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Why Europe must back a technology-neutral energy policy

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Some observers believe the Europe 2020 package, coupled with the economic showdown, is bringing the EU’s greenhouse gas emissions under control. Bryony Worthington disagrees and looks to the EU’s 2030 package for the necessary measures.

The growing risk of climate change means that energy systems that have served us well for so long now have to change. Climate science indicates that to stay within the agreed limit of no more than a 2ºC average global increase in temperature, greenhouse gas emissions need to drop to zero, and that in the second half of this century we will probably need to remove those gases from the atmosphere to make up for today’s high emissions levels.

The profound implications for our energy markets mean that the question is how best to manage this transition while maintaining security of supply, and without massive increases in energy bills. There’s no straightforward answer because in theory the most cost-efficient way is to apply a price to emissions that allows market forces to establish least-cost solutions. In practice, though, this has already proved difficult. The EU’s emissions trading scheme (ETS) introduced in 2005 a carbon price affecting half of the European economy, and it hasn’t fixed the problem. It wasn’t then, and still isn’t, the only EU policy for reducing emissions. The EU’s 2020 energy and climate package included policies to boost renewables and increase energy efficiency. The renewables policy was as much an industrial innovation and energy security policy as a carbon policy, and it resulted in significant investments across the EU. Energy efficiency policies have helped to overcome non-price barriers to carbon abatement, and demand for energy is falling further as these policies are supplemented by warmer than average temperatures.

Technology neutral subsidies need not exist forever since their purpose is to stimulate innovation and bring down costs of commercial solutions

The 2020 package, combined with slower economic growth following the 2008 banking crisis, has meant that Europe’s emissions are falling and the carbon price under the ETS is low. Some therefore see little need to do more to manage the transition to a low carbon economy, but I disagree. We need to increase our efforts, but use a different approach.

Europe’s growth of renewables has not displaced the most carbon intensive forms of energy; high gas prices and low coal prices have meant higher coal burn. This has kept the carbon intensity of the economy higher than it would otherwise have been. Large subsidies have been available in the power sector for renewables, but in industrial sectors there have been few incentives for investment in decarbonisation beyond incremental increases in efficiency. The focus of any industry facing a low but rising carbon price has been on securing compensations and exemptions. Few have argued in favour of support for investment in decarbonisation technologies, with the result that there is no support mechanism for CCS, CHP, gas or nuclear in industry beyond a weak carbon price. And the carbon price mechanism is designed in such a way as to penalise investment and sometimes reward the offshoring of production, so further exacerbating industries’ investment woes. This has to change.

Fortunately, there are signs that the EU’s 2030 climate and energy package will introduce changes. But it is far from clear that the new approach needed will actually be adopted. If Europe is serious about achieving deep long term emissions cuts here’s what it will need to do.

The place to start is with the Emissions Trading Scheme, which instead of being the EU’s flagship climate policy has run aground, weighed down by a massive surplus of emissions allowances. Permanently removing excess allowances and introducing an on-going mechanism to adjust for over and under supply has to be Europe’s priority and it is greatly to be hoped that legislation can be passed next year to achieve this.

It is high time we started to take decarbonisation in industry seriously and adopt a carrot and stick approach in which the carrot is sufficiently well designed to change investment behaviour

Sorting out the surplus is only part of the solution. The ETS also needs to properly reward investment, and not to create windfalls for companies that reduce production within the EU. This can be done through allocation methodologies that take production levels into account.

With a functioning carbon pricing policy in place once more, the need for additional policies to deliver emissions reductions is reduced, so the cost of abatement per tonne saved can also be reduced. But it would be wrong to assume that a higher carbon price is all that is needed. For one thing, at the moment the carbon price covers only half of the economy, and for another there are plenty of non-price barriers to saving emissions and money that policy-makers should address. Subsidies for specific technologies like renewables should be reformed and already the EU has decided to drop legally-binding elements of the renewables targets. The risk remains that non-carbon elements of these subsidies like industrial innovation and energy security will be lost, thus slowing the speed of the EU’s transition.

To counter this, a technology-neutral approach to creating markets for zero carbon technologies across all sectors should be adopted. For power generation, this could be achieved by setting performance standards relating to the carbon intensity of supplied electricity – similar to the standards applied to vehicles industry. For industry, a system for spurring investment in innovation can be designed which rewards zero carbon heat production, as opposed to electricity. This could be funded out of ETS receipts and delivered via long-term contracts or tradable certificates. So far though, if no renewable technology to decarbonise industrial processes is available, industrial players have been frozen out of market-based incentives, with the carbon price unable alone to provide the level of incentive that’s needed.

It is high time we started to take decarbonisation in industry seriously and adopt a carrot and stick approach in which the carrot is sufficiently well designed to change investment behaviour. Technology neutral subsidies need not exist forever since their purpose is to stimulate innovation and bring down costs of commercial solutions. But just as renewable subsidies had a role to play, industrial decarbonisation will need targeted temporary support.

There is the need for a much more dynamic approach to energy R&D focussed on high risk, high reward breakthroughs in the way that the successful DARP-E model in the U.S. does. Of course, full decarbonisation needs to be achieved, but it must be done at least cost and securely. For this we will need to deploy a whole host of technologies, some of which we know about and have already made progress in, but many others are still only ideas in labs. Europe has a proud history of invention and innovation but we are less good at commercialising new technologies. Market-led innovation already occurs where there are sufficient deployment incentives to justify investment, but these are likely to deliver only incremental improvements and not step changes – across the EU, the state still has an important role to play here.

I hope that Europe will enter the Paris climate negotiations in December with an ambitious overall goal for reducing emissions along with a realistic plan for delivering a long-term transition of our energy systems. We cannot focus all our attention on the power sector to the detriment of heavy industries, and we cannot pretend that only one or two technologies will deliver the cuts we need. We Europeans must secure investment in innovation and show that it really is possible to run an industrialised economy and to reduce greenhouse gases. If we want China, India, Brazil, Mexico and South Korea to commit to reducing their emissions, they will want to know how they can do so in the context of their own industrialisation. We must have answers when they ask us how to decarbonise refining along with the production of metals, chemicals, cement and ceramics.

It is not too late – we still have five years before the 2030 energy and climate package starts. There is much detail still to be developed and negotiated, but we can yet arrive at a policy package that secures Europe’s place at the forefront of zero carbon innovation and investment. 

 

This article first appeared in the Spring 2015 issue of Europe’s World.

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Green Planet

Nigeria’s 300,000 tonne e-waste gold mine drives a new circular economy

MD Staff

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The Nigerian government, the Global Environment Facility (GEF) and UN Environment today launched a new $15 million initiative to turn the tide on e-waste in Nigeria. A global model for a circular electronics system, the project was announced at the Forum’s Annual Meeting 2019 and will kickstart a sustainable electronics economy in Nigeria, protecting the environment while creating safe employment for thousands of people.

The initiative will transform Nigeria’s current informal and hazardous recycling into a formally legislated system that benefits all actors by including a small fee on the sale of electronics to subsidise formal recycling.

Speaking at the launch of the programme, Permanent Secretary of the Ministry of the Environment, Ibukun Odusote, said e-waste posed a grave danger to both the environment and human health in Nigeria.

“This intervention by Global Environment Facility aims to stimulate the development of a sustainable circular economy for electronic products in Nigeria.” She noted that the project would also support the E-waste Producers Responsibility Organization – a key initiative of the Government of Nigeria to promote sustainable production and consumption by encouraging producers to take responsibility for the entire life cycle of their products.

With 100 times more gold in a tonne of e-waste than in a tonne of gold ore, alongside other scarce and valuable materials such as platinum, cobalt and rare earth elements, a safe and efficient recycling industry has huge economic potential.

According to the International Labour Organization, up to 100,000 people work in the informal e-waste recycling sector in Nigeria, and over half a million tonnes of discarded appliances are processed in the country every year. Yet waste that is considered to have no economic value is often dumped or burned – releasing pollutants like heavy metals and toxic chemicals into the air, water and soil.

The initiative will develop systems for the disposal of non-usable and toxic waste, aiming to collect, treat and dispose of more than 270 tonnes of e-waste contaminated with persistent organic pollutants and 30 tonnes of waste containing mercury.

The project also aims to have an impact beyond Nigeria through the development of a practical circular electronics model for Africa and beyond, by sharing best practices, promoting regional and global dialogue, and engaging global manufacturers.

The initiative sits within the Circular Economy Approaches for the Electronics Sector in Nigeria project and will be implemented by the National Environmental Standards and Regulations Enforcement Agency. The $15 million scheme brings together players from government, the private sector and civil society. It is part of the Platform for Accelerating the Circular Economy (PACE) built by the World Economic Forum, and sees cooperation with recyclers and electronics manufactures Dell, HP, Microsoft and Phillips. PACE is looking for opportunities to scale and replicate the system in partnership with more companies and in other countries.

Dominic Waughray, Managing Director and Head of the Centre for Global Public Goods at the Forum said, “This project demonstrates how the circular economy can spur economic growth, create jobs and benefit the environment. As a platform for public-private collaboration, the World Economic Forum is delighted by the teamwork between recyclers and electronics manufacturers working side by side with government and international organizations to reach shared goals”

“The environmental and economic benefits of a circular economy are clear,” said Inger Andersen, UN Environment Executive Director. “This innovative partnership with the Government of Nigeria and the Global Environment Facility is a positive step in the country’s efforts to kickstart a circular electronics system, and one that UN Environment is proud to support.”

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As voices for the planet grow louder, we must get the job done

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There is something in the air. I am not talking about pollution or greenhouse gas emissions. I am talking about the change humanity needs to address these and other environmental challenges, which have placed our planet and societies in imminent peril.

We can all sense this change: in our workplaces and schools, in our cities and communities, in the boardroom and in the media, in parliaments and city councils, in laboratories and business incubators.

People from all corners of the world are demanding a fundamental redesign of how we – as individuals and as a society – interact with the planet. There is a clear understanding that we must live within the limits of our natural world. In response, we are seeing humanity’s astonishing capacity for innovation and imagination turn towards finding solutions.

Never before has the environmental mandate been more visible, recognized and acted upon. But then again, never before have the stakes been higher.

Pollution of air, land and water is poisoning the planet, from the deepest ocean trench to the highest mountain peak. The latest climate alarm, from the Intergovernmental Panel on Climate Change, told us how little time we have to ward off the worst impacts of climate change. Scientists from many different bodies are warning that human activity is devastating biodiversity – threatening livelihoods, food security and society as we know it.

We have serious work to do. We need to ensure a healthy environment for all, which is essential to development, peace, stability and the eradication of poverty. We need to change our environmental footprint: how we use and discard, how we plan and build, how we power our societies, how we measure growth, and how we share the planet with other species.

Today, as I take up the leadership of the United Nations Environment Programme, I am convinced that we can get this job done, together. Environmental management and sustainability have been at the core of my personal journey since my first job in the 1980s in Sudan, where I worked on drought and desertification issues. I have seen what people can achieve when they work with each other towards an important goal.

In these days of change, the organization I am leading is critical. The United Nations Environment Programme is the link between science and policy action by governments – which is a key driving force for change. The organization’s Medium-Term Strategy (2018-2021) and accompanying Programme of Work informs, supports and assists nations as they work towards a sustainable future. This Programme of Work – which guides every action the organization takes – is fully aligned with the Sustainable Development Goals, the Paris Agreement and many other international processes. We collaborate just as closely with civil society and the private sector, without whom change at the speed and scale we need simply will not be possible.

We also have a long history of horizon watching, of identifying waves that are coming to our shores, and supporting nations as they come to agreements around issues that require coordinated global action. The United Nations Environment Programme hosts the secretariats of many multilateral agreements on environmental themes: from biodiversity and ecosystems to regional seas, from chemical waste management to protecting the ozone layer. I look forward to supporting these agreements so that their ambitious goals can be achieved.

The UN Environment Programme is here to support the wider UN system and every process linked to environmental action. In September this year, at the UN Secretary-General’s Climate Action Summit, countries will showcase a leap in collective ambition. In 2020, at the next meeting of the UN Convention on Biological Diversity, the world will agree on new and – I hope – ambitious targets to arrest biodiversity loss. Whatever my organization can do to support these encouraging moves, we will do.

Like any organization, though, we must evolve and improve. I have taken to heart the changes demanded of this organization. I will work closely with my dedicated staff, management and Member States to make sure we drive forward, while learning from the past. We will adhere to the high standards expected of an institution with such a powerful global mandate: safeguarding life on earth.

As we work ever harder and better, our success will not be defined by a report or a conference, but by how we support Member States and their people to shift the needle.

Success for us means halting the rapid loss of species. It means preventing seven million people from dying of air pollution each year. It means countries taking action towards sustainable consumption and production. It means a planet powered by clean energy. It means all of humanity reaping the benefits of a healthy and thriving environment for centuries to come.

Today, as I arrive in beautiful Kenya, I will do everything I can to work with staff, Member States and partners to make this happen.

UN Environment

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Restoring the Caribbean to the paradise it used to be

MD Staff

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When people think of the Caribbean, it’s the turquoise seas, clean beaches, coral reefs teeming with fish, turtles and balmy breezes that come to mind.

For us, this paradise is what we call home. We depend upon its riches for sustenance and, often, to make a living. It is the origin of much of the pride we feel when we say we are from the Caribbean.

Increasingly however, the reality does not live up to expectations—we may arrive at the seashore to find it covered with sargassum, the water cloudy and brown, and the horizon covered in trash; the coral reefs may look faded and tired and with barely enough fish to count on one hand…

For visitors, what version of the paradise they may find is becoming unpredictable and some may never return, depending on their experience.

For locals, it’s a different matter—as seafood prices go up and children develop rashes after swimming in the ocean, and as houses flood after each storm and tourists turn their backs on the islands, the paradise is increasingly looking less idyllic.

Sounding a wake-up call to protect the reefs

More than 100 million people in the wider Caribbean region live on, or near the coast in a complex ecosystem with the highest number of marine species in the Atlantic Ocean.

Shallow-water coral reefs, mangroves, seagrass beds, lagoons, estuaries and beaches as well as coral banks and rocky outcrops in deep waters together make up the coral reef sub-ecosystem, the richest in biodiversity in the wider Caribbean region.

Almost 10 per cent of the world’s coral reefs are found in the Caribbean Sea and Gulf of Mexico, and 45 per cent of the fish species and 25 per cent of the coral species are found nowhere else in the world. With an area of 10,429 square kilometres of mangrove forest, the adjacent North Brazil Shelf has the highest mangrove coverage of any large marine ecosystem.

This wide ecosystem supports three of the region’s major fisheries—reef fish, spiny lobster and conch—and is the foundation of the region’s tourism industry. Coral reefs, mangroves and seagrass beds also play an important part in coastal and shoreline protection under normal sea conditions as well as during hurricanes and tropical storms.

A 2016 study by the World Bank put the economic value of the Caribbean Sea alone at US$407 billion per year. Yet this precious ecosystem is at the heart of competing economic and social demands as well as natural stresses and threats.

Pollution from activities on land and at sea degrades and destroys the reef.  Many once-abundant species are now threatened or endangered.

Hurricanes are becoming more frequent and more severe, resulting in great destruction and loss of lives, leaving both the coastline and local communities more vulnerable to future shocks.

A strategy to keep it pristine

Since 1981, UN Environment’s Caribbean Environment Programme has been working with the region’s national governments to better manage and use coastal and marine resources. 

Following the establishment, in 1983, of the Cartagena Convention—the only legally binding agreement for the protection of the Caribbean Sea—the programme has relentlessly worked to gain acceptance of, and agreement upon, three protocols or agreements to combat oil spills [the Oil Spills Protocol] coastal and marine biodiversity [the Specially Protected Areas and Wildlife Protocol] and pollution [the Land Based Sources of Marine Pollution Protocol] among its 28 member states and 14 territories.

As a result of the analysis of the wider Caribbean region conducted between 2007 and 2011 by the joint United Nations Development Programme and Global Environment Facility’s Caribbean Large Marine Ecosystem Project (2009–2014), the coral reef sub-ecosystem was given priority in a regional strategy to address transboundary problems that compromise the ability of the Caribbean Sea and the region’s living marine resources to support social and ecological well-being and resilience.

In the last two years, the Specially Protected Areas and Wildlife Protocol, together with the Caribbean and North Brazil Shelf Large Marine Ecosystems Project 2015–2020, published the Report on the State of Marine Habitats in the Wider Caribbean, which then became the basis for the Regional Strategy and Action Plan for the Valuation, Protection and/or Restoration of Key Marine Habitats in the Wider Caribbean 2021–2030. The strategy recommends a series of measures to support the people, economies and ecology of the region, targeting coral reefs, mangroves and seagrass beds in particular. 

Using an integrated approach, participating governments and stakeholders from academia, civil society, the private sector, and regional and global agencies are working together to enhance management and conservation of the coral reef sub-ecosystem in support of sustainable development.

UN Environment’s Caribbean Environment Programme, as Secretariat of the Specially Protected Areas and Wildlife Protocol, has been working to revamp the Caribbean Marine Protected Areas Managers Network and establish a regional wildlife enforcement network, in efforts to improve marine biodiversity management. Assisting the region and its countries in co-executing the strategic action plan is another important step in this direction. The Caribbean Environment Programme is driving the process, building the alliances needed to ensure the integrity of Caribbean coral reefs, seagrass beds and mangroves, in the hope to bring back the paradise we all expect.

UN Environment

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