How new U.S. biofuel legislation will subsidize oil consumption

From: Cornell Chronicle Online

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Why new U.S. biofuel legislation is on track to waste billions of tax dollars, while subsidizing oil consumption

Harry de Gorter, like David Just a Cornell professor of applied economics and management, advises the U.N.'s Food and Agriculture Organization and the World Bank on issues related to the impact of biofuels on food security and global warming. He is also involved in talks on biofuels in the Doha negotiations and in World Trade Organization trade disputes. Just studies the use of information and, more particularly, how differences in human capital and information availability affect decisions.

New U.S. energy legislation mandates the use of renewable fuel but calls for continuing current biofuel subsidies that will cost taxpayers billions of dollars. The subsidies -- tax credits -- by themselves encourage ethanol production as a replacement for oil-based gasoline consumption. Instead, the tax credits will play a major role in unintentionally subsidizing gasoline consumption. This contradicts the new energy bill's stated objectives of reducing dependency on oil, improving the environment and enhancing rural prosperity.

Biofuels, particularly ethanol, are under increased scrutiny because of ethanol's use of crops, such as corn, at a time of rapidly escalating worldwide food prices. There are also doubts over whether biofuels mitigate carbon dioxide (CO2) emissions when indirect land use is taken into account. But one key issue that has been overlooked in all of this debate is how the new Renewable Fuel Standard in the recently passed Energy Independence and Security Act mandates the use of 36 billion gallons of renewable fuel by 2022. In fact, the new energy legislation will unintentionally reverse the effects of the existing biofuel government subsidies in the form of federal and state tax credits, totaling about 57 cents per gallon. The resulting taxpayer costs, exceeding $20 billion per annum, will be completely wasted.

The new legislation will, therefore, not improve energy security nor help the environment or farmers.

The effects of current policy are mind-boggling and will have profound consequences beyond wasted tax dollars. Transfers of wealth to the Middle East will increase, leading to even more dependence on oil and energy insecurity. Air quality will decline while CO2 emissions will increase. Meanwhile, the resulting rise in oil prices hurts farmers through higher input costs, while ethanol prices are unchanged as ethanol consumption remains at mandated levels.

The unintended result caused by a tax credit becoming a gasoline subsidy in the presence of a government mandate is easily explained. By themselves, tax credits enable blenders of ethanol and gasoline to take advantage of the government subsidy by bidding up the price of ethanol until it is above the market price of gasoline by 57 cents a gallon.

Now consider the case where the ethanol price is determined by the binding mandate -- 36 billion gallons by 2022 -- and there is no tax credit. The consumer "fuel" price is a weighted average of the ethanol and gasoline prices. Implicitly, consumers pay a higher price for gasoline to finance the same ethanol production as before, when only the tax credit was in place.

Now introduce a tax credit alongside the mandate: Because the ethanol price premium, due to the mandate, exceeds the tax credit, there is no incentive for blenders to bid up the price of ethanol as before. And market prices of ethanol cannot decline due to the mandate. Instead, blenders will offer a lower total fuel price -- ethanol plus gasoline -- to consumers to take advantage of the tax credit offered to them by the government. The lower price increases gasoline consumption and thus increases the market price of gasoline and oil.

Due to the unique way in which mandates reverse the market effects of a tax credit, the intentions of policy-makers cannot necessarily be faulted. There is no other example in the economics literature of the interaction between a price-based and quantity-based policy measure that generates such a unique result as that of a biofuel tax credit and mandate.

Furthermore, this policy mistake is not unique to the United States but is a worldwide error of judgment as most countries use both mandates and tax credits simultaneously. The policy implication is clear: allow the mandate to work by itself, so eliminate the tax credits and save billions in taxpayer monies. This involves only a modest change in biofuel policy while dramatically improving policy achievements.

A City Cooler and Dimmer, and, Oh, Proving a Point

By WILLIAM YARDLEY , New York Times

JUNEAU, Alaska — Conservationists swoon at the possibility of it all. Here in Alaska, where melting arctic ice and eroding coastlines have made global warming an urgent threat, this little city has cut its electricity use by more than 30 percent in a matter of weeks, instantly establishing itself as a role model for how to go green, and fast.

Comfort has been recalibrated. The public sauna has been closed and the lights have been dimmed at the indoor community pool. At the library, one of the two elevators was shut down after someone figured out it cost 20 cents for each round trip. The thermostat at the convention center was dialed down eight degrees, to 60. The marquee outside is dark.

Schoolchildren sacrifice Nintendo time and boast at show-and-tell of kilowatts saved. Hotels consult safety regulations to be sure they have not unscrewed too many light bulbs in the hallways. On a recent weekday, all but one of the dozens of television screens on display at the big Fred Meyer store were black — off, that is.

Yet even as they embrace a fluorescent future, the 31,000 residents of Juneau, the state capital, are not necessarily doing it for the greater good. They face a more local inconvenient truth. Electricity rates rocketed about 400 percent after an avalanche on April 16 destroyed several major transmission towers that delivered more than 80 percent of the city’s power from a hydroelectric dam about 40 miles south.

“People are suddenly interested in talking about their water heaters,” said Maria Gladziszewski, who handles special projects for the city manager’s office. “As they say, it’s a teachable moment.”

Until repairs are completed, possibly by late June, the city’s private electric utility will depend almost exclusively on diesel fuel. Hydropower is one of the cheapest and cleanest power sources, while diesel, at around $4 a gallon, is one of the most expensive and dirtiest.

With the first bills based on the increased rate scheduled to be sent out this week, fear is in the air. So is the laundry. Dryers eat up watts, and local stores ran out of clothespins because so many people started hanging their laundry outside. Never mind that it rains 220 days of the year and rarely gets truly warm here amid the fjords and forests of the Inside Passage.

“It takes about two days to get them dry,” Linda Augustine, 66, an elementary school teacher, said as she used plastic clothes hangers to dry blue jeans and T-shirts under the awning on the back porch of her mobile home. “And I don’t iron my clothes now. You massage them to get the wrinkles out while they’re still on the hanger.”

The new rate is about 53 cents per kilowatt-hour, up from about 11 cents — around the national average — before the avalanche. The average residential bill before the avalanche was about $86 a month.

The greening of Juneau has made for an unexpected moment in the spotlight for a city some Alaskans would like to see play a lesser role. Clear skies in Juneau reveal sheer, snow-capped mountains lining the Gastineau Channel and bald eagles coasting over the water the way crows might elsewhere. But the city’s remote location and abundant dreariness, coupled with the fact that Anchorage — a nearly 600-mile flight away — has the state’s economic power and 10 times Juneau’s population, have long led to calls to move the capital.

“Before this event on April 16, the public discourse in Juneau in terms of its future was all focused on the perennial threat of having the capital relocated,” said Mayor Bruce Botelho. “It was the subject of three different pieces of legislation, all of which had hearings this year.”

Gov. Sarah Palin, a Republican from an Anchorage suburb, has shown little interest in spending time in Juneau, one of the state’s few Democratic strongholds. While plenty of Juneau residents are irate that the electric utility, Alaska Electric Light and Power, could not prevent the avalanche damage and then passed on its costs to customers, they have also blamed Ms. Palin for rejecting a request for public money to help residents handle big bill increases.

“We need all the help we can get right now,” Ashley Richardson, of the Juneau People’s Power Project, said at a small protest on the Capitol steps on Friday. “This is not our responsibility.”

The governor has requested help from a federal loan program for small businesses hurt by the rate increase. Officials at the electric utility say they are looking at ways to ease the pain by allowing more residents to spread the higher costs over many months. The local United Way and other groups have received a city grant to help lower-income residents with their bills.

What the avalanche has underscored, however, is that Juneau is largely on its own, whether in meeting the energy challenge or facing the broader question of its future. The gold rush that helped create the city ended a century ago, and other resource-based industries, like other forms of mining and logging, have faded amid environmental pressures and economic changes. State government and tourism are the anchors now.

Many residents say they were at least relieved that the power problems started as the days were growing longer and warmer. Some, seeing a silver lining, wonder if the electricity challenge, and the conservation it has prompted, might spur a new economic creativity for a city recommitted to energy efficiency. (While residents have recently rushed to convert to compact fluorescent light bulbs, Juneau is still working toward mandatory curbside recycling and it has yet to complete an audit of its carbon footprint.)

Mr. Botelho, who said his in-box had been filling with messages from environmental start-up companies that want to make Juneau their proving ground, called the situation “the opportunity to be our own knights in shining armor.”

Evidence of the civic self-discipline is updated daily on the Web site of Alaska Electric Light and Power. The day before the avalanche, the city consumed 1,006 megawatt hours of electricity; on Friday, the number was 625.

Civilization's last chance

The planet is nearing a tipping point on climate change, and it gets much worse, fast.

By Bill McKibben

Even for Americans -- who are constitutionally convinced that there will always be a second act, and a third, and a do-over after that, and, if necessary, a little public repentance and forgiveness and a Brand New Start -- even for us, the world looks a little terminal right now.

It's not just the economy: We've gone through swoons before. It's that gas at $4 a gallon means we're running out, at least of the cheap stuff that built our sprawling society. It's that when we try to turn corn into gas, it helps send the price of a loaf of bread shooting upward and helps ignite food riots on three continents. It's that everything is so tied together. It's that, all of a sudden, those grim Club of Rome types who, way back in the 1970s, went on and on about the "limits to growth" suddenly seem ... how best to put it, right.

All of a sudden it isn't morning in America, it's dusk on planet Earth.

There's a number -- a new number -- that makes this point most powerfully. It may now be the most important number on Earth: 350. As in parts per million of carbon dioxide in the atmosphere.

A few weeks ago, NASA's chief climatologist, James Hansen, submitted a paper to Science magazine with several coauthors. The abstract attached to it argued -- and I have never read stronger language in a scientific paper -- that "if humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, paleoclimate evidence and ongoing climate change suggest that CO2 will need to be reduced from its current 385 ppm to at most 350 ppm."

Hansen cites six irreversible tipping points -- massive sea level rise and huge changes in rainfall patterns, among them -- that we'll pass if we don't get back down to 350 soon; and the first of them, judging by last summer's insane melt of Arctic ice, may already be behind us.

So it's a tough diagnosis. It's like the doctor telling you that your cholesterol is way too high and, if you don't bring it down right away, you're going to have a stroke. So you take the pill, you swear off the cheese, and, if you're lucky, you get back into the safety zone before the coronary. It's like watching the tachometer edge into the red zone and knowing that you need to take your foot off the gas before you hear that clunk up front.

In this case, though, it's worse than that because we're not taking the pill and we are stomping on the gas -- hard. Instead of slowing down, we're pouring on the coal, quite literally. Two weeks ago came the news that atmospheric carbon dioxide had jumped 2.4 parts per million last year -- two decades ago, it was going up barely half that fast.

And suddenly the news arrives that the amount of methane, another potent greenhouse gas accumulating in the atmosphere, has unexpectedly begun to soar as well. It appears that we've managed to warm the far north enough to start melting huge patches of permafrost, and massive quantities of methane trapped beneath it have begun to bubble forth.

And don't forget: China is building more power plants; India is pioneering the $2,500 car; and Americans are buying TVs the size of windshields, which suck juice ever faster.

Here's the thing. Hansen didn't just say that if we didn't act, there was trouble coming. He didn't just say that if we didn't yet know what was best for us, we'd certainly be better off below 350 ppm of carbon dioxide in the atmosphere.

His phrase was: "if we wish to preserve a planet similar to that on which civilization developed." A planet with billions of people living near those oh-so-floodable coastlines. A planet with ever-more vulnerable forests. (A beetle, encouraged by warmer temperatures, has already managed to kill 10 times more trees than in any previous infestation across the northern reaches of Canada this year. This means far more carbon heading for the atmosphere and apparently dooms Canada's efforts to comply with the Kyoto protocol, which was already in doubt because of its decision to start producing oil for the U.S. from Alberta's tar sands.)

We're the ones who kicked the warming off; now the planet is starting to take over the job. Melt all that Arctic ice, for instance, and suddenly the nice white shield that reflected 80% of incoming solar radiation back into space has turned to blue water that absorbs 80% of the sun's heat. Such feedbacks are beyond history, though not in the sense that Francis Fukuyama had in mind.

And we have, at best, a few years to short-circuit them -- to reverse course. Here's the Indian scientist and economist Rajendra Pachauri, who accepted the Nobel Prize on behalf of the Intergovernmental Panel on Climate Change last year (and, by the way, got his job when the Bush administration, at the behest of Exxon Mobil, forced out his predecessor): "If there's no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment."

In the next two or three years, the nations of the world are supposed to be negotiating a successor treaty to the Kyoto accord (which, for the record, has never been approved by the United States -- the only industrial nation that has failed to do so). When December 2009 rolls around, heads of state are supposed to converge on Copenhagen to sign a treaty -- a treaty that would go into effect at the last plausible moment to heed the most basic and crucial of limits on atmospheric CO2.

If we did everything right, Hansen says, we could see carbon emissions start to fall fairly rapidly and the oceans begin to pull some of that CO2 out of the atmosphere. Before the century was out, we might even be on track back to 350. We might stop just short of some of those tipping points, like the Road Runner screeching to a halt at the very edge of the cliff.

More likely, though, we're the coyote -- because "doing everything right" means that political systems around the world would have to take enormous and painful steps right away. It means no more new coal-fired power plants anywhere, and plans to quickly close the ones already in operation. (Coal-fired power plants operating the way they're supposed to are, in global warming terms, as dangerous as nuclear plants melting down.) It means making car factories turn out efficient hybrids next year, just the way U.S. automakers made them turn out tanks in six months at the start of World War II. It means making trains an absolute priority and planes a taboo.

It means making every decision wisely because we have so little time and so little money, at least relative to the task at hand. And hardest of all, it means the rich countries of the world sharing resources and technology freely with the poorest ones so that they can develop dignified lives without burning their cheap coal.

It's possible. The United States launched a Marshall Plan once, and could do it again, this time in relation to carbon. But at a time when the president has, once more, urged drilling in the Arctic National Wildlife Refuge, it seems unlikely. At a time when the alluring phrase "gas tax holiday" -- which would actually encourage more driving and more energy consumption -- has danced into our vocabulary, it's hard to see. And if it's hard to imagine sacrifice here, imagine China, where people produce a quarter as much carbon apiece as Americans do.

Still, as long as it's not impossible, we've got a duty to try to push those post-Kyoto negotiations in the direction of reality. In fact, it's about the most obvious duty humans have ever faced.

After all, those talks are our last chance; you just can't do this one lightbulb at a time.

We do have one thing going for us -- the Web -- which at least allows you to imagine something like a grass-roots global effort. If the Internet was built for anything, it was built for sharing this number, for making people understand that "350" stands for a kind of safety, a kind of possibility, a kind of future.

Hansen's words were well-chosen: "a planet similar to that on which civilization developed." People will doubtless survive on a non-350 planet, but those who do will be so preoccupied, coping with the endless unintended consequences of an overheated planet, that civilization may not.

Civilization is what grows up in the margins of leisure and security provided by a workable relationship with the natural world. That margin won't exist, at least not for long, as long as we remain on the wrong side of 350. That's the limit we face.

Bill McKibben, a scholar in residence at Middlebury College and the author, most recently, of "The Bill McKibben Reader," is the co-founder of Project 350 ( www.350.org), devoted to reducing carbon dioxide in the atmosphere to 350 parts per million. A longer version of this article appears at Tomdispatch.com.

House passes carbon emitting $290 billion farm bill

House passes $290 billion farm bill

Carolyn Lochhead, Chronicle Washington Bureau

(05-14) 19:06 PDT Washington - -- House Speaker Nancy Pelosi marshaled a 318-vote, veto-proof majority today to pass a $290 billion farm bill that will lock in the nation's food policy for five years while granting $3 billion in first-ever money to support California fruit and vegetables.

The bill, expected to pass the Senate, also by a veto-proof margin, includes as much as $40 billion in subsidies to commodity farmers who already enjoy record prices. It also contains a new $3.8 billion "permanent disaster" program that will create powerful incentives to plow millions of acres of prairie grasslands and release the carbon stored there.

The bill also will raise spending on food stamps, food banks and other aid to the needy by $10.4 billion, drawing votes from urban Democrats openly skeptical of raising subsidies to wealthy grain farmers during a global food crisis.

The overwhelming House vote quashed hopes by food, conservation and taxpayer groups that the Democratic-led Congress would seize a period of record farm prosperity to shift U.S. food policy from a 1930s model that subsidizes industrial food production to a modernized approach that could aid more farmers and address new public health and environmental goals.

Pelosi, a San Francisco Democrat, called the bill a "very big step in the right direction," pointing to the food and conservation spending bundled with the commodity subsidies to ensure passage.

A farm couple will be allowed to earn up to $2.5 million a year before government payments are cut off under new rules that lawmakers called a major reform. An urban couple applying for food stamps is cut off at $17,808 in income and may own only one car.

Democrats also expanded subsidies to new crops and raised subsidy levels, exposing taxpayers to billions more in costs should commodity prices retreat. The payments go to a minority of farmers of a few crops and are highly concentrated among the biggest operations. Nine of 10 farmers in California do not get crop subsidies.

Asked how she could justify paying so much money to wealthy farmers when food prices are rising and Democrats are calling for change in Washington, Pelosi listed the bill's nutrition and conservation spending.

"I justify it by saying this is the best farm bill I've ever voted on," Pelosi said. "It is probably the last farm bill that will look like this."

Every Bay Area Democrat voted for the bill but one: liberal East Bay Rep. Pete Stark.

"It is a rare day indeed that I agree with President Bush," Stark said, "but he is absolutely right to have issued a veto threat of this bill."

The legislation is loaded with special-interest earmarks. California salmon fishermen get a $170 billion bailout added by Rep. Mike Thompson, D-Napa. Kentucky thoroughbred racehorse owners get a $126 million tax write off. The bill will force the federal government to sell parts of the Green Mountain National Forest to a Vermont ski resort.

The earmarks swamp the new $105 million allotted to organic farming over five years and other aid sought by Bay Area groups promoting sustainable agriculture. The $3 billion in research and marketing for fruits and vegetables is a tenth of what will go out in direct payments for wheat, corn, soybeans, cotton, rice and other commodity crops.

Tom Nassif, president of Western Growers, representing California produce growers, was grateful that Congress for the first time included fruits, nuts and vegetables in a farm bill. He said he did not want produce growers to get in a fight with subsidized grain farmers because "we were going to lose that battle."

The vote was more than enough to override President Bush's promised veto, which will be the first of a farm bill since Dwight Eisenhower's in 1956. Bush criticized the payouts to wealthy farmers when consumers are paying higher food prices.

Many food and environmental groups were dismayed by the direction of the bill but supported it anyway because it included money for their priorities. Others said the subsidies have so many negative effects that they would rather have no change than this one.

"We oppose committing the federal government to another five years of subsidizing the destruction of family farming," said Chuck Hassebrook, executive director of the Center for Rural for Rural Affairs in Nebraska.

Hassebrook said the subsidies help large farms buy out their smaller neighbors, speeding consolidation into giant farm operations, a claim backed by government economists. He said his group could find just five farms in seven states that would see a reduction in payments under the bill's reforms.

"Nancy Pelosi is the 15th richest member of Congress," Hassebrook said. "But when we looked at her financial disclosure statements, it was clear that she would be eligible for farm payments under this bill, because the income-producing assets are in the name of her husband."

The National Wildlife Federation, which had supported the bill because it increased conservation funding, urged its defeat after seeing changes to grassland and wetland protections that were made behind closed doors.

"What has come out ... is entirely unacceptable from a climate change and a wildlife standpoint," said Julie Stibbing, legislative counsel for the group. "We think we have created a perfect storm for both carbon releases and destruction of our last remaining prairie habitat."

The bill would allow farmers to break virgin prairie and still collect subsidies and crop insurance. It also includes a $3.8 billion "permanent disaster" program that will bail out farmers plowing marginal land.

As it is, high wheat prices are speeding the removal of millions of acres of prairie from protection under the Conservation Reserve Program. Taxpayers have spent billions over the years in rental payments to farmers to let marginal land lie fallow and provide wildlife habitat and watershed protections.

"It doesn't matter how marginal the land you bring into production, you will be insured that you will not lose money," Stibbing said. In the Great Plains alone, she said, every newly plowed acre will release between 45 and 54 tons of carbon dioxide now stored in the ground as decayed plant material.

The bill is expected to sail through the Senate Thursday with support from both Democratic presidential candidate Sen. Barack Obama and Sen. Hillary Clinton. Republican Sen. John McCain opposes it.

E-mail Carolyn Lochhead at clochhead@sfchronicle.com

World carbon dioxide levels highest for 650,000 years, says US report

· Rise in chief greenhouse gas worse than feared
· Earth may be losing ability to absorb CO2, say scientists

• David Adam, environment correspondent
• The Guardian,

This article appeared in the Guardian on Tuesday May 13 2008 on p16 of the UK news section.

Cooling towers at Eggborough power station, near Selby. Photograph: John Giles/PA

The concentration of carbon dioxide in the atmosphere has reached a record high, according to the latest figures, renewing fears that climate change could begin to slide out of control.

Scientists at the Mauna Loa observatory in Hawaii say that CO2 levels in the atmosphere now stand at 387 parts per million (ppm), up almost 40% since the industrial revolution and the highest for at least the last 650,000 years.

The figures, published by the US National Oceanic and Atmospheric Administration on its website, also confirm that carbon dioxide, the chief greenhouse gas, is accumulating in the atmosphere faster than expected. The annual mean growth rate for 2007 was 2.14ppm - the fourth year in the last six to see an annual rise greater than 2ppm. From 1970 to 2000, the concentration rose by about 1.5ppm each year, but since 2000 the annual rise has leapt to an average 2.1ppm.

Scientists say the shift could indicate that the Earth is losing its natural ability to soak up billions of tonnes of CO2 each year. Climate models assume that about half our future emissions will be reabsorbed by forests and oceans, but the new figures confirm this may be too optimistic. If more of our carbon pollution stays in the atmosphere, it means emissions will have to be cut by more than is currently projected to prevent dangerous levels of global warming.

Martin Parry, co-chair of the Intergovernmental Panel on Climate Change's working group on impacts, said: "Despite all the talk, the situation is getting worse. Levels of greenhouse gases continue to rise in the atmosphere and the rate of that rise is accelerating. We are already seeing the impacts of climate change and the scale of those impacts will also accelerate, until we decide to do something about it."

Perched some 11,000ft up a volcano, the Mauna Loa observatory has been measuring carbon dioxide in the atmosphere since 1958. It is regarded as producing among the most reliable data sets because of its remote location, far from any possible source of the gas that could confuse the sensors.

Over the decades, the Mauna Loa readings, made famous in Al Gore's documentary An Inconvenient Truth, show the CO2 level rising and falling each year as foliage across the northern hemisphere blooms in spring and recedes in autumn. But they also show an upward trend as human emissions pour into the atmosphere, and each spring, the total CO2 level creeps above the previous year's high to set a new record.

Robin Oakley, head of Greenpeace's climate change campaign, said: "We're now witnessing a key moment in the climate change story, and it's not good news. The last time the atmosphere was this choked with CO2 humans were yet to evolve as a species. To even consider building new runways and coal-fired power stations at this juncture in history is an unpardonable folly, but Gordon Brown seems determined to stumble forward regardless with his ill-conceived plans in the face of the science and widespread public opposition."

A study last year suggested that the recent surge in atmospheric CO2 levels was down to three processes: growth in the world economy, heavy use of coal in China, and a weakening of natural "sinks", forests, seas and soils that absorb carbon. The scientists said the increase was 35% larger than they expected.

They said about half of the carbon surge was down to the Chinese reliance on coal, which has forced up the carbon intensity of the overall world economy since 2000, reversing a trend of increasing energy efficiency since the 1970s.

· Martin Parry will be speaking at the Guardian Planning for Climate Adaptation conference on May 19

World CO2 levels at record high, scientists warn

• David Adam
• guardian.co.uk,

This article was first published on guardian.co.uk on Monday May 12 2008.

The concentration of carbon dioxide in the atmosphere has reached a record high, according to new figures that renew fears that climate change could begin to slide out of control.

Scientists at the Mauna Loa observatory in Hawaii say that CO2 levels in the atmosphere now stand at 387 parts per million (ppm), up almost 40% since the industrial revolution and the highest for at least the last 650,000 years.

The figures, published by the US National Oceanic and Atmospheric Administration (NOAA) on its website, also confirm that carbon dioxide, the chief greenhouse gas, is accumulating in the atmosphere faster than expected. The annual mean growth rate for 2007 was 2.14ppm – the fourth year in the past six to see an annual rise greater than 2ppm. From 1970 to 2000, the concentration rose by about 1.5ppm each year, but since 2000 the annual rise has leapt to an average 2.1ppm.

Scientists say the shift could indicate that the Earth is losing its natural ability to soak up billions of tons of carbon each year. Climate models assume that about half our future emissions will be re-absorbed by forests and oceans, but the new figures confirm this may be too optimistic. If more of our carbon pollution stays in the atmosphere, it means emissions will have to be cut by more than currently projected to prevent dangerous levels of global warming.

Martin Parry, co-chair of the Intergovernmental Panel on Climate Change's working group on impacts, said: "Despite all the talk, the situation is getting worse. Levels of greenhouse gases continue to rise in the atmosphere and the rate of that rise is accelerating. We are already seeing the impacts of climate change and the scale of those impacts will also accelerate, until we decide to do something about it."

· Martin Parry will be speaking at the Guardian Planning for Climate Adaptation conference on May 19