Indonesia has set a target of attracting $160 billion in foreign investment over the next few years, and through recent deals with China and India, it is coming closer to achieving this goal.   China and India have agreed to finance billions of dollars worth of Indonesian infrastructure projects- including railways, road, ports and bridges – in exchange for coal.  The nature of the agreements is similar to the controversial “minerals-for-infrastructure” deals China has entered across Africa to secure access to that continent’s resources.

Leading purchasers of Indonesian coal are China, India, South Korea, Japan and Taiwan.  Indonesian production levels are predicted to rise nearly 90% to 480 million tons by 2020.

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Changing climate and rainfall patterns have hit many of the world’s agricultural production regions hard, especially in regions of Africa and Asia.  Despite advances in irrigation technology, it is estimated that 66% of Asian agriculture is dependent on rainfall, and in Sub-Saharan Africa, that percentage is as high as 94%.

Experts are urging policy makers to help farmers improve storage systems and develop better water management skills.  “For millions of people dependent on rain-fed agriculture, reliable access to water can make all the difference between chronic hunger and steady progress toward food security,” said hydrologist Matthew McCartney.  “Just as modern consumers diversify their financial holdings to reduce risk, smallholder farmers need a wide array of ‘water accounts’ to provide a buffer against climate change impacts.”

The report warns against over-dependence on one source of water, and encourages governments in vulnerable regions to consider storage solutions big and small, from large-scale dams to local ponds, tanks and reservoirs.  “Even small amounts of stored water, by enabling crops and livestock to survive dry periods, can produce large gains in agricultural productivity and in the wellbeing of rural people,” said McCartney.

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One of the few proposals to achieve widespread support at the Copenhagen climate talks, REDD encourages developing nations to preserve their vulnerable forest land by linking conservation measures with carbon offsets which can then be traded on the global market.

REDD uses a complex accounting system to monitor the carbon offsets resulting from various forest projects and ensure standards around the world.  This system recently passed the first of two formal audits required by the Voluntary Carbon Standard (VCS), a Washington-based group charged with ensuring the legitimacy and transparency of REDD projects by imposing strict standards.

“The methodology is expected to be broadly applicable where mosaic patterns of deforestation occur throughout Southeast Asia and Africa,” says Leslie Durschinger, founder and managing director of Terra Global Capital, a finance and advisory firm specializing in REDD projects.  These “mosaic” projects include various plans to protect forests from logging, farmland conversion, fires and collection of fuel wood and thus reduce carbon emissions.

Deforestation is a major contributor to climate change,  which the U.N. says accounts for between 20-25% of total global emissions.  Many developed nations have lent support to help develop REDD, most notably Norway, which has signed a $ billion forest conservation deal with Indonesia.  REDD aims to become part of a broader global climate accord in 2013.

British consultancy group Maplecroft crafted a “water security risk index” of 165 nations around the world based on criteria such as access to drinking water, per capita demand and dependence on water from rivers which first travel through other neighboring nations.

The survey showed primarily African and Asian nations had the most vulnerable supplies, with Somalia, Mauritania, Sudan, Niger and Iraq leading the list of “riskiest nations.”

However, poor countries are not the only ones facing increased water risk, noted Anna Moss, an author of the study.  Regions of the United States and Australia are also at high risk levels., as are European countries like Bulgaria, Belgium and Spain.

On the other end of the spectrum, the most secure water supplies can be found in Iceland, Norway and New Zealand.

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“With energy demand projected to almost double in the Asia and Pacific region by 2030, there is an urgent need for innovative ways to generate power whole at the same time reducing greenhouse gas emissions,” said Rajat Nag, managing director at ADB.  Central Asia is a region of particular interest, thanks in part to the vast amounts of desert land available for massive solar construction.

In 2009, ADB supplied nearly $1.3 billion in funding for clean energy projects, exceeding its $1 billion target.  Beginning in 2013, the Bank is aiming to increase its investment to $2 billion/year.

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NEW YORK — Commodities prices fell sharply Tuesday as new doubts about Europe’s ability to resolve the Greek debt crisis sparked a global flight from risky investments.
Crude oil and other energy contracts tumbled, a day after oil hit an 18-month high. Prices for copper and other industrial metals also fell sharply.
The declines in commodities were made worse by a spike in the dollar as investors sought safe places for their money. The rising dollar tends to sap demand from foreign investors for commodities, which are priced in dollars.
Oil fell 4 percent, as did heating oil.
Copper fell more than 3 percent, and silver prices were off nearly 5 percent.
The dollar rose sharply against other currencies, especially the euro, which has been battered by the Greek debt crisis.

The ICE Futures US dollar index, which measures the dollar against six other currencies, jumped 1.2 percent to 83.26.
The seemingly endless saga of finding a solution for Greece’s debt crunch has unnerved investors, sending stock prices down around the globe Tuesday. The Dow Jones industrial average was down as much as 283 points, its biggest drop since Feb. 4, before it closed down 225.

“There seems to be a wholesale run for the exit for risky assets,” said Evan Smith, co-manager of U.S. Global Investors’ $800 million Global Resources Fund. “It appears to be concerns about Greece and the impact on the euro zone. We thought that fire had been put out, but it keeps reigniting, it seems.”

European nations agreed to a bailout package for Greece over the weekend, but street protests broke out in Athens Tuesday as unionists opposed the sweeping budget cuts the country agreed to in order to qualify for the aid. Standard & Poor’s downgraded Greece’s debt to junk last week and also lowered its ratings on debt issued by Spain and Portugal, confirming fears that Europe’s sovereign debt woes were spreading.

Copper’s decline was made worse by another factor: China. Beijing imposed more restrictions on its banks, leading investors to worry that its hunger for copper, oil and other industrial commodities might wane as its economic growth moderates. July copper dropped 11.5 cents to $3.1785 a pound.

Other metals also tumbled.
Platinum fell $43.10 to settle at $1,685.80 an ounce, while palladium for June delivery fell $33 to $515.25 an ounce. Both are used in making catalytic converters for cars and therefore respond to shifts in sentiment about economic growth.
July silver fell 99.8 cents to $17.842 an ounce. Gold was the least hurt among metals in the selloff, falling $14.10 to settle at $1,169.20 an ounce.
In energy trading, crude oil prices dropped $3.45, or 4 percent, to settle at $82.74 on the New York Mercantile Exchange.
Crude had traded at its highest level in a year and a half on Monday. Oil prices are also taking a hit from growing crude inventories, which may have gained an additional 1.5 million barrels last week, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other Nymex trading in June contracts, heating oil fell 8.56 cents to settle at $2.2595 a gallon, and gasoline lost 11.29 cents to settle at $2.3222 a gallon. Natural gas added 1.3 cents at $4.013 per 1,000 cubic feet.
Agricultural commodities were mixed. Wheat for July delivery rose 9 cents to settle at $5.1075 a bushel. June soybeans rose half a cent to $9.87 a bushel, while corn fell 2.5 cents to $3.69 a bushel.

Copyright © 2010 The Associated Press. All rights reserved.

Last year, the United States Department of Energy (DOE) allocated millions of dollars in stimulus funding for smart grid development projects to update the nation’s energy infrastructure.  Those grants are now being turned into actual projects on the ground.  Companies like mid-Atlantic energy provider Pepco Holdings and Pacific Northwest-based Netezza are utilizing this funding to conduct regional smart grid tests to help consumers streamline energy usage and reduce inefficiencies.

Japan has enlisted Toyota, Panasonic and Toshiba in its $1.1 billion smart grid trial.  According to Bloomberg, smart meters, electric charging stations and solar panels will be incorporated into homes across four cities including Yokohama and Kyoto starting at the end of the year.  This trial is part of Japan’s goal to meet 10% of its national energy demand with renewable energy by 2020.

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By closing the “efficiency gap” between today’s wasteful production methods and other more streamlined options, we can reduce global resource strain, and potentially save billions of dollars.   For every dollar spent on efficiency methods, the report estimates savings of $2-$4 in what would have been wasted energy.

Important developments in this sector are occurring around the world, including massive smart grid investment in South Korea, construction of new high voltage transmission lines in China and development of smart grid software in high-tech hubs in the United States and India.

The following chart shows where we are now… and how far we still need to go.

China and India have formally agreed to ratify the Copenhagen Accord, the global climate agreement which stemmed from last year’s U.N. climate change convention in Copenhagen.

Over 100 countries have already approved the Accord, which aims to limit the increase in global temperatures to no more than 2 degrees Celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels.  The Accord also calls for spending on the scale of $100 billion a year to assist emerging countries in making adaptations to climate change.

China and India are two of the world’s fastest growing economies, and in recent years their rates of energy consumption and carbon dioxide emissions have skyrocketed.  By joining the Accord, China and India have added legitimacy to the treaty and have demonstrated to the rest of the world that they are serious about addressing these important climate issues.

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The combination of economic stagnation and increased efficiency measures lead many analysts to believe any recovery in U.S. demand will happen slowly.  Since reaching peak levels in 2005, U.S. oil imports have fallen over the past two years by 9%.

China’s oil imports, on the other hand, rose by 14% last year.  This demand growth has impacted China’s relationship with Saudi Arabia, its main supplier.

Chinese purchases from the oil-rich Kingdom hit a record high of 1.2 million barrels per day (mbpd) in December of last year.  Saudi oil minister Ali Al-Naimi predicts “Asia will be a huge market,” and says the Kingdom is leasing new storage facilities in Japan for easier shipments to Asian customers.

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