday behavior.

“To compel people to change their behavior, we need to help them decide what’s at stake is worth changing their lifestyle for,” said Gail Barlow, creative director with Kirshenbaum Bond & Partners, an advertising agency in New York. “You need to identify something that people hold dearly.”

Is that their pocketbooks? Drinking water? Security?

The White House has said that the nation’s “addiction” to oil threatens its ability to compete in the global economy. “We are too dependent on oil,” President Bush said recently.

Experience shows that even if faced with the loss of something they say they hold dear, it is hard to sway many Americans because they don’t see the need to change.

Vice President Dick Cheney, the former chief executive of an oil-services company, famously dismissed conservation as a “personal virtue” in 2001. Senator James M. Inhofe, Republican of Oklahoma and chairman of the Senate Environment and Public Works Committee until control shifts to the Democrats, has called global warming “the greatest hoax ever perpetrated on the American people.” In

a committee hearing last week, he said that global warming was exaggerated by “advocates for alarmism.”

Here are the efforts of three advertisers, two of whom said unabashedly that they have no problem with alarmism.

THE ENERGY CHALLENGE

Budgets Falling in Race to Fight Global Warming

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By ANDREW C. REVKINPublished: October 30, 2006

DENVER — Cheers fit for a revival meeting swept a hotel ballroom as 1,800 entrepreneurs and experts watched a PowerPoint presentation of the most promising technologies for limiting global warming: solar power, wind, ethanol and other farmed fuels, energy-efficient buildings and fuel-sipping cars.

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Graphic Declining Investment in Energy R&D

“Houston,” Charles F. Kutscher, chairman of the Solar 2006 conference, concluded in a twist on the line from the movie “Apollo 13,” “we have a solution.”

Hold the applause. For all the enthusiasm about alternatives to coal and oil, the challenge of limiting emissions of carbon dioxide, which traps heat, will be immense in a world likely to add 2.5 billion people by midcentury, a host of other experts say. Moreover, most of those people will live in countries like China and India, which are just beginning to enjoy an electrified, air-conditioned mobile society.

The challenge is all the more daunting because research into energy technologies by both government and industry has not been rising, but rather falling.

In the United States, annual federal spending for all energy research and development — not just the research aimed at climate-friendly technologies — is less than half what it was a quarter-century ago. It has sunk to $3 billion a year in the current budget from an inflation-adjusted peak of $7.7 billion in 1979, according to several different studies.

Britain, for one, has sounded a loud alarm about the need for prompt action on the climate issue, including more research. [A report commissioned by the British government and scheduled to be released today calls for spending to be doubled worldwide on research into low-carbon technologies; without it, the report says, coastal flooding and a shortage of drinking water could turn 200 million people into refugees.]

President Bush has sought an increase to $4.2 billion for 2007, but that would still be a small fraction of what most climate and energy experts say would be needed.

Federal spending on medical research, by contrast, has nearly quadrupled, to $28 billion annually, since 1979. Military research has increased 260 percent, and at more than $75 billion a year is 20 times the amount spent on energy research.

Internationally, government energy research trends are little different from those in the United States. Japan is the only economic power that increased research spending in recent decades, with growth focused on efficiency and solar technology, according to the International Energy Agency.

In the private sector, studies show that energy companies have a long tradition of eschewing long-term technology quests because of the lack of short-term payoffs.

Still, more than four dozen scientists, economists, engineers and entrepreneurs interviewed by The New York Times said that unless the search for abundant non-polluting energy sources and systems became far more aggressive, the world would probably face dangerous warming and international strife as nations with growing energy demands compete for increasingly inadequate resources.

Most of these experts also say existing energy alternatives and improvements in energy efficiency are simply not enough.

“We cannot come close to stabilizing temperatures” unless humans, by the end of the century, stop adding more CO2 to the atmosphere than it can absorb, said W. David Montgomery of Charles River Associates, a consulting group, “and that will be an economic impossibility without a major R.& D. investment.”

A sustained push is needed not just to refine, test and deploy known low-carbon technologies, but also to find “energy technologies that don’t have a name yet,” said James A. Edmonds, a chief scientist at the Joint Global Change Research Institute of the University of Maryland and the Energy Department.

At the same time, many energy experts and economists agree on another daunting point: To make any resulting “alternative” energy options the new norm will require attaching a significant cost to the carbon emissions from coal, oil and gas.

“A price incentive stirs people to look at a thousand different things,’ ” said Henry D. Jacoby, a climate and energy expert at the Massachusetts Institute of Technology.

For now, a carbon cap or tax is opposed by President Bush, most American lawmakers and many industries. And there are scant signs of consensus on a long-term successor to the Kyoto Protocol, the first treaty obligating participating industrial countries to cut warming emissions. (The United States has not ratified the pact.)

The next round of talks on Kyoto and an underlying voluntary treaty will take place next month in Nairobi, Kenya.

Environmental campaigners, focused on promptly establishing binding limits on emissions of heat-trapping gases, have tended to play down the need for big investments seeking energy breakthroughs. At the end of “An Inconvenient Truth,” former Vice President Al Gore’s documentary film on climate change, he concluded: “We already know everything we need to know to effectively address this problem.”

While applauding Mr. Gore’s enthusiasm, many energy experts said this stance was counterproductive because there was no way, given global growth in energy demand, that existing technology could avert a doubling or more of atmospheric concentrations of carbon dioxide in this century.

Mr. Gore has since adjusted his stance, saying existing technology is sufficient to start on the path to a stable climate.

Other researchers say the chances of success are so low, unless something breaks the societal impasse, that any

technology quest should also include work on increasing the resilience to climate extremes — through actions like developing more drought-tolerant crops — as well as last-ditch climate fixes, like testing ways to block some incoming sunlight to counter warming.

Without big reductions in emissions, the midrange projections of most scenarios envision a rise of 4 degrees or so in this century, four times the warming in the last 100 years. That could, among other effects, produce a disruptive mix of intensified flooding and withering droughts in the world’s prime agricultural regions.

Sir Nicholas Stern, the chief of Britain’s economic service and author of the new government report on climate options, has summarized the cumulative nature of the threat succinctly: “The sting is in the tail.”

The Carbon Dioxide Problem

Many factors intersect to make the prompt addressing of global warming very difficult, experts say.

A central hurdle is that carbon dioxide accumulates in the atmosphere like unpaid credit card debt as long as emissions exceed the rate at which the gas is naturally removed from the atmosphere by the oceans and plants. But the technologies producing the emissions evolve slowly.

A typical new coal-fired power plant, one of the largest sources of emissions, is expected to operate for many decades. About one large coal-burning plant is being commissioned a week, mostly in China.

“We’ve got a $12 trillion capital investment in the world energy economy and a turnover time of 30 to 40 years,” said John P. Holdren, a physicist and climate expert at Harvard

University and president of the American Association for the Advancement of Science. “If you want it to look different in 30 or 40 years, you’d better start now.”

Many experts say this means the only way to affordably speed the transition to low-emissions energy is with advances in technologies at all stages of maturity.

Examples include:

¶ Substantially improving the efficiency and cost of solar panels;

¶ Conducting full-scale tests of systems for capturing carbon dioxide from power plants and pumping it underground;

¶ Seeking efficient ways to generate fuels from crops;

¶ Finding new ways to store vast amounts of energy harvested intermittently from the wind and sun.

Carbon dioxide levels will stabilize only if each generation persists in developing and deploying alternatives to unfettered fossil-fuel emissions, said Robert H. Socolow, a physicist and co-director of a Princeton “carbon mitigation initiative” created with $20 million from BP and Ford Motor.

The most immediate gains could come simply by increasing energy efficiency. If efficiency gains in transportation, buildings, power transmission and other areas were doubled from the longstanding rate of 1 percent per year to 2 percent, Dr. Holdren wrote in the M.I.T. journal Innovations earlier this year, that could hold the amount of new nonpolluting energy required by 2100 to the amount derived from fossil fuels in 2000 —a huge challenge, but not impossible.

Another area requiring immediate intensified work, Dr. Holdren and other experts say, is large-scale demonstration of systems for capturing carbon dioxide from coal burning before too many old-style plants are built.

All of the components for capturing carbon dioxide and disposing of it underground are already in use, particularly in oil fields, where pressurized carbon dioxide is used to drive the last dregs of oil from the ground.

In this area, said David Keith, an energy expert at the University of Calgary, “We just need to build the damn things on a billion-dollar scale.”

In the United States, the biggest effort along these lines is the 285-megawatt Futuregen power plant planned by the Energy Department, along with private and international partners, that was announced in 2003 by President Bush and is scheduled to be built in either Illinois or Texas by 2012. James L. Connaughton, the chairman of the White House Council on Environmental Quality, said the Bush administration was making this a high priority.

“We share the view that a significantly more aggressive agenda on carbon capture and storage and zero-pollution coal is necessary,” he said, adding that the administration has raised annual spending on storage options “from essentially zero to over $70 million.”

Europe is pursuing a suite of such plants, including one in China, but also well behind the necessary pace, several experts said.

Even within the Energy Department, some experts are voicing frustration over the pace of such programs. “What I don’t like about Futuregen,” said Dr. Kutscher, an engineer

at the National Renewable Energy Laboratory in Golden, Colo., “is the word ‘future’ in there.”

Beyond a Holding Action

No matter what happens in the next decade or so, many experts say, the second and probably hardest phase of stabilizing the level of carbon dioxide will fall to the generation of engineers and entrepreneurs now in diapers, and the one after that. And those innovators will not have much to build on without greatly increased investment now in basic research.

There is plenty of ferment. Current research ranges from work on algae strains that can turn sunlight into hydrogen fuel to the inkjet-style printing of photovoltaic cells — a technique that could greatly cut solar-energy costs if it worked on a large scale. One company is promoting high-flying kite-like windmills to harvest the boundless energy in the jet stream.

But all of the small-scale experimentation will never move into the energy marketplace without a much bigger push not only for research and development, but for the lesser-known steps known as demonstration and deployment.

In this arena, there is a vital role for government spending, many experts agree, particularly on “enabling technologies” — innovations that would never be pursued by private industry because they mainly amount to a public good, not a potential source of profit, said Christopher Green, an economist at McGill University.

Examples include refining ways to securely handle radioactive waste from nuclear reactors; testing repositories for carbon dioxide captured at power plants; and, perhaps more important, improving the electricity grid

so that it can manage large flows from intermittent sources like windmills and solar panels.

“Without storage possibilities on a large scale,” Mr. Green said, “solar and wind will be relegated to niche status.”

While private investors and entrepreneurs are jumping into alternative energy projects, they cannot be counted on to solve such problems, economists say, because even the most aggressive venture capitalists want a big payback within five years.

Many scientists say the only real long-term prospect for significantly substituting for fossil fuels is a breakthrough in harvesting solar power. This has been understood since the days of Thomas Edison. In a conversation with Henry Ford and the tire tycoon Harvey Firestone in 1931, shortly before Edison died, he said: “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

California, following models set in Japan and Germany, is trying to help solar energy with various incentives.

But such initiatives mainly pull existing technologies into the market, experts say, and do little to propel private research toward the next big advances.

The Role of Leadership

At the federal level, the Bush administration was criticized by Republican and Democratic lawmakers at several recent hearings on climate change.

Mr. Connaughton, the lead White House official on the environment, said most critics are not aware of how much has been done.

“This administration has developed the most sophisticated and carefully considered strategic plan for advancing the technologies that are a necessary part of the climate solution,” he said. He added that the administration must weigh tradeoffs with other pressing demands like health care.

Since 2001, when Mr. Bush abandoned a campaign pledge to limit carbon dioxide from power plants, he has said that too little is known about specific dangers of global warming to justify hard targets or mandatory curbs for the gas.

He has also asserted that any solution will lie less in regulation than in innovation.

“My answer to the energy question also is an answer to how you deal with the greenhouse-gas issue, and that is new technologies will change how we live,” he said in May.

But critics, including some Republican lawmakers, now say that mounting evidence for risks — including findings that administration officials have tried to suppress of late — justifies prompt, more aggressive action to pay for or spur research and speed the movement of climate-friendly energy options into the marketplace.

Martin I. Hoffert, an emeritus professor of physics at New York University, said that what was needed was for a leader to articulate the energy challenge as President John F. Kennedy made his case for the mission to the moon. President Kennedy said his space goals were imperative, “not because they are easy, but because they are hard.”

In a report on competitiveness and research released last year, the National Academies, the country’s top science advisory body, urged the government to substantially

expand spending on long-term basic research, particularly on energy.

The report, titled “Rising Above the Gathering Storm,” recommended that the Energy Department create a research-financing body similar to the 48-year-old Defense Advanced Research Projects Agency, or Darpa, to make grants and attack a variety of energy questions, including climate change.

Darpa, created after the Soviet Union launched Sputnik in 1957, was set up outside the sway of Congress to provide advances in areas like weapons, surveillance and defensive systems. But it also produced technologies like the Internet and the global positioning system for navigation.

Mr. Connaughton said it would be premature to conclude that a new agency was needed for energy innovation.

But many experts, from oil-industry officials to ecologists, agree that the status quo for energy research will not suffice.

The benefits of an intensified energy quest would go far beyond cutting the risks of dangerous climate change, said Roger H. Bezdek, an economist at Management Information Systems, a consulting group.

The world economy, he said, is facing two simultaneous energy challenges beyond global warming: the end of relatively cheap and easy oil, and the explosive demand for fuel in developing countries.

Advanced research should be diversified like an investment portfolio, he said. “The big payoff comes from a small number of very large winners,” he said. “Unfortunately, we cannot pick the winners in advance.”

Ultimately, a big increase in government spending on basic energy research will happen only if scientists can persuade the public and politicians that it is an essential hedge against potential calamity.

That may be the biggest hurdle of all, given the unfamiliar nature of the slowly building problem — the antithesis of epochal events like Pearl Harbor, Sputnik and 9/11 that triggered sweeping enterprises.

“We’re good at rushing in with white hats,” said Bobi Garrett, associate director of planning and technology management at the National Renewable Energy Laboratory. “This is not a problem where you can do that.”

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British Government Report Calls for Broad Effort on Climate Issues

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By ANDREW C. REVKINPublished: October 30, 2006

A report commissioned by the British government and scheduled for release Monday calls for substantial international cooperation to combat global warming and doubling public spending on research into low-carbon technologies.

The main findings of the 16-month study, led by Sir Nicholas Stern, the chief of Britain’s economic service, were described over the weekend in several British news reports. The Reuters news agency quoted the report’s 27-page summary as saying, “The evidence gathered by the review leads to a simple conclusion: the benefits of strong, early action considerably outweigh the costs.”

The report, prepared for Tony Blair, the prime minister, and Gordon Brown, the finance minister, has been heavily promoted by Britain and environmental groups as one of the most authoritative reviews of climate costs, although some economists and energy experts at anti-regulatory research groups saw it as understating the cost of an accelerated transition away from the fossil fuels that provide nearly 90 percent of the world’s energy today.

The report, called the Stern Review on the Economics of Climate Change, will be published online at www.sternreview.org.uk.

If emissions are not cut and temperatures rise as many scientists project, the Reuters agency quoted the report as saying that, among various impacts, melting glaciers would threaten one sixth of the world population by raising sea levels and drying up river sources.

The Observer, a British newspaper, reported that the study cited a figure of £3.68 trillion (the equivalent of $6.98 trillion) as the cost to society of failing to start blunting global warming within a decade.

“Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century,” the report said, according to Reuters.

The study estimated that the cost of cutting emissions in 2050 to 60 percent to 80 percent below 1990 levels would be about 1 percent of total global economic activity by then, Reuters and The Observer said. If emissions cannot be cut to those levels, the cost from climatic impacts could be 5 to 20 times higher, The Observer cited the study as saying.

The study, according to the news reports, said that progress would best be accomplished by doubling global investment in research on climate-friendly energy technologies and placing a rising cost on further emissions of the greenhouse gases, led by carbon dioxide, to propel the shift toward non-polluting options.

The news reports on the study are consistent with presentations by Sir Nicholas, including a speech last January at Oxford University.

Other recent estimates of the eventual annual costs of stabilizing concentrations of greenhouse gases over the 21st century have ranged from 1 percent of global gross domestic product to 16 percent by around 2100, not counting any savings from averted damage.

By comparison, the world is currently spending just over $1 trillion a year, or about 2.5 percent of global gross global domestic product, on defense, according to a yearly survey by the Stockholm International Peace Research Institute. (Military spending in the United States is about 3.7 percent of gross domestic product.)

“This confirms what we’ve seen for a long time,” said Kert Davies, a climate-policy coordinator for Greenpeace. “The longer we take to act, the greater the costs will be.”

Jerry Taylor, an expert on energy and climate policy at the Cato Institute, a libertarian research group in Washington, said the wide range of cost estimates for cutting emissions “basically tells you we’re guessing.”

Overall, he said, he put more faith in academic analyses than one produced at a government’s request, particularly at a time when the public appears eager to see signs of action on the issue.

The release of the 700-page report, which was 16 months in the making, will come one week before the start of the latest round of talks on the Kyoto Protocol, the first international pact requiring cuts in heat-trapping emissions.

The United States has not ratified the Kyoto pact but is a party to the voluntary treaty that preceded it, which requires all signatories to seek to avoid a dangerous buildup of greenhouse gases.

The Kyoto Protocol, an addendum to the original treaty, requires three dozen participating industrialized countries to cut their combined emissions 5 percent below 1990 levels between 2008 and 2012.

At the moment, many of the three dozen industrialized countries bound by the pact are not on track to meet targets. And there are few indications of a shift toward accepting binding restrictions in the United States, the world’s biggest emitter of greenhouse gases, or China and India, which are projected to be the dominant sources of emissions in a couple of decades.

California, Taking Big Gamble, Tries to Curb Greenhouse Gases

Max Whittaker for The New York Times

AN INCENTIVE-DRIVEN VENTURE Dan Bolden installing solar panels in a subdivision in Rocklin, Calif. A new law requires the panels to be a standard option for buyers of new homes by 2012.

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By FELICITY BARRINGERPublished: September 15, 2006

SACRAMENTO — In the Rocky Mountain States and the fast-growing desert Southwest, more than 20 power plants, designed to burn coal that is plentiful and cheap, are on the drawing boards. Much of the power, their owners expected, would be destined for the people of California.

The Energy ChallengeClearing the Air Articles in this series are examining the ways in which the world is, and is not, moving toward a more energy efficient, environmentally benign future.Previous Articles in the Series » Related Links:Environmental Defense/Center for Energy Efficiency and Renewable Technology: Report on Coal-Fired Plants

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A POLITICAL PUSH Speaker Fabian Núñez and Assemblywoman Fran Pavley sponsored a law to cut carbon dioxide emissions by 25 percent.

But such plants would also be among the country’s most potent producers of carbon dioxide, the king of gases linked to global warming. So California has just delivered a new

message to these energy suppliers: If you cannot produce power with the lowest possible emissions of these greenhouse gases, we are not interested.

“When your biggest customer says, ‘I ain’t buying,’ you rethink,” said Hal Harvey, the environment program director at the William and Flora Hewlett Foundation, in Menlo Park, Calif. “When you have 38 million customers you don’t have access to, you rethink. Selling to Phoenix is nice. Las Vegas is nice. But they aren’t California.”

California’s decision to impose stringent demands on suppliers even outside its borders, broadened by the Legislature on Aug. 31 and awaiting the governor’s signature, is but one example of the state’s wide-ranging effort to remake its energy future.

The Democratic-controlled legislature and the Republican governor also agreed at that time on legislation to reduce industrial carbon dioxide emissions by 25 percent by 2020, a measure that affects not only power plants but also other large producers of carbon dioxide, including oil refineries and cement plants.

The state’s aim is to reduce emissions of climate-changing gases produced by burning coal, oil and gas. Other states, particularly New York, are moving in some of the same directions, but no state is moving as aggressively on as many fronts. No state has been at it longer. No state is putting more at risk.

Whether all this is visionary or deluded depends on one’s perspective. This is the state that in the early 1970’s jump-started the worldwide adoption of catalytic converters, the devices that neutralize most smog-forming chemicals emitted by tailpipes. This is the state whose per capita

energy consumption has been almost flat for 30 years, even as per capita consumption has risen 50 percent nationally.

Taking on global warming is a tougher challenge. Though California was second in the nation only to Texas in emissions of carbon dioxide in 2001, and 12th in the world, it produced just 2.5 percent of the world’s total. At best, business leaders asked in a legislative hearing, what difference could California’s cuts make? And at what cost?

California, in fact, is making a huge bet: that it can reduce emissions without wrecking its economy, and therefore inspire other states — and countries — to follow its example on slowing climate change.

Initiatives addressing climate change are everywhere in California, pushed by legislators, by regulators, by cities, by foundations, by businesses and by investors.

Four years ago, California became the first state to seek to regulate emissions of carbon dioxide from automobile tailpipes. Car dealers and carmakers are challenging the law in federal court.

In late August, Gov. Arnold Schwarzenegger signed a measure requiring builders to offer home buyers roofs with tiles that convert sunlight into electricity. Homeowners in some communities are already choosing them to reduce their electric bills.

California, which has for decades required that refrigerators, air conditioners, water heaters and other appliances become more energy efficient, just added to the list: first, chargers for cellphones or computers; second, set-top boxes and other remote-controlled devices. Those categories consume up to 10 percent of a home’s power.

Last fall, California regulators barred major investor-owned electrical utilities from signing long-term contracts to buy energy unless the seller’s greenhouse-gas emissions meet a stringent standard.

“We are dealing with it across the board,” said Michael R. Peevey, the president of the Public Utilities Commission. By contrast, the Bush administration has been averse to any legislative assault on climate change.

Opponents say California may hurt its own residents with its clean-energy mandate. Scott Segal, a lawyer for Bracewell & Giuliani who represents electric utilities, summarized California’s policy as: “All electrons are not created equal. We’re going to discriminate against some of them, and create artificial barriers in the marketplace for electricity.” California consumers could end up paying more for their energy and struggling to find enough, Mr. Segal said.

Is California dreaming? Can its multifaceted approach become a toolkit for other states? Will investors make the state the incubator for clean-energy technologies that will reduce its energy bills and buoy its economy? Or will all this turn California into a stagnating economic island of ever-rising electricity prices and ever-rolling blackouts?

One thing is certain: The issue will not go away. This summer, a brutal California heat wave killed roughly 140 people. A 2004 National Academy of Sciences report predicted that, at the current growth rate of emissions, there would be at least five times as many heat waves in Los Angeles by 2100 compared with the current historical average, and twice as many heat-related deaths.

The study predicted that at least half the state’s alpine forests would disappear by century’s end, and that the Sierra snowpack — crucial to California’s water supply —

would decline by at least 29 percent and as much as 70 percent.

There seems to be political support, in California and nationally, for action on climate change. Statewide, a July 26 poll from the Public Policy Institute of California showed that 79 percent of 2,051 people surveyed said that global warming was a “very serious” or a “somewhat serious” threat to the state’s economy and quality of life. The findings mirrored those of a national poll of 1,206 people conducted in mid-August by The New York Times and CBS News.

But polling organizations have asked little about the potentially painful sacrifices that may be required.

The Car Culture

Back in the 1950’s, when the movie director George Lucas was growing up, cars rocked around the clock in Modesto, and they were so enshrined in his 1973 hit, “American Graffiti.” The movie reaffirmed what much of the nation knew — there was no car culture like California’s. Sleek convertibles? Muscle cars? Sport utility vehicles? Many were hatched in the design studios of Detroit, but popularized by Hollywood movies and celebrities, and by plain old California consumers.

Fast forward to August. In the middle of the sales lot at Modesto Toyota sat a long row of sport utility vehicles the dealership had acquired as trade-ins in previous weeks. Leaning on a 2006 Ford Expedition, George S. Ismail, a sales manager, said, “We’re getting a lot of people trading in their sport utility vehicles for smaller cars.” Even heavily discounted, the used S.U.V.’s sit for weeks.

Yet Modesto Toyota is breaking records, Mr. Ismail said, selling about 400 vehicles a month, up from 260 a year ago. Most are small cars — Camrys and Corollas. Some are hybrid vehicles that use even less fuel, like the Prius. One-quarter of 200,000 new hybrid vehicles registered nationwide in 2005 belonged to Californians, according to the automotive analyst R. L. Polk.

With smaller cars increasingly popular, California now burns less gasoline per capita than all but six states. Burning less gasoline cuts carbon dioxide. Tailpipes account for more than half the state’s carbon dioxide emissions, federal figures show.

Much of this change in driver taste is attributable to the higher price of gasoline. But what if gasoline prices fall again and bigger, less efficient vehicles become more popular? California has an answer.

It came from Assemblywoman Fran Pavley, a Democrat and former schoolteacher who drives a Prius and whose South Coast district has a bird’s-eye view of the smoggy Los Angeles basin. Four years ago Ms. Pavley wrote the first state law regulating carbon dioxide emissions from cars and trucks. It requires vehicle makers to eventually reduce the average emissions of carbon dioxide of the mix of cars it sells in California by 30 percent, beginning with the 2009 model year. Light trucks, including sport utility vehicles, must meet the same standard by the 2016 model year.

Ten states, including New York, New Jersey and Connecticut, have followed suit. Canada instituted voluntary emissions reductions at similar levels, which major automobile manufacturers have agreed they can meet. “We think that, coupled with Canada, we’re now over one-third of the market,” Ms. Pavley said in an interview.

But automobile manufacturers and some dealerships have vowed to wipe her law from the books. Their lawsuit’s central assertion is that, by regulating carbon dioxide emissions, California is using a backdoor means to control fuel efficiency, which, under the federal Energy Policy and Conservation Act, is the exclusive preserve of the federal Transportation Department. To produce less carbon dioxide, cars would have to be more fuel efficient.

On Sept. 15, Judge Anthony W. Ishii of Federal District Court in Fresno will hear arguments on California’s request to dismiss the case. If the lawsuit survives, the first hearing is set for January. This schedule overlaps with that of another case with direct bearing on this issue. The Supreme Court, petitioned by a dozen states, led by Massachusetts, and three cities, including New York, will decide whether the law requires the Environmental Protection Agency to declare carbon dioxide a pollutant and to regulate it. The Bush administration contends it has no authority to do either.

If the Supreme Court accepts the administration’s arguments, it will not help California in its legal fight against Detroit, because a key to the state’s case is the contention that carbon dioxide is in fact a pollutant under the Clean Air Act.

Hungry Electronics

Imagine all the small electronic devices in a modern home — iPods and handheld organizers, cellphones and laptops — charging at a power strip.

Arthur H. Rosenfeld, a member of the California Energy Commission, knows how much electricity is wasted when people unplug the devices but leave the charger plugged in. Dr. Rosenfeld estimates that such chargers — along with

appliances like televisions that draw power even when they are off because they are designed to respond to remote controls — use up to 10 percent of an average home’s power.

He calls them “vampires” — things with teeth that suck power at night.

Recently, Dr. Rosenfeld proudly held up a small green cellular phone charger that consumes less than half a watt of electricity — a fifth as much as its predecessors — when left plugged into an outlet. It meets state standards that take effect in 2007. The same standards will require sharp power cutbacks from audio and video equipment, both when the devices are in use and when they are standing by for a remote signal.

Since the 1970’s, California’s energy-efficiency standards have reduced electricity consumption by the equivalent of the output of more than 20 average power plants, Dr. Rosenfeld said. And the standards have become templates for other states and Washington. Nationally, Dr. Rosenfeld added, energy-efficiency policies have saved the economy $700 billion since the 1970’s.

But why would utilities, which sell electricity, have any interest in seeing sales diminish? In 1982, the Public Utilities Commission decoupled utilities’ sales and their profits by allowing rate increases for utilities that helped customers cut energy use.

The logic was that for every dollar the consumer did not spend on energy, the utility would get real income — say 15 cents, which would exceed the profit the utility could have made on that dollar. For consumers, efficiency savings more than offset the rate increases. “Even though rates go up, bills go down,” said Mr. Harvey of the Hewlett Foundation.

Ralph Cavanagh, the co-director of the energy program at the Natural Resources Defense Counsel, said: “Every other state in the country rewards utilities for selling more energy. It’s a perfectly perverse incentive.”

Mr. Peevey, of the utilities commission, said he expected new efficiencies to absorb half the increase in demand as the state grows to 40 million people, from 38 million.

Mr. Peevey’s commission has also been a prime mover in increasing state support for residential solar power. Solar energy remains four times as expensive as electricity produced by conventional fuels. But, he said, “the idea is to make the solar industry a self-sustaining, economically viable industry,” and to make the cost come down.

California businesses and investors, public and private, are getting into the act. The state’s huge pension fund, Calpers, is committing just under $1 billion to renewable-energy investments. Among the early incentive-driven ventures in solar power are the homes in the Carsten Crossings subdivision in Rocklin, a Sacramento suburb. In August, Mr. Schwarzenegger signed legislation making solar panels a standard option for new-home buyers by 2012 and ensuring that utilities reduce homeowners’ bills based on the electricity returned to the grid.

Some of those incentives were available when construction started. Now four families have moved in. They see themselves as pragmatists, not crusaders. “This is the next logical step” in construction, said one of the homeowners, Lt. Col. Thomas Sebens, a specialist in drone aircraft at Beale Air Force Base.

Their roofs show how public and private decisions, markets and government, have meshed. T. J. Rodgers, a fiercely anti-regulatory entrepreneur, underwrote the solar cells’

production. The PowerLight Corporation, based near San Francisco, bought the cells from Mr. Rodgers’s company, the SunPower Corporation, and turned them into roof tiles. The tiles ended up on houses built by Grupe Homes, based in Stockton, because state utility regulators established a $5,500 state-financed rebate for builders who install similar systems, which cost $20,000. Federal law gives home buyers a $2,000 tax credit; state law guarantees lower electric bills as utilities buy back power homeowners do not need.

The July utility bills, the new homeowners’ first, were the talk of the neighborhood.

Larry Brittain, an office products salesman with a four-bedroom, 2,400-square-foot home, was the winner at $73.27 for electricity in the month ending July 25 — the hottest July on record. For the last 10 June days in a similar house nearby, his bill was $103.

“This is a bet with a winning hand,” Mr. Brittain said. “You can’t lose.”

Pressure on Suppliers

In Gerlach, Nev., 100 miles north of Reno, a high desert butte was made ready two years ago for its wedding to the Granite Fox Power Project, a plant designed to burn pulverized Western coal. Electrical transmission lines were close by.

But, like Miss Havisham in Dickens’s “Great Expectations,” Gerlach waits for a groom that may never arrive. The plant was a certain source of significant new carbon dioxide emissions. Mr. Cavanagh predicted that it “would wipe out all the carbon dioxide savings from California’s

spectacularly successful efforts to save electricity during 2001 and 2002.”

Southern Californians would likely be the eventual customers. But last fall, the California Public Utilities Commission barred the investor-owned utilities it regulates from signing long-term contracts for electricity if the emissions exceeded those of the cleanest gas-driven plants. The only technology that could accomplish that with coal is expensive and has not been perfected.

Said Mr. Peevey of the commission, “All we’re saying is, Fine, you send it here, but it has to be, in terms of air quality and greenhouse gas emissions, it has to be comparable to the newest combined-cycle gas turbine.” One fifth of California’s electricity comes from coal, the vast majority of it from outside the state.

This past winter, Sempra Energy, the parent of San Diego Gas & Electric and Sempra Generation and the developer of Granite Fox, put the project up for sale. Neal E. Schmale, Sempra’s president, said the ruling had had a negligible impact on the decision. High natural gas prices prompted the company to invest in gas storage and terminals instead, Mr. Schmale said.

Among California environmentalists, however, the “for sale” sign on Granite Fox was taken as a victory for a pioneering policy that reaches beyond the state’s borders. V. John White, an environmental lobbyist in Sacramento, compares building a Southwestern power plant to building a mall: California is a desirable anchor tenant.

But California is also the state where electricity deregulation foundered in 2000; bills soared and an economic crisis ensued. Even without a crisis, Californians’

electricity rates are about 40 percent above the national average.

Robert McIlvaine, a coal industry consultant from Northfield, Ill., said, “If you are going to generate electricity from gas, the cost of doing so is going to be considerably greater than coal — 50 percent more or 100 percent more.”

But, Mr. Harvey said: “People don’t pay rates. They pay bills. You can have twice the rate and half the consumption and be just as happy.”

On Aug. 31, legislators enacted the bill sponsored by the State Senate president, Don Perata, Democrat of Oakland, and extended the commission’s rule to all power providers.

Business people ask if this could provoke another crisis. Power-plant siting experts, like Thomas A. Johns, the vice president of development at Sithe Global Power, a New York company, say that, in the short term, the loss of California business may not matter much to the merchants of power in the Southwest. Fast-growing cities like Phoenix and Las Vegas are ready markets.

In the long run, however, “California is a big piece” of the total consumption in the West — 40 percent, Mr. Johns said. “If 40 percent of the Western load will not buy coal, you will have less coal.”

The risk, both Mr. Johns and Mr. Schmale said, is in increasing the state’s reliance on natural gas, whose price has been extremely volatile in recent years. (California law bars construction of nuclear plants until the questions of waste disposal are resolved.)

“When you exclude coal and nuclear from your base load,” Mr. Johns said, “you’ve only got one option, and that’s

natural gas.” Another measure awaiting the governor’s signature toughens standards by requiring that by 2010, 20 percent of the energy sold in California comes from a portfolio of renewable sources, like geothermal and wind. Last year, 10.7 percent of California’s power came from renewable sources.

New renewable energy sources could make prices less volatile, but Mr. Schmale of Sempra said California’s policy makers need to muster “the political will” to build transmission lines and “all those other things that would be necessary to make the environmental things work.”

Caps, Costs and Credits

Perhaps the most ambitious measure California has undertaken is the newly mandated 25 percent reduction in carbon dioxide emissions. “If we do it right,” Mr. Schwarzenegger said at a news conference, “it can be an example for the rest of the world and the rest of the country to see.” If not, the concept could be discredited.

The law, sponsored by Ms. Pavley and the Assembly speaker, Fabian Núñez, Democrat of Los Angeles, gives the California Air Resources Board authority to set industry-specific targets for emissions reductions, effective in 2012, and to establish mechanisms — including the creation of emissions allowances that companies might trade or bank — to facilitate compliance. These targets would be adjusted from 2012 to 2020 to meet the 25 percent goal.

Those who have studied the question agree that the new system will cost consumers more. “A cap-and-trade system will raise the cost of electricity to consumers to some degree,” said Lawrence H. Goulder, a professor of environmental and resource economics at Stanford University.

As the European Union found after the 1997 Kyoto Protocol, figuring out how to assign emissions credits is not easy.

Whatever the decisions, chances are that they will be met by a lawsuit. Margo Thorning, the chief economist at the American Council for Capital Formation, a group supporting business interests, argues in a study that “sharp cutbacks in California’s energy use would be necessary to close the 41 percent gap in 2020 between projected emissions” and the cuts the law requires. Dr. Thorning added in an interview, “The technologies that will enable us to move quickly in a cost-effective way away from fossil fuel just aren’t there yet.”

Allan Zaremberg, president of the state Chamber of Commerce, predicted that businesses would flee to unregulated areas and continue to emit climate-changing gases.

Dr. Thorning’s study was countered in mid-August with a study by David Roland-Holst, an adjunct professor of agricultural and resource economics at the University of California, Berkeley. Professor Roland-Holst argued that the new law would add $60 billion and 17,000 jobs — in fields like alternative energy — to the California economy by 2020 by attracting new investment.

James D. Marston, the head of state global warming programs for Environmental Defense, the New York group that helped lead the fight for California’s new carbon cap, said, “We’ll look back in 10 years and say this was the final breakthrough and the final political consensus that we have to do something meaningful on global warming.”

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Fill Up on Corn if You Can

Peter Wynn Thompson for The New York Times; illustration by The New York Times

The Becker’s Hotrod BP station in Dwight, Ill., is one of 135 in the state to sell the corn-based fuel E-85.

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By ALEXEI BARRIONUEVOPublished: August 31, 2006

SPRINGFIELD, Ill. — Standing next to his pickup truck at a service station here, Robert Beck squeezed a yellow nozzle and filled up with the corn-based fuel blend of 85 percent ethanol and 15 percent gasoline that car companies, farmers and politicians alike love to promote as a way out of America’s oil addiction.

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Peter Wynn Thompson for The New York Times

Robert Beck said E-85 was worth buying for his pickup only if it was at least 30 cents lower than gasoline.

Mr. Beck, an agronomist who travels throughout the Midwest, likes the idea of E-85, as the fuel blend is known, because it is made mostly from a domestic crop. But he still finds that buying the fuel is almost more trouble than it is worth.

“Everyone talks about it, but exactly where is it?” he said. “You have to have more fuel out there for consumers to buy.’’

That could take a while.

To assess just how efforts to help E-85 catch on were going, a New York Times reporter, accompanied part of the time by a photographer, drove through the region where its popularity is greatest. They found that despite all the good will toward ethanol, success is far from assured.

The fuel does have plenty of powerful supporters. General Motors used the Super Bowl this year to kick off its “Live Green, Go Yellow” campaign to encourage Americans to buy vehicles that can run on either E-85 or conventional gasoline. Ford Motor and VeraSun Energy, the second-

largest ethanol producer after Archer Daniels Midland, christened 300 miles of highway from Chicago to St. Louis the “Midwest Ethanol Corridor” in a marketing campaign that began in June.

But it also has plenty of drawbacks. Most oil companies want nothing to do with E-85, which they see as a money-losing alternative to their own petroleum-based products. Without help from the oil industry or a lot more flexible-fuel cars on the road, gasoline retailers are hesitant to install the expensive pumps, which can cost up to $200,000 with a new underground storage tank.

“There is no way E-85 can survive on its own without massive government subsidies at the state and federal levels,’’ said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation, an energy consultancy in New York.

Many drivers whose vehicles can run on ethanol will not buy E-85 unless it is markedly cheaper than regular gasoline, which has not always been the case. Part of the reason is basic economics: E-85 delivers only three-quarters as much energy per gallon as gasoline, meaning drivers will have to fill up their tanks more often if they choose to use the fuel.

More than 850 service stations now carry E-85, an increase from 350 since the beginning of 2005, but the fuel is still unavailable at most of the 169,000 stations in the United States. Sales are so slim that some retailers count their regular E-85 customers on one hand.

Customers like Mr. Beck, who want the fuel, struggle to find it: in Illinois, 135 stations carry it, but in neighboring Missouri only 54 stations have E-85 pumps. Kansas has 13.

None of this has discouraged E-85’s supporters, who are relentlessly pushing to expand use of the fuel, which already benefits from a tax credit of 51 cents a gallon for producers of all forms of ethanol.

And in states like Illinois, the country’s second-biggest corn producer, after Iowa, politicians are lining up state financing to subsidize the installation of pumps at service stations, while offering rebate incentives to customers who use the fuel.

“E-85 is really I-85 — it’s about energy independence,” said Daniel Yergin, chairman of Cambridge Energy Research Associates, an energy consultancy.

But that dream remains far out of reach. For one thing, E-85 barely exists outside the Corn Belt. You cannot fuel up on it in New York or New England. California has only one station.

And even in Chicago, at the entrance to the ethanol corridor, it was hard to find a flexible-fuel car for the road trip. When Janet Conlon, a travel agent from Garber Travel, contacted four major rental car agencies, none said they had such cars available.

“Nobody had a clue what I was talking about,” Ms. Conlon said. The Times ended up renting a flexible-fuel Chevrolet Impala from a company affiliated with General Motors.

At the first stop, Becker’s Hotrod BP in Dwight, Ill., 75 miles south of Chicago, E-85 was selling for $2.70 a gallon, 50 cents cheaper than the station’s regular unleaded.

Four years ago, the Illinois Corn Growers Association approached Phillip E. Becker, the station’s owner and a longtime gasoline retailer, with an offer to pay to install an

E-85 pump, an investment of about $100,000. Because the alcohol in E-85 corrodes traditional gasoline storage tanks, a new underground one was necessary, along with special fuel lines and a special dispenser.

Mr. Becker, wanting to help local farmers, accepted the deal, agreeing to sell the E-85 at no profit for at least five years so he could offer it at a price lower than gasoline.

“I am selling this at cost as a good-will thing,” Mr. Becker said. The E-85, he said, also helps bring passengers into his store for sodas and collectible toy cars, and into an adjoining Burger King, in which he has a business interest. But without the help of the growers’ association, he said, he probably would not have made the investment.

Mr. Becker has enjoyed the local celebrity his E-85 pump has brought him. Officials from the state of Illinois have even shot photos there for postcards that are placed in the vehicles of state employees, urging them to stop at Becker’s.

E-85 sales at his service station, though, have proved erratic. They rose as high as 9,000 gallons a month in September last year when gasoline prices climbed over $3 a gallon, widening the spread with ethanol prices. But in July, Becker’s pumped only 3,010 gallons of E-85, after gasoline prices dropped and ethanol prices rose.

Mr. Becker said he had “four really good customers,” two of them believing so strongly in E-85 that they traded in their vehicles for flexible-fuel ones. “E-85 is all they burn, no matter what the price is,” he said.

The farmers continue to champion their project. In June, they parked a small 1940’s-era corn wagon at a highway ramp near Mr. Becker’s stations to advertise the E-85 price.

General Motors included him in a recent regional promotion in which the company gave away $1,000 in free fuel — E-85 or gasoline — to purchasers of flexible-fuel vehicles.

The three-month promotion, however, did not help overall sales at nearby Tyler Chevrolet/Buick, said Byron Moore, the new-car sales manager. At best, it may have caused some buyers already set on certain truck models to choose the flexible-fuel engine to grab the free fuel.

But Mr. Moore said he doubted the buyers would actually fill up on E-85 very often, because “the word is out” that the fuel offered less mileage per gallon than gasoline. Ethanol is made up mostly of alcohol and yields less energy.

Mr. Becker said he saw E-85 sales slip when the price got to within a dime of gasoline. Mr. Beck, the E-85 customer in Springfield, said he had decided that E-85 was worth buying for his Ford truck only if the price was at least 30 cents lower than gasoline.

Volatile ethanol prices in recent months, driven by a regulatory change that has led to its increased use as a 10 percent additive in more states, have stymied the goals of E-85’s supporters. The National Ethanol Vehicle Coalition, a lobby group founded by corn growers, had estimated the number of stations would grow to 2,500 this year. Now, the coalition is willing to settle for 1,200, said Michelle Kautz, a spokeswoman for the group.

Still, the buzz over E-85 is growing — where it is available. Further south along Interstate 55, Theresa Kight, a cashier at a Qik-n-EZ in Normal, Ill., said more customers were asking about the station’s E-85 pumps. “A lot of them that are interested buy it just to support the farmers,” Ms. Kight said.

Outside the station, though, Kevin Hart, a heating and air-conditioning service contractor, was fueling up his van on gasoline. “Using more E-85 won’t solve the problem” of too much oil consumption and too little conservation, he said. “People will just think they are helping the environment, so now ‘I can burn more fuel.’ ’’

But the owners of Qik-n-EZ said they believed in E-85’s potential to diversify the country’s fuel sources — and help the Midwest’s economy. Grady Chronister, the president and founder of the company, said the stations, which get all their ethanol from VeraSun, were selling the E-85 very close to cost.

“This is not a product that warrants the financial investment at this time,” said Mr. Chronister, who added that his family owns farms that grow corn, giving them extra incentive to support E-85. “But we are glad we did it. We are in favor of alternative energy forms, especially those produced here in the United States.”

Along the ethanol corridor very few people were actually buying E-85. At a Qik-n-EZ in Springfield, there was a 45-minute wait before the first customer, Mr. Beck, arrived to refuel his 2006 Ford F-150 truck at the lone E-85 pump set well away from the four rows of gasoline pumps.

After buying his truck in April, Mr. Beck discovered only two months ago that it was dual-fuel. In the past, most drivers did not even know they had flexible-fuel vehicles because the car companies did not bother to tell them and the engines are virtually indistinguishable.

But from now on, “we’re going to do more to let people know what they have,” said Susan Cischke, vice president for environmental and energy engineering at Ford. She said

Ford marked its flexible-fuel vehicles on the hood and fuel cap.

American automakers hope to double annual production of flexible-fuel vehicles, to two million, by 2010. There are now about 5 million on the road, out of 238 million total vehicles.

Detroit has much to gain from producing E-85-ready vehicles. In addition to acting as a positive diversion from their broader financial problems, the flexible-fuel vehicles help them meet federal standards for average fuel economy without having to build far more expensive hybrid cars.

But car companies bristle at the notion that they alone can make E-85 a national or even regional success. “This is a bigger problem than one industry can solve,” Frederick Henderson, the chief financial officer at General Motors, said recently.

Major oil companies, which own fewer than 10 percent of the country’s gasoline stations, say they will not stand in the way of retailers who want to put in E-85 pumps. But they will not help, either.

That has placed the burden on the states where E-85 is linked with the success of ethanol. This year, Iowa, the country’s biggest corn producer, began giving its retailers a 25-cent-a-gallon credit for selling E-85 and is providing up to half the cost of installing E-85 pumps. The governor of Illinois, Rod R. Blagojevich, just proposed spending $30 million to add 900 pumps over the next five years, a sevenfold increase.

At the retail level, however, the effort to trumpet E-85 is inconsistent at best. Mr. Beck said he found the Springfield station only after doing some research, because the E-85 Web site run by the National Ethanol Vehicle Coalition lists

pumps only by city, with a limited mapping function that fails to show drivers their location in relation to each other.

Unlike the standard gasoline pumps, the E-85 pump at the Qik-n-EZ did not take credit cards, forcing Mr. Beck to stand in line for 15 minutes behind customers buying beer, cigarettes and lottery tickets.

“You would think it would be as easy as buying fuel,’’ he said, “but it is a pain in the fanny.”

And there is no room for error when trying to drive only on E-85. Do not leave Emporia, Kan., for instance, without fueling up a nearly empty tank first. Otherwise, somewhere on the Kansas Turnpike the fuel gauge needle goes below empty.

What then? Turn off the air-conditioning, coast part of the way in neutral and, finally, a service station — the only one for another 30 miles — has gasoline. But no E-85.

Slow Start for Revival of Nuclear Reactors

Pool photo by Dennis Brack

President Bush, second from right, visited the Calvert Cliffs Nuclear Plant last year with Constellation Energy officials.

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By MATTHEW L. WALDPublished: August 22, 2006

BALTIMORE — Nobody in the United States has started building a nuclear power plant in more than three decades. Mayo A. Shattuck III could be the first.

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Laura Pedrick for The New York Times

William F. Hecht, chairman of PPL, believes cleaning up coal-fired plants maximizes shareholder return better than building nuclear plants.

Steve Ruark for The New York Times

Mayo A. Shattuck III, Constellation Energy’s chief, is proposing a fleet of identical nuclear plants.

As the chief executive of Constellation Energy, a utility holding company in Baltimore that already operates five nuclear reactors, Mr. Shattuck is convinced that nuclear power is on the verge of a renaissance, ready to provide

reliable electricity at a competitive price. He has already taken the first steps toward achieving that, moving recently to order critical parts for a new reactor.

But Constellation’s neighboring utility, the PPL Corporation, takes a different view. Even though PPL has successfully operated two reactors since 1983, its chairman, William F. Hecht, said that he had no plans for new nuclear plants.

When nuclear reactors were first commercialized almost half a century ago, every self-respecting electric utility wanted one. They were encouraged by a government that saw nuclear energy as a peaceful, redemptive byproduct of the deadly power unleashed at Hiroshima. The federal official for promoting nuclear energy, Lewis L. Strauss, said it would produce electricity “too cheap to meter.”

It has never given consumers anything like that. But with the industry now consolidated so that most reactors are in the hands of a comparatively few operators, utility executives are sharply divided over whether nuclear power offers an attractive choice as they seek to satisfy a growing demand for electricity.

For them, the question comes down not so much to safety and environmental impact but to whether the potential reward is worth the financial risk. And those who already operate several reactors are prone to want more.

The debate within the utility industry over reviving nuclear power has taken on added importance, though, because unlike plants that burn coal and other fossil fuels, reactors do not produce gases that contribute to global warming.

And once again, Washington is encouraging utilities to push ahead. The summer of 2005’s energy bill offered a generous production tax credit, insurance against regulatory delays

and loan guarantees. Earlier legislation gave the industry money to help plan new plants. And they continue to benefit from a ceiling on liability damages in case of an accident.

Despite nuclear power’s promise as a clean energy source that could hold down emissions of global warming gases, most environmentalists are skeptical of the latest claims by its advocates. They say that utilities, at best, will move ahead with a handful of plants that will receive lavish incentives from the government. But the risks of nuclear power are still so high, they argue, that no utility will be willing to put its own money into building a plant unless the federal government heavily subsidizes it.

“What dismays me about the present situation is the extent to which the Congress and the administration, and now an occasional state legislature, have rushed to anoint it as the solution to climate change,” said Peter A. Bradford, a former member of the Nuclear Regulatory Commission and former chairman of the public service commissions of both Maine and New York. If nuclear plants cannot compete without subsidies, he said, they should not be built.

Today, nuclear power supplies just under 20 percent of the electricity used in the United States. Its share has been slipping lately as new plants running on other fuels have come online.

With the price of natural gas increasing, coal has emerged once again as the most popular way to generate electricity, a trend that — if it continues — is expected to lead to a significant rise in emissions of carbon dioxide. The utility sector emits about a third of the carbon dioxide produced in this country, nearly all of that from coal.

Adding dozens more nuclear reactors to that mix could reverse the rise in carbon dioxide from the electricity-

generating system, but its advance would also run up against certain limits.

Nuclear plants cannot replace all of the fossil fuel used in power generation because current nuclear designs do not easily alter the power output. Plants running on natural gas and coal, by contrast, can adjust their output over the course of a day to match demand.

For a long time, the underlying confidence of utilities in nuclear technology was moot because the economics would not support a new reactor; all those ordered after 1973 were canceled.

But now, because of high prices for natural gas and uncertainty about how emissions from coal plants will be regulated in the future, the nuclear industry is moving from near death to the prospect that perhaps a handful of plants will be ordered in the next few years. The Nuclear Regulatory Commission counts 27 potential reactors under consideration; 103 are now operable.

For all the momentum behind the push, however, there is still a high degree of skepticism within the utility industry.

PPL, for example, has successfully operated two reactors in Berwick, Pa., for 23 years. But with some utilities around the country making preliminary moves or joining consortiums to explore new designs, PPL is absent.

There are better places to put the money of shareholders, Mr. Hecht of PPL said. At the moment he sees a much greater advantage in cleaning up his coal-fired plants, investing $1.5 billion to scrub out most of the sulfur dioxide. That would not only benefit the environment but also generate pollution credits PPL can profitably sell.

That decision was “dull and basic,” Mr. Hecht said, but adheres to a paramount goal: maximizing shareholder returns. He won’t rule out nuclear plants forever, Mr. Hecht said in an interview, but the business case would have to be a lot clearer than it is now.

“Technology often has zealots, it seems, behind it,” he said of companies moving forward on nuclear power.

By contrast, Constellation Energy not only wants to build reactors for itself, it also has formed a partnership with a reactor manufacturer to build and operate them for other utilities.

“This organization has a history of feeling that they have done well in nuclear,” Mr. Shattuck said. Constellation executives think that they “can continue to do well in nuclear and shouldn’t shy away from their responsibility.”

Constellation plans to apply for a reactor-operating license by the end of 2007, probably at either the Calvert Cliffs site in Maryland where it runs two nuclear reactors built in the 1960’s and 1970’s, or at Nine Mile Point, in Scriba, N.Y., on Lake Ontario, where it operates two reactors it bought in 2001.

Its decision has implications beyond the corporate bottom line for the global environment. There are also arguments over nuclear waste and the risk of accidents. Around New York City, especially, there is concern over reactors as terrorist targets.

But the risk that really matters to utility executives is financial. Among the companies that would actually build these plants, executives focus more on uncertain factors like the future price of power, the cost of producing competing fuels, and the cost of cleaning up coal plants to meet

standards for the pollutants that Washington does regulate — sulfur dioxide, nitrogen oxides and soot.

At this point companies do not face any constraints on carbon emissions.

Companies that want to build — among them Entergy, Dominion and Duke Energy — talk about new designs intended to further reduce the risk of an accident and their ability to manage nuclear waste until the government eventually opens a national waste repository.

Opponents often cite the risk of accidents and the problem of nuclear waste, but the companies that do not want to build say that those are not factors in their decisions.

When PPL builds a power plant, it usually sells the power first, and uses the signed contracts to reassure the investors and the bankers from whom it is seeking financing. “I’m not going to build any large generation unhedged,” Mr. Hecht said.

But this is not easy with a nuclear plant. For one thing, Mr. Hecht said, no one could be sure when it would be finished. And despite the industry’s efforts to shorten the time from order to completion, it could still be 10 years, he said.

“If you build 1,000 megawatts,’’ he asked, “how are you going to find someone to buy it 10 years out, for 10 years after it is finished?”

A nuclear plant ordered in 2007 could well turn out to be a more economical power source in 2020 than a coal plant ordered at the same time, he said, but the range of uncertainty is much larger. He is content to let others take the lead.

Constellation Energy insists it is driving risk out of the proposition. Constellation, which doubled its nuclear bet in the 1990’s by buying more reactors as the utility industry reorganized, contends that it has demonstrated one marketable skill — running reactors profitably — and that it could quickly follow a new plant with a copycat, building both on time and on budget.

Constellation has an expertise gained in the early, difficult years of nuclear power, Mr. Shattuck said, citing Michael J. Wallace, president of his company’s generation division.

“Mike is the only executive in the utility sector today who was an executive responsible for building new nuclear plants last time around,” he said. Mr. Wallace oversaw the construction and start-up of two nuclear plants built in Illinois: Byron, which fully entered commercial service in 1987, and Braidwood, the following year.

Constellation proposes a fleet of plants, identical down to the “carpeting and wallpaper,” Mr. Shattuck said, reducing the design costs on subsequent reactors to near zero. Operating processes would be identical, and operators could be shuffled among the plants, something that is often impossible today even with adjacent reactors. The company wants partners that would offer either equity or operating skills.

Constellation has a partnership, called UniStar Nuclear, with Areva, the French-German company, which is owned by Framatome and Siemens, to build a model. One model is under construction in Finland.

“A lot of it is establishing a model that mitigates risk as you move forward,” Mr. Shattuck said. “A lot of players out there haven’t quite figured out how they’re going to go to

their boards and ask for $4 billion, for which I’ll get cash flows in 13 years.”

Last December, Constellation and FPL, parent of Florida Power and Light, announced that they would merge, creating the country’s largest competitive marketer of power. That would put the company in an even better position to build new reactors, Mr. Shattuck said.

Some experts, however, remain skeptical that new reactors should be built, although they acknowledge this is increasingly likely. In the last 20 years or so, said Mr. Bradford, the former regulator, utility restructuring has often shifted the risks of new construction from ratepayers to investors.

“What the Congress has done now, for the first six or so plants, is to find a third pocket,” he said. “Now they’ve called upon the taxpayer to pony up.”

But even if a few plants are built, industry insiders do not expect nuclear power to assume a significantly greater role. Roger W. Gale, an electricity expert and former Energy Department official, asks several hundred utility executives each year what they foresee in their industry.

While they are convinced that a new plant will be ordered soon, the more than 100 senior utility executives who responded also said they do not expect “a future where nuclear generation represents a larger share of generation” than today.

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Search for New Oil Sources Leads to Processed Coal

Andy Manis for The New York Times

John Diesch, manager of the Rentech plant in East Dubuque, Ill., sees profit in using cheap coal to produce expensive truck fuel.

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By MATTHEW L. WALDPublished: July 5, 2006

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Changing Black Rock to Black Gold

EAST DUBUQUE, Ill. — The coal in the ground in Illinois alone has more energy than all the oil in Saudi Arabia. The technology to turn that coal into fuel for cars, homes and factories is proven. And at current prices, that process could be at the vanguard of a big, new industry.

Such promise has attracted entrepreneurs and government officials, including the Secretary of Energy, who want domestic substitutes for foreign oil.

But there is a big catch. Producing fuels from coal generates far more carbon dioxide, which contributes to global warming, than producing vehicle fuel from oil or using ordinary natural gas. And the projects now moving forward have no incentive to capture carbon dioxide beyond the limited amount that they can sell for industrial use.

Here in East Dubuque, Rentech Inc., a research-and-development company based in Denver, recently bought a plant that has been turning natural gas into fertilizer for forty years. Rentech sees a clear opportunity to do something different because natural gas prices have risen so high. In an important test case for those in the industry, it will take a plunge and revive a technology that exploits America's cheap, abundant coal and converts it to expensive truck fuel.

"Otherwise, I don't see us having a future," John H. Diesch, the manager of the plant, said.

With today's worries about the price and long-term availability of oil, experts like Bill Reinert, national manager for advanced technologies at Toyota, say that turning coal into transportation fuel could offer a bright future. "It's a huge deal," he said.

There are drawbacks; the technology requires a large capital investment, and a plant could be rendered useless by a collapse in oil prices. But interest was high even before the rise in oil prices; three years ago, the Energy Department ran a seminar on synthetic hydrocarbon liquids, and scores of researchers and oil company executives

showed up. The agency that runs municipal buses in Washington, D.C., and other consumers expressed interest.

But the enthusiasm was not enough to overcome the fear of a drop in oil prices. Lately, however, the price of diesel fuel, which determines the value of this coal-based fuel, also called synfuel, has soared, as has the price of natural gas, which made plants like the one at East Dubuque ripe for change.

Most of the interest is in making diesel using a technology known as Fischer-Tropsch, for the German chemists who demonstrated it in the 1920's. Daily consumption of diesel and heating oil, which is nearly identical, runs more than $400 million. The gasoline market is more than twice as large, but if companies like Rentech sated the demand for diesel, the process could be adapted to make gasoline.

The technology was used during World War II in Germany and then during the 1980's by South Africa when the world shunned the apartheid regime there. Now Rentech is preparing to use an updated version.

Sasol, the company that has used the technology for decades in South Africa, is exploring potential uses around the world and is conducting a feasibility study with a Chinese partner of two big coal-to-liquids projects in western China. Last August, Syntroleum, based in Tulsa, agreed with Linc Energy, of Brisbane, Australia, to develop a coal-to-liquids plant in Queensland.

Other projects are in various stages of planning in this country, although the one here on the Mississippi River just south of the Wisconsin border has a head start.

But people who think this technology will find wide use presume some kind of environmental controls, which the

Rentech plant, thus far, does not have. Some environment and energy experts doubt that the method is compatible with a world worried about global warming.

Unless the factory captures the carbon dioxide created during the process of turning coal into diesel fuel, the global warming impact of driving a mile would double.

"It's a potential disaster for the environment if we move in the direction of trying to create a big synfuel program based on coal to run our transportation fleet," said Daniel A. Lashof, of the Natural Resources Defense Council. "There's a brown path and a green path to replacing oil, and Fischer-Tropsch fuel is definitely on the brown path."

But the Energy Department sees potential. In March, the Energy Secretary, Samuel K. Bodman, said in a speech that making diesel fuel or jet fuel from coal was "one of the most exciting areas" of research and could be crucial to the President's goal of cutting oil imports. He said that loan guarantees enacted in last summer's energy bill might be used for Fischer-Tropsch diesel fuel.

In Des Plaines, Ill., near Chicago, a new company called GreatPoint Energy has developed, on a laboratory scale, a vastly improved process for turning coal into natural gas.

The promise and the pitfalls are similar for both GreatPoint and Rentech. Measured in the standard energy unit of a million British thermal units, or B.T.U.'s, coal sells for $1 or so, natural gas around $7. Diesel fuel is around $23. As with all energy conversions, turning coal into natural gas or diesel fuel means losing something in translation — specifically, energy — but if the price difference is big enough, the energy loss is not something that investors will worry about.

But it also means carbon emissions, which causes concern to environmentalists. Carbon is released in converting coal into an energy-rich gas made up of carbon monoxide and hydrogen, and then converting the gas into something more useful. Rentech wants to turn it into liquid fuel. GreatPoint wants to rearrange the molecules into natural gas.

But coal is cheap and the energy possibilities are endless. For example, at the Rentech plant, a substation on the east side of the plant that currently pulls in electricity will send it out instead. And, uniquely in this country, the plant will take coal and produce diesel fuel, which sells for more than $100 a barrel.

The cost to convert the coal is $25 a barrel, the company says, a price that oil seems unlikely to fall to in the near future. So Rentech is discussing a second plant in Natchez, Miss., and participating in a third proposed project in Carbon County in Wyoming.

The plant here will "bring back an industry that's shutting down," Hunt Ramsbottom, the company chairman, said of the fertilizer business. "The goal is fuels, but to get the plant up and running, fertilizer is a good backstop."

And it is all local. The coal will come from southern Illinois, by barge or rail. The diesel can go straight to terminals or truckstops in the area, said Mr. Diesch, the plant manager, and the fertilizer to local farms. An odd advantage is that today, most coal-burning power plants in the area use coal hauled from Wyoming, because its sulfur content is lower; burning high-sulfur coal encourages acid rain. But if the coal is gasified, rather than burned, filtering out the sulfur is relatively easy, and the sulfur changes from a pollutant to a salable product.

Emissions of traditional pollutants — that is, the ones the government regulates, and not carbon dioxide — will be lower with coal than they were with natural gas, he said. Outsiders are interested, but skeptical, because of the carbon problem. "It might serve our goals in terms of reducing oil dependence," said Phil Sharp, a former congressman from Indiana and now head of Resources for the Future, a nonprofit research organization in Washington. But "they should take into account that we are headed to a carbon-constrained economy."

Robert Williams, a senior research scientist at Princeton, said "it's a step backward" to operate a plant like Rentech's without capturing the carbon. "It almost doubles the emission rate," he said.

Mr. Ramsbottom also sees the carbon dioxide problem. "The worldwide production of Fischer-Tropsch fuels is going to ramp up dramatically, and carbon sequestration is on everybody's mind," he said. But the geology of this part of Illinois is not suitable for sequestering the carbon dioxide from these plants. Building a pipeline would be expensive and difficult to justify while carbon emissions are not taxed, experts say.

GreatPoint has a different plan: move the plant where it can sell the carbon.

Andrew Perlman, the company's chief executive, thinks it has value. "Not only is it capturable, one of biggest advantages of the system is, we can locate our plant near a natural gas pipeline, in places where we can sell that carbon dioxide for a profit, using existing technology," he said. Oil producers inject carbon dioxide into old oil fields, to force oil to the surface.

Backers also hope that methanization, the process GreatPoint uses, will succeed in part because it fits in with existing energy infrastructures, like gas pipelines and coal mines. If it did, it could have a profound impact on the balance of natural gas imports, lessening or eliminating the need for liquefied natural gas ports. Like Fischer-Tropsch diesel, methanization is not a new idea; one plant in North Dakota does it now, using a technology paid for under the Carter-era Synthetic Fuels Corporation. But GreatPoint is going about it in a new way, in which far less energy is lost in the transition. There is a potential to make fuels from gasification better than ordinary fuels. Robert Williams, a senior research scientist at Princeton University, points out that crop wastes and wood chips can also be gasified, producing carbon monoxide and hydrogen.

Normally, biomass is thought of as carbon-neutral, because for each plant cut down for gasification, another grows and absorbs carbon from the atmosphere. But if biomass is gasified and the carbon dioxide sequestered by being pumped into the ground in the expectation that it will stay there, then atmospheric carbon actually declines for every gallon produced.

From a greenhouse perspective, that is more attractive than what Rentech does now with the carbon dioxide from its plant here. It is sold to soft-drink bottlers. That keeps the gas sequestered until someone burps.

THE ENERGY CHALLENGE | EXOTIC VISIONS

How to Cool a Planet (Maybe)

Photos: 1. Dr. Kenneth Coale/Moss Landing Marine Laboratories; 2. Victor Habbick Visions/Photo Researchers; 3. Left, Rina Castelnuovo for The New York Times; right, David Nunuk/Photo Researchers; 4. Diller & Scofidio

PROBLEMS AND EXPERIMENTS 1 Before-and-after images of plankton in an experiment that increased iron in the Pacific. 2 A large mirror that would shield Earth from the Sun. 3 A reservoir in a Palestinian village that is now covered with algae, potentially capturing carbon dioxide from the atmosphere, and a crater lake caused by a volcanic eruption. 4 An example of cloud production, the Blur Building by the architects Elizabeth Diller and Ricardo Scofidio, at the Swiss Expo in 2002.

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By WILLIAM J. BROADPublished: June 27, 2006

In the past few decades, a handful of scientists have come up with big, futuristic ways to fight global warming: Build sunshades in orbit to cool the planet. Tinker with clouds to make them reflect more sunlight back into space. Trick oceans into soaking up more heat-trapping greenhouse gases.

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Their proposals were relegated to the fringes of climate science. Few journals would publish them. Few government agencies would pay for feasibility studies. Environmentalists and mainstream scientists said the focus should be on reducing greenhouse gases and preventing global warming in the first place.

But now, in a major reversal, some of the world's most prominent scientists say the proposals deserve a serious look because of growing concerns about global warming.

Worried about a potential planetary crisis, these leaders are calling on governments and scientific groups to study exotic ways to reduce global warming, seeing them as possible fallback positions if the planet eventually needs a dose of emergency cooling.

"We should treat these ideas like any other research and get into the mind-set of taking them seriously," said Ralph J.

Cicerone, president of the National Academy of Sciences in Washington.

The plans and proposed studies are part of a controversial field known as geoengineering, which means rearranging the earth's environment on a large scale to suit human needs and promote habitability. Dr. Cicerone, an atmospheric chemist, will detail his arguments in favor of geoengineering studies in the August issue of the journal Climatic Change.

Practicing what he preaches, Dr. Cicerone is also encouraging leading scientists to join the geoengineering fray. In April, at his invitation, Roger P. Angel, a noted astronomer at the University of Arizona, spoke at the academy's annual meeting. Dr. Angel outlined a plan to put into orbit small lenses that would bend sunlight away from earth — trillions of lenses, he now calculates, each about two feet wide, extraordinarily thin and weighing little more than a butterfly.

In addition, Dr. Cicerone recently joined a bitter dispute over whether a Nobel laureate's geoengineering ideas should be aired, and he helped get them accepted for publication. The laureate, Paul J. Crutzen of the Max Planck Institute for Chemistry in Germany, is a star of atmospheric science who won his Nobel in 1995 for showing how industrial gases damage the earth's ozone shield. His paper newly examines the risks and benefits of trying to cool the planet by injecting sulfur into the stratosphere.

The paper "should not be taken as a license to go out and pollute," Dr. Cicerone said in an interview, emphasizing that most scientists thought curbing greenhouse gases should be the top priority. But he added, "In my opinion, he's written a brilliant paper."

Geoengineering is no magic bullet, Dr. Cicerone said. But done correctly, he added, it will act like an insurance policy if the world one day faces a crisis of overheating, with repercussions like melting icecaps, droughts, famines, rising sea levels and coastal flooding.

"A lot of us have been saying we don't like the idea" of geoengineering, he said. But he added, "We need to think about it" and learn, among other things, how to distinguish sound proposals from ones that are ineffectual or dangerous.

Many scientists still deride geoengineering as an irresponsible dream with more risks and potential bad side effects than benefits; they call its extreme remedies a good reason to redouble efforts at reducing heat-trapping gases like carbon dioxide. And skeptics of human-induced global warming dismiss geoengineering as a costly effort to battle a mirage.

Even so, many analysts say the prominence of its new advocates is giving the field greater visibility and credibility and adding to the likelihood that global leaders may one day consider taking such emergency steps.

"People used to say, 'Shut up, the world isn't ready for this,' " said Wallace S. Broecker, a geoengineering pioneer at Columbia. "Maybe the world has changed."

Michael C. MacCracken, chief scientist of the Climate Institute, a private research group in Washington, said he was resigned to the need to take geoengineering seriously.

"It's really too bad," Dr. MacCracken said, "that the United States and the world cannot do much more so that it's not necessary to consider getting addicted to one of these approaches."

Martin A. Apple, president of the Council of Scientific Society Presidents, said of geoengineering at a recent meeting in Washington, "Let's talk about research funding with enough zeroes on it so we can make a dent."

The study of futuristic countermeasures began quietly in the 1960's, as scientists theorized that global warming caused by human-generated emissions might one day pose a serious threat. But little happened until the 1980's, when global temperatures started to rise.

Some scientists noted that the earth reflected about 30 percent of incoming sunlight back into space and absorbed the rest. Slight increases of reflectivity, they reasoned, could easily counteract heat-trapping gases, thereby cooling the planet.

Dr. Broecker of Columbia proposed doing so by lacing the stratosphere with tons of sulfur dioxide, as erupting volcanoes occasionally do. The injections, he calculated in the 80's, would require a fleet of hundreds of jumbo jets and, as a byproduct, would increase acid rain.

By 1997, such futuristic visions found a prominent advocate in Edward Teller, a main inventor of the hydrogen bomb. "Injecting sunlight-scattering particles into the stratosphere appears to be a promising approach," Dr. Teller wrote in The Wall Street Journal. "Why not do that?"

But government agencies usually balked at paying researchers to study such far-out ideas, and even ones that were more down to earth. John Latham, an atmospheric physicist at the National Center for Atmospheric Research in Colorado, told how he and his colleagues had unsuccessfully sought for many years to test whether spraying saltwater mists into low ocean clouds might increase their reflectivity.

"We haven't found a way in," Dr. Latham said of government financing. "It's been a bit dispiriting."

Other plans called for reflective films to be laid over deserts or white plastic islands to be floated on the world's oceans, both as ways to reflect more sunlight into space.

Another idea was to fertilize the sea with iron, creating vast blooms of plants that would gulp down tons of carbon dioxide and, as the plants died, drag the carbon into the abyss.

The general reaction to such ideas, said Alvia Gaskill, president of Environmental Reference Materials Inc., a consulting firm in North Carolina that advocates geoengineering, "has been dismissive and sometimes frightened — afraid that we don't know what the consequences will be of making large-scale changes to the environment."

Dr. Gaskill said small experiments would let researchers quickly pull the plug if such tinkering started to go awry.

Critics of geoengineering argued that it made more sense to avoid global warming than to gamble on risky fixes. They called for reducing energy use, developing alternative sources of power and curbing greenhouse gases.

But international efforts like the Kyoto Protocol — which the United States never ratified, and which China and India as members of the developing world never had to obey, freeing the current and projected leaders in greenhouse gas emissions from its restrictions — have so far failed to diminish the threat. Scientists estimate that the earth's surface temperature this century may rise as much as 10 degrees Fahrenheit.

Geoengineering's advocates say humankind is already vastly altering the global environment and simply needs to do so more intelligently.

Dr. Angel, the University of Arizona astronomer, told members of the science academy of his idea for an orbital sunshade, calling the proposal less important than the goal of encouraging bold thought.

"This could engage a whole generation," he said in an interview. "All I'm saying is, let's start thinking about these kinds of things in case we need them one day." Such visionary plans are still far from winning universal acclaim. James E. Hansen of the NASA Goddard Institute for Space Studies in New York, who attended the talk and strongly advocates curbing emissions, belittled the orbital sunshade as "incredibly difficult and impractical."

Dr. Crutzen, the Nobel laureate from the Max Planck Institute, has also drawn fire for his paper about injecting sulfur into the stratosphere. "There was a passionate outcry by several prominent scientists claiming that it is irresponsible," recalled Mark G. Lawrence, an American scientist who is also at the institute.

The stratospheric plan called for fighting one kind of pollution (excess greenhouse gases like carbon dioxide) with another (sulfur dioxide), though it appeared that any increase in sulfur at the earth's surface would be small compared with the tons already being emitted from the smokestacks of coal-fueled plants.

Dr. Cicerone of the science academy helped broker a compromise: Dr. Crutzen's paper would be published, but with several commentaries, including his own. They will appear in the August issue of Climatic Change. The other authors are Dr. Lawrence of the German chemistry

institute, Dr. MacCracken of the Climate Institute, Jeffrey T. Kiehl of the National Center for Atmospheric Research, and Lennart Bengtsson of the Max Planck Institute for Meteorology in Germany.

In a draft of his paper, Dr. Crutzen estimates the annual cost of his sulfur proposal at up to $50 billion, or about 5 percent of the world's annual military spending.

"Climatic engineering, such as presented here, is the only option available to rapidly reduce temperature rises" if international efforts fail to curb greenhouse gases, Dr. Crutzen wrote.

"So far," he added, "there is little reason to be optimistic."

Andrew C. Revkin contributed reporting for this article.

THE ENERGY CHALLENGE

Boom in Ethanol Reshapes Economy of Heartland

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By ALEXEI BARRIONUEVOPublished: June 25, 2006

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David Bowser for The New York Times

In Hereford, a small town in the Texas Panhandle's cattle country, two companies are rushing to build plants to turn corn into fuel.

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Interactive Graphic: Fuel on the Cob Correction Appended

This article was reported by Alexei Barrionuevo, Simon Romero and Michael Janofsky and written by Mr. Barrionuevo.

Dozens of factories that turn corn into the gasoline substitute ethanol are sprouting up across the nation, from Tennessee to Kansas, and California, often in places hundreds of miles away from where corn is grown.

Once considered the green dream of the environmentally sensitive, ethanol has become the province of agricultural giants that have long pressed for its use as fuel, as well as newcomers seeking to cash in on a bonanza.

The modern-day gold rush is driven by a number of factors: generous government subsidies, surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100 percent profit in less than two years.

The rush is taking place despite concerns that large-scale diversion of agricultural resources to fuel could result in price increases for food for people and livestock, as well as the transformation of vast preserved areas into farmland.

Even in the small town of Hereford, in the middle of the Texas Panhandle's cattle country and hundreds of miles from the

agricultural heartland, two companies are rushing to build plants to turn corn into fuel.

As a result, Hereford has become a flashpoint in the ethanol boom that is helping to reshape part of rural America's economic base.

Despite continuing doubts about whether the fuel provides a genuine energy saving, at least 39 new ethanol plants are expected to be completed over the next 9 to 12 months, projects that will push the United States past Brazil as the world's largest ethanol producer.

The new plants will add 1.4 billion gallons a year, a 30 percent increase over current production of 4.6 billion gallons, according to Dan Basse, president of AgResources, an economic forecasting firm in Chicago. By 2008, analysts predict, ethanol output could reach 8 billion gallons a year.

For all its allure, though, there are hidden risks to the boom. Even as struggling local communities herald the expansion of this ethanol-industrial complex and politicians promote its use as a way to decrease America's energy dependence on foreign oil, the ethanol phenomenon is creating some unexpected jitters in crucial corners of farm country.

A few agricultural economists and food industry executives are quietly worrying that ethanol, at its current pace of development, could strain food supplies, raise costs for the livestock industry and force the use of marginal farmland in the search for ever more acres to plant corn.

"This is a bit like a gold rush," warned Warren R. Staley, the chief executive of Cargill, the multinational agricultural company based in Minnesota. "There are unintended consequences of this euphoria to expand ethanol production at this pace that people are not considering."

Mr. Staley has his own reasons to worry, because Cargill has a stake in keeping the price of corn low enough to supply its vast interests in processed food and livestock.

But many energy experts are also questioning the benefits of ethanol to the nation's fuel supply. While it is a renewable, domestically produced fuel that reduces gasoline pollution, large amounts of oil or natural gas go into making ethanol from corn, leaving its net contribution to reducing the use of fossil fuels much in doubt.

As one of the hottest investments around, however, few in farm country want to hear any complaints these days about the risks associated with ethanol. Archer Daniels Midland, the politically connected agricultural processing company in Decatur, Ill., and the industry leader that has been a longstanding champion of transforming corn into a fuel blend, has enjoyed a doubling in its stock price and profits in the last year.

One ethanol producer has already sold shares to the public and two more are planning to do so. And the get-rich-quick atmosphere has drawn in a range of investors, including small farm cooperatives, hedge funds and even Bill Gates.

For all the interest in ethanol, however, it is doubtful whether it can serve as the energy savior President Bush has identified. He has called for biofuels — which account for just 3 percent of total gasoline usage — to replace roughly 1.6 million barrels a day of oil imported from the Persian Gulf.

New Jobs, New Life

To fill that gap with corn-based ethanol alone, agricultural experts say that production would have to rise to more than 50 billion gallons a year; at least half the nation's farmland would need to be used to grow corn for fuel. But that isn't

stopping out-of-the-way towns looking for ways to pump life into local economies wracked by population loss, farm consolidation and low prices from treating the rush into ethanol as a godsend.

"These projects are bringing 100 new jobs to our town," said Don Cumpton, Hereford's director of economic development and a former football coach at the high school. "It's not as if Dell computer's going to be setting up shop here. We'd be nuts to turn something like this down."

That the United States is using corn, among the more expensive crops to grow and harvest, to help meet the country's fuel needs is a testament to the politics underlying ethanol's 30-year rise to prominence. Brazilian farmers produce ethanol from sugar at a cost roughly 30 percent less.

But in America's farm belt, politicians have backed the ethanol movement as a way to promote the use of corn, the nation's most plentiful and heavily subsidized crop. Those generous government subsidies have kept corn prices artificially low — at about $2 a bushel — and encouraged flat-out production by farmers, leading to large surpluses symbolized by golden corn piles towering next to grain silos in Iowa and Illinois.

While farmers are seeing little of the huge profits ethanol refiners like Archer Daniels Midland are banking, many farmers are investing in ethanol plants through cooperatives or simply benefiting from the rising demand for corn. With Iowa home to the nation's first presidential caucuses every four years, just about every candidate who visits the state pays obeisance to ethanol.

"There is zero daylight" between Democrats and Republicans in the region, said Ken Cook, president of Environmental Working Group, a nonprofit research policy group in Washington, and a veteran observer of agricultural politics.

"All incumbents and challengers in Midwestern farm country are by definition ethanolics."

The ethanol explosion began in the 1970's and 1980's, when ADM's chief executive, Dwayne O. Andreas, was a generous campaign contributor and well-known figure in the halls of Congress who helped push the idea of transforming corn into fuel.

Ethanol can be produced from a number of agricultural feed stocks, including corn and sugar cane, and someday, wheat and straw. But given the glut in corn, the early strategy of Mr. Andreas was to drum up interest in ethanol on the state level among corn farmers and persuade Washington to provide generous tax incentives. But in 1990, when Congress mandated the use of a supplement in gasoline to help limit emissions, ADM lost out to the oil industry, which won the right to use the cheaper methyl tertiary butyl ether, or MTBE, derived from natural gas, to fill the 10 percent fuel requirement.

Past Scandal

Adding to its woes, ADM was marred by scandal in 1996 when several company executives, including one of the sons of Mr. Andreas, were convicted of conspiracy to fix lysine markets. The company was fined $100 million. Since then, ADM's direct political clout in Washington may have waned a bit but it still pursues its policy preferences through a series of trade organizations, notably the Renewable Fuels Association.

Some 14 months ago the company hired Shannon Herzfeld, a leading lobbyist for the pharmaceutical industry. But she is not a registered lobbyist for ADM and said in an interview that the company was maintaining its long-held policy that it does not lobby Congress directly.

"Nobody is deferential to ADM," contended Ms. Herzfeld, who says she spends little time on Capitol Hill.

But ADM has not lost interest in promoting ethanol among farm organizations, politicians and the news media. It is by far the biggest beneficiary of more than $2 billion in government subsidies the ethanol industry receives each year, via a 51-cent-a-gallon tax credit given to refiners and blenders that mix ethanol into their gasoline. ADM will earn an estimated $1.3 billion from ethanol alone in the 2007 fiscal year, up from $556 million this year, said David Driscoll, a food manufacturing analyst at Citigroup.

[And the company may be concerned by the recent statement by Energy Secretary Samuel W. Bodman, who suggested that if prices remain high, lawmakers should consider ending the ethanol subsidy when it expires in 2010. "The question needs to be thought about," he said on Friday.]

ADM has huge production facilities that dwarf those of its competitors. With seven big plants, the company controls 1.1 billion gallons of ethanol production, or about 24 percent of the country's capacity. ADM can make more than four times what VeraSun, ADM's closest ethanol rival, can produce.

Last year, spurred by soaring energy prices, the ethanol lobby broke through in its long campaign to win acceptance outside the corn belt, inserting a provision in the Energy Policy Act of 2005 that calls for the use of 5 billion gallons a year of ethanol by 2007, growing to at least 7.5 billion gallons in 2012. The industry is now expected to produce about 6 billion gallons next year.

The phased removal of MTBE from gasoline, a result of concerns that the chemical contaminates groundwater and can lead to potential health problems, hastened the changeover. Now, government officials are also pushing for

increasing use of an 85-percent ethanol blend, called E85, which requires automakers to modify their engines and fuel injection systems.

In the ultimate nod to ADM's successful efforts, Mr. Bodman announced the new initiatives in February at the company's headquarters in Illinois.

"It's been 30 years since we got a call from the White House asking for the agriculture industry, ADM in particular, to take a serious look at the possibilities of building facilities to produce alternative sources of energy for our fuel supply in the United States," said G. Allen Andreas, ADM's chairman and Dwayne Andreas' nephew.

Now, ADM is betting even more of its future on ethanol, embracing a shift from food processing to energy production as its focus. In April, it hired Patricia A. Woertz, a former executive from the oil giant Chevron, as the company's new chief executive.

While ADM has pushed ethanol, rivals like Cargill have been more skeptical. To Mr. Staley, ethanol is overpromoted as a solution to the nation's energy challenges, and the growth in production, if unchecked, has the potential to ravage America's livestock industry and harm the nation's reliability as an exporter of corn and its byproducts.

Threat to Food Production

"Unless we have huge increases in productivity, we will have a huge problem with food production," Mr. Staley said. "And the world will have to make choices."

Last year corn production topped 11 billion bushels — second only to 2004's record harvest. But many analysts doubt

whether the scientists and farmers can keep up with the ethanol merchants.

"By the middle of 2007, there will be a food fight between the livestock industry and this biofuels or ethanol industry," Mr. Basse, the economic forecaster, said. "As the corn price reaches up above $3 a bushel, the livestock industry will be forced to raise prices or reduce their herds. At that point the U.S. consumer will start to see rising food prices or food inflation."

If that occurs, the battleground is likely to shift to some 35 million acres of land set aside under a 1985 program for conservation and to help prevent overproduction. Farmers are paid an annual subsidy averaging $48 an acre not to raise crops on the land. But the profit lure of ethanol could be great enough to push the acreage, much of it considered marginal, back into production.

Mr. Staley fears that could distract farmers from the traditional primary goal of agriculture, raising food for people and animals. "We have to look at the hierarchy of value for agricultural land use," he said in a May speech in Washington. "Food first, then feed" for livestock, "and last fuel."

And even Cargill is hedging its bets. It recently announced plans to nearly double its American ethanol capacity to 220 million gallons a year. Meanwhile, the flood of ethanol plant announcements is making the American livestock industry nervous about corn production. "I think we can keep up, assuming we get normal weather," said Greg Doud, the chief economist at the National Cattlemen's Beef Association. "But what happens when Mother Nature crosses us up and we get a bad corn year?"

Beyond improving corn yields, the greatest hope for ethanol lies with refining technology that can produce the fuel from

more efficient renewable resources, like a form of fuel called cellulosic ethanol from straw, switchgrass or even agricultural waste. While still years away, cellulosic ethanol could help overcome the concerns inherent in relying almost exclusively on corn to make ethanol and make the advance toward E85 that much quicker.

"The cost of the alternative — of staying addicted to oil and filling our atmosphere with greenhouse gases, and keeping other countries beholden to high gasoline prices — is unacceptable," said Nathanael Greene, senior policy analyst at the Natural Resources Defense Council in New York. "We have to struggle through the challenges of growing and producing biofuels in the right way."

But the current incentives to make ethanol from corn are too attractive for producers and investors to worry about the future. With oil prices at $70 a barrel sharply lifting the prices paid for ethanol, the average processing plant is earning a net profit of more than $5 a bushel on the corn it is buying for about $2 a bushel, Mr. Basse said. And that is before the 51-cent-a-gallon tax credit given to refiners and blenders that incorporate ethanol into their gasoline.

"It is truly yellow gold," Mr. Basse said.

Alexei Barrionuevo reported from Chicago for this article, Simon Romero from Hereford, Tex., and Michael Janofsky from Washington.

Correction: June 29, 2006 A front-page article on Sunday about the development of ethanol plants gave an incorrect spelling in some copies for the surname of the chief economist at the National Cattlemen's Beef Association, who is concerned about how the production of the biofuel could affect corn supplies. It is Gregg Doud, not Dowd. Because of an editing error, the article

referred imprecisely to plants in Fulton, N.Y., and Savannah, Ga., in some copies. They are in the planning stages; they are not yet operating.

A Range of Estimates on Ethanol's Benefits

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By ALEXEI BARRIONUEVOPublished: June 25, 2006

Would using ethanol save energy?

That question, it turns out, is not easy to answer. Ethanol's enthusiasts point to the potential benefits of replacing gasoline with a renewable energy source that they contend will reduce America's reliance on foreign oil and cut greenhouse gases produced by fossil fuels. But the benefits of ethanol, particularly when it is produced from corn, are not so clear cut.

A number of researchers who have looked at the issue have concluded that more energy now goes into making a gallon of ethanol than is contained in that gallon. Others, however, find a net benefit, though most see it as relatively modest.

Those who question whether ethanol is as "green" as advertised say that supporters ignore or downplay the large quantities of natural gas used to produce ethanol, as well as

the diesel fuel used to transport it from plants to markets. Moreover, growing corn requires heavy use of nitrogen fertilizers, made from natural gas, and requires extensive use of farm machinery, which burns fuel refined from crude oil.

Given the complexities of the calculations, there is a wide range of estimates of the benefits of ethanol.

On the positive side, analysts at the Agriculture Department concluded in their most recent assessment that ethanol offered a substantial gain, producing a positive output 67 percent greater than the energy inputs. But others who view ethanol favorably are more conservative, with several estimating the net energy benefit at about 20 percent.

David Pimentel, a professor of agriculture and life sciences at Cornell University, is one of several researchers who has challenged the Agriculture Department's conclusion. He has estimated that ethanol requires 29 percent more energy from fossil fuels than it delivers in savings from not using gasoline.

Dr. Pimentel, along with Tadeusz W. Patzek, a civil and environmental engineer from the University of California at Berkeley, published research finding that the Agriculture Department's analysis excluded the energy required to produce or repair farm machinery, as well as the steel and cement used to build the plants.

The Agriculture Department counters by noting that the professors failed to consider the energy benefit of certain ethanol byproducts, including corn oil and corn gluten, and said they were using old farm machinery data.

"They put all the energy on the ethanol," said Roger Conway, director of the department's office of energy policy and new uses.

The Agriculture Department also points to increases in corn yields, and efficiency improvements in the fertilizer and ethanol industries, which add to ethanol's energy benefit.

Dr. Pimentel acknowledged the omissions of some byproducts, saying they might have boosted the energy balance to as much as break even. But he said that even a best-case scenario, using his calculations, did not justify a heavy investment in ethanol. He called the push into ethanol a "boondoggle" motivated by farm-state politics and big profits.

Dr. Pimentel, who first began criticizing ethanol as an energy alternative about 25 years ago, said that he has never been supported by the oil industry. Dr. Patzek has worked as a researcher for an oil company in the past but said that his biofuels research had received no support from the industry.

Several environmental groups that support ethanol concede that the energy savings from corn-based ethanol may be limited, but they say it will serve as a crucial bridge to more efficient sources like switchgrass, a type of prairie grass that could potentially be used to produce ethanol.

The choice of what fuel to use to run an ethanol plant will also play a role in determining its ultimate energy efficiency. In Hereford, Tex., White Energy expects to use natural gas to power its ethanol plant, while another Dallas-based company, Panda Energy International, plans to use Hereford's ample supplies of cow manure as fuel.

Driven by the high cost of natural gas, about 10 of 39 ethanol plants under construction are being designed to run on coal, according to Robert McIlvaine, who runs a market research firm in Northfield, Ill.

Mr. Conway of the Agriculture Department called the move to cheaper and more abundant coal to run ethanol plants "preferable."

But Nathanael Greene, senior policy analyst at the Natural Resources Defense Council, which has supported ethanol's use, disagreed, pointing out that burning coal normally produces twice as much greenhouse gas as natural gas.

"This is going to significantly increase the local air pollution," Mr. Greene said, "and diminish the benefits of using ethanol."

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THE ENERGY CHALLENGE

Europe's Image Clashes With Reliance on Coal

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By MARK LANDLERPublished: June 20, 2006

SCHWARZE PUMPE, Germany — In the shadow of two hulking boilers, which spew 10 million tons of carbon dioxide a year into the air, the Swedish owners of this coal-fired power station recently broke ground on what is to be the world's first carbon-free plant fueled by coal. The German chancellor, Angela Merkel, presided over the ceremony.

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Matthias Rietschel for The New York Times

The power plant in Schwarze Pumpe, Germany, operated by Vattenfall. The company is building a carbon-free plant, but only as a demonstration model. Germany plans eight new coal-fired power plants over the next five years.

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"We accept the problem of climate change," said Reinhardt Hassa, a senior executive at Vattenfall, which operates the plant. "If we want a future for coal, we have to adopt new technologies. It is not enough just to make incremental improvements."

But the new plant, which will be just a demonstration model, pales next to the eight coal-fired power stations Germany plans to build for commercial use between from now to 2011 — none of them carbon-free.

"That is really a disappointing track record," said Stephan Singer, the director of climate and energy policy at the World Wide Fund for Nature in Brussels. "Just replacing old coal plants with new coal plants won't enable Germany to meet stricter carbon emission targets."

Europe likes to think of itself as a place that has moved beyond its sooty industrial past, with energy that comes from the windmills that dot the Dutch countryside and the Danish coastline or the carbon-free nuclear plants that dominate France's power industry.

But with oil prices soaring and worries rising about the reliability of gas piped from Russia, Europe must depend heavily on that great industrial-age relic, coal: a cheap, plentiful fuel, but one that emits twice the carbon dioxide of natural gas. Coal-fired plants generated half the power in Germany and Britain during the chilly winter just past.

While Europeans stand out for their commitment to controlling global warming gases, some of their largest energy companies are reluctant to invest in technologies that could further protect the environment, like equipment in the demonstration plant here that will trap carbon dioxide and pump it into underground storage areas. Only a handful of carbon-free plants are planned in the European Union.

There is another downside to coal, evident barely a mile from the plant here. Bulldozers have begun demolishing a 450-year-old mill town, which blocks the path of the open-pit mine that supplies coal to the plant. The last residents are being forced

to pack their belongings and abandon their homes for a new settlement nearby.

Such uprooting is an unavoidable cost of Europe's hunger for coal, executives here say. They also say the technology to capture carbon dioxide is too costly, at a time when they are already spending billions of euros to replace Europe's aging power plants. Finding places to store the carbon dioxide is a headache in countries like Germany, which are densely populated and have a history of protesting against the storage of more troublesome pollutants like nuclear waste.

In Europe, where power companies say they have cleaned up the visible pollutants — like sulfur dioxide -- from their coal plants more diligently than their American counterparts, some executives are suspicious of current proposals to convert to "clean coal" technology.

They describe them as mainly public relations ploys championed by the Bush administration and American power companies, even as only a few plants that capture and sequester carbon dioxide are actually planned for the United States. They suspect the Americans are trying to circumvent mandatory cuts in carbon emissions and avoid making steady improvements in the efficiency of their plants.

"There's a lot of media-driven talk," said Alfred Tacke, chief executive of Steag, Germany's fifth-largest power generator, which has eight coal plants scattered in the Rhine, Ruhr and Saar regions.

"In the United States, you defer all investments, because in the future maybe you have the perfect solution," said Mr. Tacke, who was deputy economics minister under the previous German chancellor, Gerhard Schröder. "I would prefer a solution that improves the situation now."

By that, Mr. Tacke means using existing technology like raising the temperature or pressure of the steam that turns the turbine, to make conventional coal plants more efficient. Steag is building such a plant in the Ruhr city of Duisburg — a $1 billion project that, he says, will be more efficient than any rival in the United States.

The debate over coal in the European Union has to be seen within the context of the Kyoto Protocol, a global climate-control agreement that commits Germany and 34 other nations to measurable reductions in emissions of carbon dioxide and several other greenhouse gases.

With a legal imperative to cut emissions by up to a fifth within the next six years, power companies here face a clearer challenge than those in non-Kyoto countries, like the United States or China.

Yet while the Kyoto pact has focused minds, environmental advocates say it has not yet pushed companies far enough. In 2005, without any extraordinary effort, emissions of carbon dioxide in Germany, Britain and other countries actually came in below the caps set by national governments in the first phase of the Kyoto process, which runs from 2005 to 2007.

This, critics said, suggests that the reductions were not tough enough; much of the improvements were simply a natural outgrowth of slow economic growth and the closing of outdated coal operations. Britain and Germany both pledged to impose deeper cuts in the next phase, which starts in 2008 and runs through 2012.

"It's true that the first phase of emissions reductions are not that challenging," said Daniel Lashof, deputy director of the climate center at the Natural Resources Defense Council in Washington. "Europe can make its targets with only incremental improvements."

Though Europeans are united in their concern about global warming, they have a patchwork of energy policies. Some countries, like Germany and Poland, remain heavily dependent on coal, while others, like France and Finland, are redoubling their investment in nuclear power. Italy and Spain use a lot of oil and gas, though Italy is converting some oil-fired plants to coal.

The recent spike in the price of oil has thrown the spotlight back on coal, even in places like Britain, where the industry had been in a death spiral for decades. Richard Budge, a longtime British coal executive, has announced plans to reopen a colliery in South Yorkshire. With financing from Russian investors, he also hopes to build a $1.5 billion power plant on the site, equipped with technology to capture and store carbon dioxide.

After years in disrepute, coal is still struggling for public acceptance in Britain. The government is drafting a new energy policy that is expected to stress windmills and other renewable energy sources.

But economic and geopolitical realities, Mr. Budge said, make a bigger role for coal inevitable. "Wind farms only work one day in three, and nobody knows which day," he said, with only a hint of exaggeration, in a telephone interview.

Coal, he noted, is not a hostage to politics. When Russia abruptly switched off its natural gas pipeline to Ukraine in January over a pricing dispute, gas supplies dwindled all over Western Europe. To Germany and other gas importers, it was a chilling reminder of their vulnerability.

"Fifty-eight percent of the world's gas is owned by Russia, Iran and Qatar," Mr. Budge said. "Coal is on every continent."

Here in eastern Germany, vast deposits of brown coal, also known as lignite, lurk beneath the table-flat countryside. There are similar deposits in the Rhine and Ruhr valleys in the west. Though Germany has been mining in these regions for decades, the supply is far from exhausted.

So great is the demand that the government allows companies to forcibly resettle villages that lie in the path of their excavators. The process is costly and litigious and can take more than a decade.

"This is a very difficult issue for us," Mr. Hassa said, noting that Vattenfall has begun negotiating with 230 residents of a village next to a mine, for a relocation that would not happen until 2018.

Haidemühle, the village being swallowed by the Schwarze Pumpe mine, acquiesced to relocation fairly quietly. Among the few holdouts was Heinz Attula, 84, who said Vattenfall did not pay him enough for his property. But even he was ready to move to a new home provided by the company.

"It's not an easy step," Mr. Attula said, as he walked his dog past deserted houses and a ghostly schoolyard recently. "I've lived my whole life in this town. But I know the mining must go on."

The economic forces are getting harder to resist. Coal is Germany's main generator of electricity, and the government plans to phase out the next largest source, nuclear power, by 2021. Though use of natural gas is growing — Germany and Russia are jointly building a pipeline under the Baltic Sea — last winter's cut-off left a bad taste in Berlin.

"This really changed the thinking of politicians and economists," said Johannes F. Lambertz, a member of the management board of RWE Power, the No. 1 electricity

generator in Germany and No. 3 in Britain. "People now talk about competitiveness and security together."

Coal is the bedrock of RWE's business, and its strategy illustrates the tension between environmental progress and the status quo. The company is expanding its huge BoA plant in the Rhine valley, which uses brown coal, and it plans a new black, or hard, coal plant, east of the Ruhr valley. Neither, at least initially, will be equipped to capture and store carbon dioxide.

Long viewed as a holdout, RWE recently surprised competitors by announcing its first carbon-free plant, scheduled to go into service in 2014. The $1.2 billion project would have a capacity of 450 megawatts, more than ten times that of the pilot plant in Schwarze Pumpe.

"We have to be prepared for a scenario in which carbon emission reductions are much greater than today," Mr. Lambertz said in an interview at RWE Power's headquarters in Cologne. "We have to keep all our options open since we face an uncertain future."

With so few details and such a long timetable, critics said the announcement was a public relations maneuver, at a time when the German government is setting the next stage of emissions reduction targets.

"Last year, RWE said it was skeptical about a carbon-free plant before 2015," said Brian Ricketts, a coal industry analyst at the International Energy Agency in Paris. "It's a game between industry and government."

While Europe's longer-term reductions in emissions are still undecided, there is a general agreement that they will have to be radical — if only to compensate for the additional

greenhouse gases being generated by China and India, to say nothing of the United States.

The plant at Schwarze Pumpe shows how European industry is adapting to this future. Originally built in 1955 by East German Communists, it was equipped with the best technology then available. But it still contributed to East Germany's reputation for horrendous pollution.

The town's name translates as "black pump," and outsiders regularly assume it refers to its pollution record. Actually it stems from a tale that in the Thirty Years' War of the 1600's, townspeople painted their pump black to trick invaders into thinking the water was infected with the plague.

After German reunification in 1990, the government opted to replace the Schwarze Pumpe plant. The new one, opened in 1998, is equipped with filters and scrubbers that reduced sulfur dioxide emissions by 91 percent, nitrogen oxide by 61 percent, and almost completely eliminated dust. Carbon dioxide emissions were reduced only 31 percent, however.

Vattenfall's carbon-free plant will burn the coal in an atmosphere of pure oxygen and recirculated gas. Three quarters of the carbon dioxide produced by the burning is recycled back into the boiler. What remains is pressurized into a liquid-gas mixture and injected underground. Mr. Hassa said it was no accident that a Swedish company was on the vanguard of this effort. "The Swedish philosophy is different than the German philosophy," he said. "Climate change and environmental protection are more deeply rooted in Swedish society than in German society."

Vattenfall concedes it will not be able to produce carbon-free electricity on a large scale until at least 2015. Still, it says it has little choice but to start now. "In the long run," said a

spokesman, Martin May, "we'll have to reduce emissions by 60 percent to 70 percent."

THE ENERGY CHALLENGE

Pollution From Chinese Coal Casts a Global Shadow

Chang W. Lee/The New York Times

Coal has given parts of China a Dickensian feel, with miners coated with black soot and air that is thick with pollution.

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By KEITH BRADSHER and DAVID BARBOZAPublished: June 11, 2006

HANJING, China — One of China's lesser-known exports is a dangerous brew of soot, toxic chemicals and climate-changing gases from the smokestacks of coal-burning power plants.

The Energy ChallengeThe Cost of Coal

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Video: China's Dark Clouds

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Chang W. Lee/The New York Times

Coal-burning factories like the Gu Dian steel plant have given Shanxi Province in China a Dickensian feel.

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Chang W. Lee/The New York Times

The Er Pu coal mine in Shanxi Province, China. Coal use in China exceeds that of the United States, the European Union and Japan combined.

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Chang W. Lee/The New York Times

Wu Yiebing, seated left, with his wife, Cao Waiping, right, their daughter, Wu Caoying, far left, and a family friend, center. Coal has given the family as much electricity as it needs, but a smog of sulfur particles hovers above their small town.

Chang W. Lee/The New York Times

In Shanxi Province houses are coated with soot, miners' faces are smeared almost entirely black, and air is thick with the smell of burning coal.

Chang W. Lee/The New York Times

Pollution from China will contribute to a big increase in global warming.

In early April, a dense cloud of pollutants over Northern China sailed to nearby Seoul, sweeping along dust and desert sand before wafting across the Pacific. An American satellite spotted the cloud as it crossed the West Coast.

Researchers in California, Oregon and Washington noticed specks of sulfur compounds, carbon and other byproducts of coal combustion coating the silvery surfaces of their mountaintop detectors. These microscopic particles can work their way deep into the lungs, contributing to respiratory damage, heart disease and cancer.

Filters near Lake Tahoe in the mountains of eastern California "are the darkest that we've seen" outside smoggy urban areas, said Steven S. Cliff, an atmospheric scientist at the University of California at Davis.

Unless China finds a way to clean up its coal plants and the thousands of factories that burn coal, pollution will soar both at home and abroad. The increase in global-warming gases from China's coal use will probably exceed that for all industrialized countries combined over the next 25 years, surpassing by five times the reduction in such emissions that the Kyoto Protocol seeks.

The sulfur dioxide produced in coal combustion poses an immediate threat to the health of China's citizens,

contributing to about 400,000 premature deaths a year. It also causes acid rain that poisons lakes, rivers, forests and crops.

The sulfur pollution is so pervasive as to have an extraordinary side effect that is helping the rest of the world, but only temporarily: It actually slows global warming. The tiny, airborne particles deflect the sun's hot rays back into space.

But the cooling effect from sulfur is short-lived. By contrast, the carbon dioxide emanating from Chinese coal plants will last for decades, with a cumulative warming effect that will eventually overwhelm the cooling from sulfur and deliver another large kick to global warming, climate scientists say. A warmer climate could lead to rising sea levels, the spread of tropical diseases in previously temperate climes, crop failures in some regions and the extinction of many plant and animal species, especially those in polar or alpine areas.

Coal is indeed China's double-edged sword — the new economy's black gold and the fragile environment's dark cloud.

Already, China uses more coal than the United States, the European Union and Japan combined. And it has increased coal consumption 14 percent in each of the past two years in the broadest industrialization ever. Every week to 10 days, another coal-fired power plant opens somewhere in China that is big enough to serve all the households in Dallas or San Diego.

To make matters worse, India is right behind China in stepping up its construction of coal-fired power plants — and has a population expected to outstrip China's by 2030.

Aware of the country's growing reliance on coal and of the dangers from burning so much of it, China's leaders have

vowed to improve the nation's energy efficiency. No one thinks that effort will be enough. To make a big improvement in emissions of global-warming gases and other pollutants, the country must install the most modern equipment — equipment that for the time being must come from other nations.

Industrialized countries could help by providing loans or grants, as the Japanese government and the World Bank have done, or by sharing technology. But Chinese utilities have in the past preferred to buy cheap but often-antiquated equipment from well connected domestic suppliers instead of importing costlier gear from the West.

The Chinese government has been reluctant to approve the extra spending. Asking customers to shoulder the bill would set back the government's efforts to protect consumers from inflation and to create jobs and social stability.

But each year China defers buying advanced technology, older equipment goes into scores of new coal-fired plants with a lifespan of up to 75 years.

"This is the great challenge they have to face," said David Moskovitz, an energy consultant who advises the Chinese government. "How can they continue their rapid growth without plunging the environment into the abyss?"

Living Better With Coal

Wu Yiebing and his wife, Cao Waiping, used to have very little effect on their environment. But they have tasted the rising standard of living from coal-generated electricity and they are hooked, even as they suffer the vivid effects of the damage their new lifestyle creates.

Years ago, the mountain village where they grew up had electricity for only several hours each evening, when water

was let out of a nearby dam to turn a small turbine. They lived in a mud hut, farmed by hand from dawn to dusk on hillside terraces too small for tractors, and ate almost nothing but rice on an income of $25 a month.

Today, they live here in Hanjing, a small town in central China where Mr. Wu earns nearly $200 a month. He operates a large electric drill 600 feet underground in a coal mine, digging out the fuel that has powered his own family's advancement. He and his wife have a stereo, a refrigerator, a television, an electric fan, a phone and light bulbs, paying just $2.50 a month for all the electricity they can burn from a nearby coal-fired power plant.

They occupy a snug house with brick walls and floors and a cement foundation — the bricks and cement are products of the smoking, energy-ravenous factories that dot the valley. Ms. Cao decorates the family's home with calendar pictures of Zhang Ziyi, the Chinese film star. She is occasionally dismissive about the farming village where she lived as a girl and now seldom visits except over Chinese New Year.

"We couldn't wear high heels then because the paths were so bad and we were always carrying heavy loads," said Ms. Cao, who was wearing makeup, a stylish yellow pullover, low-slung black pants and black pumps with slender three-inch heels on a recent Sunday morning.

One-fifth of the world's population already lives in affluent countries with lots of air-conditioning, refrigerators and other appliances. This group consumes a tremendous amount of oil, natural gas, nuclear power, coal and alternative energy sources.

Now China is trying to bring its fifth of the world's population, people like Mr. Wu and Ms. Cao, up to the same standard.

One goal is to build urban communities for 300 million people over the next two decades.

Already, China has more than tripled the number of air-conditioners in the past five years, to 84 per 100 urban households. And it has brought modern appliances to hundreds of millions of households in small towns and villages like Hanjing.

The difference from most wealthy countries is that China depends overwhelmingly on coal. And using coal to produce electricity and run factories generates more global-warming gases and lung-damaging pollutants than relying on oil or gas.

Indeed, the Wu family dislikes the light gray smog of sulfur particles and other pollutants that darkens the sky and dulls the dark green fields of young wheat and the white blossoms of peach orchards in the distance. But they tolerate the pollution.

"Everything else is better here," Mr. Wu said. "Now we live better, we eat better."

China's Dark Clouds

Large areas of North-Central China have been devastated by the spectacular growth of the local coal industry. Severe pollution extends across Shaanxi Province, where the Wus live, and neighboring Shanxi Province, which produces even more coal.

Not long ago, in the historic city of Datong, about 160 miles west of Beijing, throngs of children in colorful outfits formed a ceremonial line at the entrance to the city's 1,500-year-old complex of Buddhist cave grottoes to celebrate Datong's new designation as one of China's "spiritually civilized cities."

The event was meant to bolster pride in a city desperately in need of good news. Two years ago, Datong, long the nation's coal capital, was branded one of the world's most-polluted cities. Since then, the air quality has only grown worse.

Datong is so bad that last winter the city's air quality monitors went on red alert. Desert dust and particulate matter in the city had been known to force the pollution index into warning territory, above 300, which means people should stay indoors.

On Dec. 28, the index hit 350.

"The pollution is worst during the winter," said Ji Youping, a former coal miner who now works with a local environmental protection agency. "Datong gets very black. Even during the daytime, people drive with their lights on."

Of China's 10 most polluted cities, four, including Datong, are in Shanxi Province. The coal-mining operations have damaged waterways and scarred the land. Because of intense underground mining, thousands of acres are prone to sinking, and hundreds of villages are blackened with coal waste.

There is a Dickensian feel to much of the region. Roads are covered in coal tar; houses are coated with soot; miners, their faces smeared almost entirely black, haul carts full of coal rocks; the air is thick with the smell of burning coal.

There are growing concerns about the impact of this coal boom on the environment. The Asian Development Bank says it is financing pollution control programs in Shanxi because the number of people suffering from lung cancer and other respiratory diseases in the province has soared over the past 20 years. Yet even after years of government-mandated cleanup efforts the region's factories belch black smoke.

The government has promised to close the foulest factories and to shutter thousands of illegal mines, where some of the worst safety and environmental hazards are concentrated. But no one is talking about shutting the region's coal-burning power plants, which account for more than half the pollution. In fact, Shanxi and Shaanxi are rapidly building new coal-fired plants to keep pace with soaring energy demand.

To meet that demand, which includes burning coal to supply power to Beijing, Shanxi Province alone is expected to produce almost as much coal as was mined last year in Germany, England and Russia combined.

Burning all that coal releases enormous quantities of sulfur.

"Sulfur dioxide is China's No. 1 pollution problem," said Barbara A. Finamore, a senior attorney at the Natural Resources Defense Council's China Clean Energy Program in Washington. "This is the most serious acid rain problem in the world."

China released about 22.5 million tons of sulfur in 2004, more than twice the amount released in the United States, and a Chinese regulator publicly estimated last autumn that emissions would reach 26 million tons for 2005, although no official figures have been released yet. Acid rain now falls on 30 percent of China.

Studies have found that the worst effects of acid rain and other pollution occur within several hundred miles of a power plant, where the extra acidity of rainfall can poison crops, trees and lakes alike.

But China is generating such enormous quantities of pollution that the effects are felt farther downwind than usual. Sulfur and ash that make breathing a hazard are being carried by the wind to South Korea, Japan and beyond.

Not enough of the Chinese emissions reach the United States to have an appreciable effect on acid rain yet. But, they are already having an effect in the mountains in West Coast states. These particles are dense enough that, at maximum levels during the spring, they account at higher altitudes for a fifth or more of the maximum levels of particles allowed by the latest federal air quality standards. Over the course of a year, Chinese pollution averages 10 to 15 percent of allowable levels of particles. The amounts are smaller for lower-lying cities, like Seattle, San Francisco and Los Angeles.

China is also the world's largest emitter of mercury, which has been linked to fetal and child development problems, said Dan Jaffe, an atmospheric scientist at the University of Washington.

Unless Chinese regulators become much more aggressive over the next few years, considerably more emissions could reach the United States. Chinese pollution is already starting to make it harder and more expensive for West Coast cities to meet stringent air quality standards, said Professor Cliff of the University of California, slowing four decades of progress toward cleaner air.

Nothing Beats It

China knows it has to do something about its dependence on coal.

The government has set one of the world's most ambitious targets for energy conservation: to cut the average amount of energy needed to produce each good or service by 20 percent over the next five years. But with an economy growing 10 percent a year and with energy consumption climbing even faster, a conservation target amounting to 3.7 percent a year does not keep pace.

All new cars, minivans and sport utility vehicles sold in China starting July 1 will have to meet fuel-economy standards stricter than those in the United States. New construction codes encourage the use of double-glazed windows to reduce air-conditioning and heating costs and high-tech light bulbs that produce more light with fewer watts.

Meanwhile, other sources of energy have problems. Oil is at about $70 a barrel. Natural gas is in short supply in most of China, and prices for imports of liquefied natural gas have more than doubled in the last three years. Environmental objections are slowing the construction of hydroelectric dams on China's few untamed rivers. Long construction times for nuclear power plants make them a poor solution to addressing blackouts and other power shortages now.

For the past three years, China has also been trying harder to develop other alternatives. State-owned power companies have been building enormous wind turbines up and down the coast. Chinese companies are also trying to develop geothermal energy, tapping the heat of underground rocks, and are researching solar power and ways to turn coal into diesel fuel. But all of these measures fall well short. Coal remains the obvious choice to continue supplying almost two-thirds of China's energy needs.

Choices and Consequences

China must make some difficult choices. So far, the nation has been making decisions that it hopes will lessen the health-damaging impact on its own country while sustaining economic growth as cheaply as possible. But those decisions will also add to the emissions that contribute to global warming.

The first big choice involves tackling sulfur dioxide. The government is now requiring that the smokestacks of all new

coal-fired plants be fitted with devices long used in Western power plants to remove up to 95 percent of the sulfur. All existing coal-fired plants in China are supposed to have the devices installed by 2010.

While acknowledging that they have missed deadlines, Chinese officials insist they have the capacity now to install sulfur filters on every power plant smokestack. "I don't think there will be a problem reaching this target before 2010," said Liu Deyou, chief engineer at the Beijing SPC Environment Protection Tech Engineering Company, the sulfur-filter manufacturing arm of one of the five big, state-owned utilities.

Japan may be 1,000 miles east of Shanxi Province, but the Japanese government is so concerned about acid rain from China that it has agreed to lend $125 million to Shanxi. The money will help pay for desulfurization equipment for large, coal-fired steel plants in the provincial capital, Taiyuan.

The question is how much the state-owned power companies will actually use the pollution control equipment once it is installed. The equipment is costly to maintain and uses enormous amounts of electricity that could instead be sold to consumers. Moreover, regulated electricity tariffs offer little reward for them to run the equipment.

In 2002, the Chinese government vowed to cut sulfur emissions by 10 percent by 2005. Instead, they rose 27 percent. If Chinese officials act swiftly, sulfur emissions could be halved in the next couple of decades, power officials and academic experts say. But if China continues to do little, sulfur emissions could double, creating even more devastating health and environmental problems.

Even so, halving sulfur emissions has its own consequences: it would make global warming noticeable sooner.

China contributes one-sixth of the world's sulfur pollution. Together with the emissions from various other countries, those from China seem to offset more than one-third of the warming effect from manmade carbon dioxide already in the atmosphere, according to several climate models.

But the sulfur particles typically drift to the ground in a week and stop reflecting much sunlight. Recent research suggests that it takes up to 10 years before a new coal-fired power plant has poured enough long-lasting carbon dioxide into the air to offset the cooling effect of the plant's weekly sulfur emissions.

Climate experts say that, ideally, China would cut emissions of sulfur and carbon dioxide at the same time. But they understand China's imperative to clean up sulfur more quickly because it has a far more immediate effect on health.

"It's sort of unethical to expect people not to clean up their air quality for the sake of the climate," said Tami Bond, an atmospheric scientist at the University of Illinois at Urbana-Champaign.

The Hunt for Efficiency

The second big decision facing China lies in how efficiently the heat from burning coal is converted into electricity. The latest big power plants in Western countries are much more efficient. Their coal-heated steam at very high temperatures and pressures can generate 20 to 50 percent more kilowatts than older Chinese power plants, even as they eject the same carbon-dioxide emissions and potentially lower sulfur emissions.

China has limited the construction of small power plants, which are inefficient, and has required the use of somewhat higher steam temperatures and pressures. But Chinese

officials say few new plants use the highest temperatures and pressures, which require costly imported equipment.

And Chinese power utilities are facing a squeeze. The government has kept electricity cheap, by international standards, to keep consumers happy. But this has made it hard for utilities to cover their costs, especially as world coal prices rise.

The government has tried to help by limiting what mines can charge utilities for coal. Mines have responded by shipping the lowest-quality, dirtiest, most-contaminated coal to power plants, say power and coal executives. The utilities have also been reluctant to spend on foreign equipment, steering contracts to affiliates instead.

"When you have a 1 percent or less profit," said Harley Seyedin, chief executive of the First Washington Group, owner of oil-fired power plants in Southeastern China's Guangdong Province, "you don't have the cash flow to invest or to expand in a reasonable way."

A New Technology

The third big choice involves whether to pulverize coal and then burn the powder, as is done now, or convert the coal into a gas and then burn the gas, in a process known as integrated gasification combined combustion, or I.G.C.C.

One advantage of this approach is that coal contaminants like mercury and sulfur can be easily filtered from the gas and disposed. Another advantage is that carbon dioxide can be separated from the emissions and pumped underground, although this technology remains unproven.

Leading climate scientists like this approach to dealing with China's rising coal consumption. "There's a whole range of

things that can be done; we should try to deploy coal gasification," said Dr. Rajendra K. Pachauri, chairman of the United Nations-affiliated Intergovernmental Panel on Climate Change.

The World Bank in 2003 offered a $15 million grant from the Global Environment Facility to help China build its first state-of-the-art power plant to convert coal into a gas before burning it. The plan called for pumping combustion byproducts from the plant underground.

But the Chinese government put the plan on hold after bids to build the plant were higher than expected. Chinese officials have expressed an interest this spring in building five or six power plants with the new technology instead of just one. But they are in danger of losing the original grant if they do not take some action soon, said Zhao Jian-ping, the senior energy specialist in the Beijing office of the World Bank.

Another stumbling block has been that China wants foreign manufacturers to transfer technological secrets to Chinese rivals, instead of simply filling orders to import equipment, said Anil Terway, director of the East Asia energy division at the Asian Development Bank.

"The fact that they are keen to have the technologies along with the equipment is slowing things down," he said.

Andy Solem, vice president for China infrastructure at General Electric, a leading manufacturer of coal gasification equipment, said he believed that China would place orders in 2007 or 2008 for the construction of a series of these plants. But he said some technology transfer was unavoidable.

Western companies could help Chinese businesses take steps to reduce carbon-dioxide emissions, like subsidizing the purchase of more efficient boilers. Some companies already

have such programs in other countries, to offset the environmental consequences of their own carbon-dioxide emissions at home, and are looking at similar projects in China. But the scale of emissions in China to offset is enormous.

For all the worries about pollution from China, international climate experts are loath to criticize the country without pointing out that the average American still consumes more energy and is responsible for the release of 10 times as much carbon dioxide as the average Chinese. While China now generates more electricity from coal than does the United States, America's consumption of gasoline dwarfs China's, and burning gasoline also releases carbon dioxide.

An Insatiable Demand?

The Chinese are still far from achieving what has become the basic standard in the West. Urban elites who can afford condominiums are still a tiny fraction of China's population. But these urban elites are role models with a lifestyle sought by hundreds of millions of Chinese. Plush condos on sale in Shanghai are just a step toward an Americanized lifestyle that is becoming possible in the nation's showcase city.

Far from the Wu family in rural Shaanxi, the Lu Bei family grew up in cramped, one-room apartments in Shanghai. Now the couple own a large three-bedroom apartment in the city's futuristic Pudong financial district. They have two television sets, four air-conditioners, a microwave, a dishwasher, a washing machine and three computers. They also have high-speed Internet access.

"This is my bedroom," said Lu Bei, a 35-year-old insurance agency worker entering a spacious room with a king-size bed. "We moved here two years ago. We had a baby and wanted a decent place to live."

For millions of Chinese to live like the Lus with less damage to the environment, energy conservation is crucial. But curbing that usage would be impossible as long as China keeps energy prices low. Gasoline still costs $2 a gallon, for example, and electricity is similarly cheap for many users.

With Chinese leaders under constant pressure to create jobs for the millions of workers flooding from farms into cities each year, as well as the rapidly growing ranks of college graduates, there has been little enthusiasm for a change of strategy.

Indeed, China is using subsidies to make its energy even cheaper, a strategy that is not unfamiliar to Americans, said Kenneth Lieberthal, a China specialist at the University of Michigan. "They have done in many ways," he said, "what we have done."

Keith Bradsher reported from Hanjing and Guangzhou, China, for this article and David Barboza from Datong and Shanghai.

The Greener Guys

Timberland

Efforts to combat global warming include these solar panels at a Timberland plant.

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By JAD MOUAWADPublished: May 30, 2006

When Timberland, the outdoor clothing company, studied ways to reduce its carbon emissions four years ago, it weighed several options: building a wind farm in the Dominican Republic, buying power generated by renewable resources and setting up a vast bank of solar panels at one of its distribution centers in Ontario, Calif.

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It chose to do all those things, but that was the easy part. When Jeffrey B. Swartz, Timberland's president and chief executive, considered how much carbon dioxide was produced in making leather for the company's famous boots, the answer came as a surprise.

"As it turns out, the vast majority of the greenhouse gases associated with manufacturing leather comes from cows in the field," Mr. Swartz said. "Yes, methane."

While Timberland figures out how to reduce these emissions — it is examining ways to change the feed for cows — the company has already cut its greenhouse gases by 17 percent from their 2002 level and aims to become carbon-neutral by 2010 by offsetting its emissions through renewable or alternative energy sources.

Americans are increasingly recognizing that the effects of carbon emissions on global warming are a serious problem, but there are no rules in the United States regulating heat-trapping gases comparable to those that most other developed countries have adopted under the Kyoto Protocol. Some United States businesses, though, are responding for a variety of reasons anyway: to satisfy customers or shareholders who worry about the environment, to improve their public image or to drive down their energy costs. In addition, some states and local authorities have stepped in to try to curb their contributions to global warming.

For Timberland, while it shares the concerns over global warming, it's mostly a matter of dollars and cents. As Mr. Swartz put it: "What idiot will leave costs on the table? I hope it's our competitors. I get paid to create value."

But reducing carbon emissions is no easy task.

Scientists, economists, environmentalists and a growing rank of business leaders warn that corporate America needs to move more quickly or it will face the consequences: higher energy prices, a potential cost for carbon pollution and, eventually, products that will have trouble competing globally because other countries are reducing emissions.

The United States is responsible for a quarter of all the carbon dioxide sent into the atmosphere each year. It has not ratified the Kyoto Protocol, the treaty on climate change that went into effect last year for more than three dozen countries in Europe and elsewhere, that set targets and timetables for cutting emissions.

If consumption of fossil fuels continues at today's pace, the Energy Department predicts that carbon emissions in the United States could rise to more than eight billion tons by 2030 — 38 percent above current levels — as energy use keeps growing.

"This is a huge challenge for American businesses, particularly those trying to compete internationally," said Adam Markham, executive director of Clean Air-Cool Planet, an advocacy group in Portsmouth, N.H. "Most of the rest of the developing world has a legislative mandate to curb emissions, but in the United States, in many cases, there is no real reason for companies to act."

Many analysts predict that the United States will eventually set rules limiting greenhouse emissions. Then, carbon pollution will turn into a cost of doing business.

In Europe, for example, companies that go over their emission limits must buy carbon credits to comply. Under the continent-wide trading system, the cost of a carbon credit reached a high of 30.5 euros for each metric ton, or about $39, last month. (In the last month, prices have dropped by half as many power plants reported much lower emissions than expected.)

But only 86 companies in the United States, accounting for 8 percent of domestic carbon emissions, have enrolled in Climate Leaders, the Environmental Protection Agency's voluntary program to cut emissions. Emissions in the United States have risen 16 percent since 1990, the agency said.

"There is certainly a lot of inertia in the economy, and many companies have their heads in the sand, wishing and hoping that somehow the overwhelming consensus among scientists is going to go away," said Alan Nogee, director of the clean energy program at the Union of Concerned Scientists, based in Cambridge, Mass. But it's not. And ultimately their shareholders and customers are likely to pay a price. The reality is that carbon regulation is coming inevitably to the United States, as it has to the rest of the world."

Freezing emissions at today's levels will not solve global warming. Experts say that large reductions in global emissions — 50 percent or more by 2050 — are needed to stop carbon concentrations from rising. But reaching that goal requires a major transformation of how economies and businesses operate.

"It's going to change everything we do," said Joseph J. Romm, an analyst at the Center for Energy and Climate Solutions, a group that helps businesses lower emissions.

Environmental regulations and energy saving are not new. Since the 1970's and 1980's, when energy saving policies became popular in reaction to high fuel prices, the global economy has made huge strides in efficiency.

But economic activity has grown at the same time, and carbon emissions along with it.

"There is a lot that companies can do, especially in the area of energy efficiency," said Ashok Gupta, an economist at the Natural Resources Defense Council, an environmental group in New York.

Not surprisingly, the biggest strides have been achieved by corporations with operations outside the United States. I.B.M. and DuPont, for example, have long had programs to curb their energy use. In doing so, they have managed to cut manufacturing costs while decreasing their emissions.

At DuPont, the savings from energy projects has totaled $2 billion over the last decade and a half. I.B.M. saved $115 million since 1998 by avoiding 1.3 million tons of carbon emissions, or the equivalent of taking 51,600 cars off the road, according to the climate change program at the World Wildlife Fund.

Other companies, like 3M, Advanced Micro Devices and the Gap, have pledged voluntary reductions in their emissions. Wal-Mart, the world's biggest retailer, announced a sweeping set of environmental goals last October, including doubling its truck fleet's efficiency and improving energy efficiency at its stores.

Johnson & Johnson decided in the late 1990's to meet the Kyoto requirements globally. From 1990 to 2005, the company reduced carbon emissions by 11.5 percent. Meanwhile, sales grew by 350 percent.

"We have not sacrificed business growth to meet our carbon emissions," said Dennis Canavan, the executive director for worldwide energy management at Johnson & Johnson. "As Kyoto has recognized, the environment only sees the absolute amount of carbon you reduce. Allowing emissions to grow will take us to a bad place."

But some business areas remain averse to change. The transportation sector and utilities account for more than 55 percent of all emissions; they are mainly reluctant to commit to reductions without a federal mandate.

Last month, the Senate Committee on Energy and Natural Resources held hearings on climate change that led to a few surprises. Some utilities, breaking with their trade group, asked Congress to set mandatory limits on carbon emissions.

Exelon and Duke Energy, the nation's largest utility owners, said they favored a mandatory cap on emissions. As big users of nuclear power, they stand to benefit more than competitors that burn coal. But they also note that firm rules would level the playing field for everyone.

"Customers and shareholders need greater certainty," Ruth G. Shaw, a senior executive at Duke Energy, told the Senate committee. But Senator Pete V. Domenici, Republican of New Mexico, said it would be impossible to adopt any law this year because of election-year gridlock.

David G. Hawkins, who ran the air pollution program at the Environmental Protection Agency in the Carter

administration, said that many utilities were not happy with the current lack of policy.

"At a minimum, the absence of a controlled program creates uncertainty," said Mr. Hawkins, now the director of the Climate Center at the Natural Resources Defense Council.

Local and regional governments have stepped in to fill the gap. California and nine Northeastern states have drawn up plans to limit carbon emissions, and so have many cities.

Automakers have also resisted changing. David Friedman, an auto specialist with the Union of Concerned Scientists, said the average fuel economy of vehicles in the United States today — about 25 miles a gallon — had dropped by about one mile a gallon in the last 20 years. Most of the improvements in engine efficiency, however, have been lost because Detroit carmakers built larger cars and trucks.

"The automobile industry always feels it is difficult to make changes, whether on safety regulation, on seat belts, on emission standards, on smog and on global warming," Mr. Friedman said. "They always had to be forced to make progress."

Bill McKibben, a resident scholar at Middlebury College in Vermont and the author of "The End of Nature," a book about global warming, said there was no single answer.

"What people don't get is the scale of what needs to be done," he said. "Anybody whose solution includes the phrase 'in 20 years,' hasn't quite caught on to where we are."

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THE ENERGY CHALLENGE

2 Industry Leaders Bet on Coal but Split on Cleaner Approach

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By SIMON ROMEROPublished: May 28, 2006

WRIGHT, Wyo. — More than a century ago a blustery Wyoming politician named Fenimore Chatterton boasted that his state alone had enough coal to "weld every tie that binds, drive every wheel, change the North Pole into a tropical region, or smelt all hell!"

Peabody Energy, left; Brendan McDermid/Reuters, right

Gregory Boyce, of Peabody Energy, left, and Michael Morris of American Electric Power disagree on a new technology. Multimedia

Audio Slide Show: The Return of King Coal

Interactive Graphic: A Closer Look at CoalThe Energy ChallengeGreen, at a Cost

Articles in this series will periodically examine the ways in which the world is, and is not, moving toward a more energy-efficient, environmentally benign future.

The Complete Series

His words seem prophetic.

The future for American energy users is playing out in coal-rich areas like northeastern Wyoming, where dump trucks and bulldozers swarm around 80-foot-thick seams at a Peabody Energy strip mine here, one of the largest in the world.

Coal, the nation's favorite fuel in much of the 19th century and early 20th century, could become so again in the 21st. The United States has enough to last at least two centuries at current use rates — reserves far greater than those of oil or natural gas. And for all the public interest in alternatives like wind and solar power, or ethanol from the heartland, coal will play a far bigger role.

But the conventional process for burning coal in power plants has one huge drawback: it is one of the largest manmade sources of the gases responsible for global warming.

Many scientists say that sharply reducing emissions of these gases could make more difference in slowing climate change than any other move worldwide. And they point out that American companies are best positioned to set an example for other nations in adopting a new technique that could limit the environmental impact of the more than 1,000 coal-fired power projects on drawing boards around the world.

It is on this issue, however, that executives of some of the most important companies in the coal business diverge. Their disagreement is crucial in the debate over how to satisfy Americans' energy appetite without accelerating climate change.

One of those executives, Michael G. Morris, runs American Electric Power, the nation's largest coal consumer and biggest producer of heat-trapping carbon dioxide emissions from its existing plants. He is spearheading a small movement within the industry to embrace the new technology. His company plans to build at least two 600-megawatt plants, in Ohio and West Virginia, at an estimated cost of as much as $1.3 billion each.

The company says these plants are not only better for the environment but also in the best interests of even its cost-conscious shareholders. While they would cost 15 to 20 percent more to build, Mr. Morris says they would be far less expensive to retrofit with the equipment needed to move carbon dioxide deep underground, instead of releasing it to the sky, if limits are placed on emissions of global warming gases.

"Leave the science alone for a minute," Mr. Morris said in an interview at the Columbus, Ohio, headquarters of his company. "The politics around climate issues are very real. That's why we need to move on this now."

But most in the industry are not making that bet. Among them is Gregory H. Boyce, chief executive of Peabody Energy, the largest private-sector coal producer in the world thanks in part to its growing operations here in Wyoming and with aspirations to operate coal-fired plants of its own. Mr. Boyce's company alone controls reserves with more energy potential than the oil and gas reserves of Exxon Mobil.

"We're still not convinced that the technology or cost structure is there to justify going down a path where we're not comfortable," Mr. Boyce said.

Mr. Boyce's view has prevailed. No more than a dozen of the 140 new coal-fired power plants planned in the United States expect to use the new approach.

The decisions being made right now in industry and government on how quickly to adopt any new but more costly technologies will be monumental.

"Coal isn't going away, so you have to think ahead," said Gavin A. Schmidt, a climate modeler at the Goddard Institute for Space Studies, part of NASA. "Many of these power stations are built to last 50 years."

Promise and Perils

Michael Morris and Gregory Boyce, both kingpins in their industries, have a lot in common. They do a lot of business together — Mr. Morris is one of Mr. Boyce's largest customers. They are solid Republicans. And they serve together on various industry initiatives.

They agree that energy from coal — the nation's most important source of electricity — is cheaper than energy from oil and natural gas and is competitive with the uranium used in nuclear power plants. And coal could serve new uses: replacing petroleum in making chemicals, for example, or even fueling vehicles.

But while sooty smokestacks are no longer a big problem in modern coal-burning power plants, the increase in global warming gases is. A typical 500-megawatt coal-fired electricity plant, supplying enough power to run roughly 500,000 homes, alone produces as much in emissions annually as about 750,000 cars, according to estimates from Royal Dutch Shell.

Coal has no stronger evangelist than Mr. Boyce, who grew up on Long Island, the son of a mining executive, and studied engineering in Arizona. He argues that a way to reduce carbon dioxide emissions can be found without having to switch from the existing cheaper coal-burning technology.

Much in the way that Exxon Mobil influences discussion of climate issues in the oil industry, Peabody is a backer of industry-supported organizations that seek to prevent mandatory reductions in global warming emissions and promote demand for coal.

Peabody's executives are also by far the coal industry's largest political contributors to federal candidates and parties, giving $641,059 in the 2004 election cycle, with 93 percent of that amount going to Republicans, according to the Center for Responsive Politics, an independent research group in Washington that tracks money in politics. And while Peabody says it expects contributions to Democrats to increase, under Mr. Boyce the company has cultivated close contact with the Bush administration.

Mr. Boyce was chairman of an advisory panel for the Energy Department, organized by the National Coal Council, that produced a controversial report in March calling for exemptions to the Clean Air Act to encourage greater consumption of coal through 2025. The thrust of the report, which Mr. Boyce outlined in an interview, is that improvements in technology to limit carbon dioxide emissions should be left to the market instead of government regulation.

By contrast, the environmental advocacy group Natural Resources Defense Council, which has brought many lawsuits aimed at controlling pollution, described the report as an "energy fantasy" that would increase carbon dioxide emissions by more than 2 billion tons a year.

But it is Peabody's economic argument, not the environmental opposition's, that is resonating throughout the electricity industry and among energy regulators.

Led by Peabody, dozens of energy companies have embarked on the most ambitious construction of coal-fired electricity plants since the 1950's.

Coal, as Mr. Boyce notes, is a bargain. Despite a doubling in domestic prices in the last two years, a surge in prices for natural gas, the preferred fuel for new power plants in the 1990's, has made coal more attractive.

With coal so favorably priced, Peabody saw an opportunity to enter the power-plant business itself, setting out to build two of the largest in the world, the 1,500-megawatt Prairie State Energy Campus in southern Illinois and the 1,500-megawatt Thoroughbred Energy Campus in western Kentucky. Both are in areas where the St. Louis-based company has substantial coal reserves.

Despite concern among some large energy companies over the liabilities they face if global warming advances or legal limits on emissions become a reality, Peabody remains loyal to its technology choice. Vic Svec, Peabody's senior vice president for investor relations, said the possibility of near-term caps on carbon emissions was not viewed as a "material threat."

Mr. Morris, at American Electric Power, sees things differently. He cites cost concerns in arguing for its move to cleaner technology. At the request of environmental groups that hold shares in the company, A.E.P. agreed in 2004, shortly after Mr. Morris arrived, to report on the potential costs it would face if emissions rules were tightened. The company recognized that its growth beyond 2010 could be limited if it stuck with old technology.

The company has since won important allies in its push for cleaner coal, including General Electric, which is pinning much of its hopes for growth in the electricity industry on new technology and is working with A.E.P. on designing its plants.

One vital element of A.E.P.'s ambitions, and by extension those of other energy companies with similar projects, fell into place in April when the Public Utilities Commission of Ohio allowed the company to bill customers for a portion of the higher pre-construction costs for the plant it is planning in the state. The company hopes to complete construction of its first such plant by 2010.

Proponents of these plants, which turn coal into a gas that is burned to produce energy, say they would also emit much lower amounts of other pollutants that contribute to acid rain, smog and respiratory illness.

But for every small advance of the new technology, there are bigger setbacks. Many within the industry argue that it would be a waste of time and money to build such plants in the

United States unless China, which passed the United States several years ago as the largest coal-consuming nation, also moves to limit carbon dioxide emissions from its rapidly growing array of coal-fired plants.

Will Government Act?

With widespread uncertainty in the state-regulated power industry, the debate has moved to the federal level, where testimony by senior energy executives before the Senate Energy Committee in April revealed a sharp fault line within the industry.

On one side, A.E.P., lined up with Peabody and other heavy coal users against mandatory limits on global warming gases if industrializing countries like China and India are not included. Others that have less to lose from carbon caps — like Exelon and Duke Energy, which rely much more on nuclear power — spoke in favor of national limits that would include coal consumers.

The Bush administration has rejected mandatory limits on carbon dioxide emissions. Michele St. Martin, a spokeswoman for the White House Council on Environmental Quality, said, "such regulations would lead to higher energy prices, slower economic growth and fewer jobs for the U.S. as industries move overseas where greenhouse gas emissions are not similarly controlled."

But there is some support in Washington for such legislation. The two senators from New Mexico, Jeff Bingaman, a Democrat, and Pete V. Domenici, a Republican, are working on a bill that could require limits on carbon dioxide emissions.

Ahead of the 2008 presidential election, two senators often mentioned as candidates, Hillary Rodham Clinton, Democrat of New York, and John McCain, Republican of Arizona, have

endorsed mandatory cuts in emissions. Mr. Morris of A.E.P. said such support has persuaded him that limits might be imposed in coming years.

While Peabody supports some coal gasification projects, it remains skeptical about departing from traditional coal-burning methods to produce electricity.

The pulverized coal plants it wants to build, which grind coal into a dust before burning it to make electricity, currently cost about $2 billion each, or 15 percent to 20 percent less to build than the cleaner "integrated gasification combined cycle," or I.G.C.C., plants, which convert coal into a gas.

The hope among scientists is that I.G.C.C. plants could be relatively quickly fitted with systems to sequester deep underground the carbon dioxide created from making electricity. Without such controls, the new coal plants under development worldwide could pump as much carbon dioxide into the atmosphere over their lifetimes as all the coal burned in the last 250 years, according to Jeff Goodell, who has written on coal for several publications, including The New York Times, and is author of a new book on the coal industry.

But state and federal regulators have been hesitant to endorse the technology. Peabody and other companies remain skeptical that carbon-capture methods, whether for pulverized coal or combined cycle plants, will become commercially or technologically feasible until the next decade.

Legal battles over this reluctance have begun, with the Natural Resources Defense Council and the American Lung Association this year challenging the Environmental Protection Agency for allowing electric companies to move ahead with projects without evaluating the new technology.

In one key decision on the state level, the Wisconsin Public Service Commission rejected a proposal from WE Energies of Milwaukee in 2003 to build a plant with the new technology, saying it was too expensive and would result in higher electricity prices.

Capturing the Gas

Engineers have known how to make gas from coal for more than a century, using this method in the gaslights that first illuminated many American cities. A handful of coal gasification plants are already in operation in the United States, Spain and the Netherlands, built with generous government assistance.

Selling the captured carbon dioxide from coal gasification plants could make them more competitive with pulverized coal plants. One gasification plant in North Dakota, though different from an electric plant, already sends its carbon dioxide to Saskatchewan, where it is injected in aging oilfields to force more crude from the ground. And the oil giant BP announced a similar project in March for a refinery it owns near Los Angeles, using petroleum coke as a fuel there instead of coal.

Scientists have developed numerous other plans to pump away carbon dioxide, like shipping it to offshore platforms to inject it below the ocean floor. These plans are not without risk, with some officials concerned that carbon dioxide sequestration could trigger earthquakes. Yet, time and again, the most limiting factor remains economics.

As they proceed with plans to build pulverized coal plants, Peabody and other companies often point to their support of the alternative technology through their participation in Futuregen, a $1 billion project started three years ago by the Bush administration to build a showcase 275-megawatt power

station that could sequester carbon dioxide and reduce other pollutants.

Futuregen's 10 members include some of the world's largest coal mining companies, among them Peabody and BHP Billiton of Australia, as well as large coal-burning utilities like A.E.P. and the Southern Company.

One Chinese company, the China Huaneng Group, is also a member of Futuregen, while India's government signed on in March. Washington is financing the bulk of the project, more than $600 million, with about $250 million coming from coal and electricity companies and the rest from foreign governments.

But Futuregen is already behind schedule, with planners now hoping to choose a site for the plant by the end of the year, with an eye on starting operation by 2012. Environmental groups have criticized the project as too little, too late.

"Futuregen is a smokescreen, since it's not intended to bring technology to the market at the pace required to deal with the problem," said Daniel Lashoff, science director at the climate center at the Natural Resources Defense Council. "We don't have that kind of time."

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