Tiny "carbon neutral" club struggles with costs

Norway, Costa Rica and the Maldives are struggling with high costs and technological hurdles to stay in the world's most exclusive club for fighting climate change -- seeking to cut net greenhouse gas emissions to zero.

The United Nations is praising their "carbon neutrality" targets before a UN summit on Dec. 7-18 in Copenhagen meant to agree a new pact to combat global warming. But the model is hard to imitate with its demand for a drastic shift to clean energy.

"What they're trying to do is fundamentally change the direction of their economic growth," Yvo de Boer, head of the UN Climate Change Secretariat, told Reuters. "It's a way of getting ahead of the game."

Yet all three of the small nations face big problems.

Greenhouse gas emissions in Norway are 7 percent above its 2012 target under the Kyoto Protocol, while emissions are rising in Costa Rica, especially in the transport sector.

And the Maldives' plan to be a tropical showcase for solar and wind power in the Indian Ocean, shifting from dependence on costly diesel, will need an estimated $1.1 billion in investments over a decade for its 310,000 people.

The Maldives is aiming for carbon neutrality by 2020, Costa Rica by 2021 and Norway by 2030.

But New Zealand and Iceland have dropped past aims of carbon neutrality because of high costs amid recession. And the Maldives failed at a meeting this month to win new recruits to the club among poor nations such as Bangladesh and Barbados.

Carbon neutrality means a nation can use fossil fuels -- in power plants, factories or cars -- only if the greenhouse gas emissions are either captured and buried or offset elsewhere, for instance by planting carbon-absorbing forests or by investing in wind turbines or solar panels abroad.

"Norway's not on track," said Knut Alfsen from the Center for International Climate and Environmental Research, Oslo.

Norway, seeing itself as a green leader even though it is the world's number five oil exporter, is spending $620 million in 2010 on research into capturing emissions from the oil and gas sector. But there have been few breakthroughs so far.

"It will be very hard to achieve (carbon neutrality) if we have no big technological change," Environment Minister Erik Solheim told Reuters. "But you have to set ambitious targets."

And the Nordic nation has a trump card -- cash. "We have more financial freedom than other countries," Solheim said. Norway has a $444 billion fund of oil savings invested in foreign stocks and bonds -- or almost $100,000 for each person.

At current market prices of about 13 euros ($19.46) a tonne, it would cost $650 million a year to buy quotas to emit Norway's annual 50 million tonnes of greenhouse gas emissions. "It's a lot of money but in some ways peanuts for Norway," Alfsen said.

Solheim insisted much of the cuts would be in domestic emissions as part of a wider global goal of slowing rising temperatures projected to bring more heatwaves, droughts, floods, species extinctions and rising sea levels.

Both Norway and Costa Rica have a head start because they already generate almost all electricity from clean hydropower. The Maldives, worried that rising sea levels could swamp coral atolls, hope to be a testing ground for green technology.

And the goals may help both Costa Rica and the Maldives promote themselves as eco-friendly tourist destinations.

"Our main challenge is transport with fossil fuels," said Pedro Leon Azofeifa, coordinator of Costa Rica's ''Peace with Nature'' initiative which is seeking carbon neutrality.

Some Costa Ricans complain of a lack of progress.

"The goal of carbon neutrality was set 2-12 years ago but not much has happened - our carbon footprint is growing," said Roberto Jimenez, leader of the www.co2neutral2021.org group which says carbon neutrality will help businesses.                                           

One goal is a new railway in central Costa Rica -- costing hundreds of millions of dollars.

And Costa Rica hopes that its forests -- trees soak up heat trapping carbon dioxide as they grow -- will qualify for credits under a new UN plan due to be agreed in Copenhagen aimed at slowing deforestation in developing nations.

The Central American nation cleared forests in the 1980s to make way for cattle ranching but then reversed policy to promote sustainable logging and tourism -- before climate change was a worry. It is not clear whether that will qualify for credits.

"Costa Rica is in a unique position because all tropical countries want to do what Costa Rica has already achieved," said Carlos Manuel Rodriguez, a former environment minister who works for Conservation International.

A plan for the Maldives foresees investments of $110 million a year over a decade in solar and wind power -- reckoning that savings on diesel imports would quickly repay investments.

"If the poorest countries in the world are doing the most, where is there for the United States to hide?" said Mark Lynas, a British climate expert and author who advises the Maldives.

All three states have highlighted their neutrality efforts. Maldives President Mohamed Nasheed staged the world's first underwater cabinet meeting last month, in scuba gear, to put pressure on nations at Copenhagen to shift to clean energy.