Japan has much to gain by more ambitious climate policies

21/07/2018

A heat wave is torching Japan with temperatures around 40 degrees C. Earlier this summer, torrential rain killed more than 200 people. As in other parts of the world, climate change models seem to be right in predicting more extreme weather.

However, on policy level Japan is still far from living up to the commitments of the Paris agreement. The recent revision of the Basic Energy Plan includes coal power providing 26 per cent of electricity production in the year 2030. So far, the government has not presented its long-term strategy for 2050. With investments in new coal plants, it seems unlikely that Japan can reduce emissions of greenhouse gases with 80-95 per cent to 2050, in the spirit of the Paris agreement.

As many have observed, the Ministry of Environment (MOE) is relatively weak in comparison with the powerful Ministry of Economy, Trade and Industry (METI). There are also strong links between the ruling LDP party and industry. However, the ambitious leadership of MOE and the skills in the climate department of the Foreign Ministry should not be underestimated.

One interesting initiative from MOE is the high-level group looking at finance and climate. Extreme weather events are for example causing large costs to insurance companies. The powerful Japanese banks have a large influence on energy investments. If they recognise the financial risks with investments in new coal power plants, climate policy would be facilitated. It is a hopeful sign of change in the financial sector that Nippon Life Insurance Co recently decided not to invest in new coal power plants, at home and abroad. Major bank group Sumitomo Mitsui is also adopting a more restrictive policy towards coal investments.

Another positive development is the Japan Climate Initiative, launched early this month. Over 100 companies, organisations and local governments participate and promise to reduce their impact on the climate in accordance with the Paris agreement. Among them are some of the largest Japanese multinationals.

Japan has a strong technological base and an ability to reach ambitious targets through common efforts. Other parts of the world (notably the European Union), are now drafting far-reaching plans for 2050, and China is using its large market to be an innovation leader. The government of Shinzo Abe has much to gain by more ambitious policies for long-term reduction of greenhouse gas emissions. Recent extreme weather events makes this even more clear.


High time to include environmental concerns in strategies for digitalisation and AI

20/05/2018

Greenhouse gas emissions linked to digitalisation are expected to grow rapidly. The French report AI for humanity recently presented by mathematician Cédric Villani offers important insights. In a well-written section on AI and ecological economy, the Villani task force notes: “Digital energy consumption increases by 8.5% per year and its contribution to world electricity consumption (which is growing by 2% per year) could reach 20% (moderate scenario) or even 50% (pessimistic scenario) by 2030, and therefore be multiplied 10-fold in 20 years’ time.”

The group comments on other environmental aspects: “The production of digital hardware uses large quantities of rare precious metals which are only partly recyclable, and the available reserves are limited (15 years in the case of Indium, for example, the consumption of which has multiplied 7-fold in 10 years).” Generation of dangerous waste, unsustainable mining of rare earth metals and high water consumption of data centres can be added to this picture.

Other studies have also found rapid increases of energy use and climate impact from digitalisation. Storage and processing of big data require large amounts of electricity, as well as the production of computers, screens and smartphones. Energy use linked to block-chain technology grows rapidly. In one recent study, researchers Lotfi Belkhir and Ahmed Elmeligi found that by 2040, emissions from the use of ICT could correspond to more than 14% of today´s total emissions (published in Journal of Cleaner Production (Volume 177, 10 March 2018).

Of course, digitalisation also has benefits for the environment. This is often highlighted in policy documents, for example in the European Commission´s communications on the digital single market. Intelligent transport systems in smart cities is one example, more effective energy production and distribution another.

Still, increasing energy consumption is an issue that needs to be addressed, as well as  other negative environmental effects. However, policy responses to this challenge are to a large extent lacking. Yes, there are initiatives to power data centres with renewable energy and to reduce their power consumption. But this is not enough. For example, the drastic increase of energy use for bitcoin production should have been identified earlier as an environmental issue and alternative, more efficient algorithms actively promoted.

It is high time for the ICT sector to feature more prominent in climate strategies, and for ecological sustainability to be a key issue in digital strategies. As the European Trade Union Confederation, ETUC, notes in a resolution, “the deployment of digital technologies should be accompanied by a set of regulations and standards, which will help to ensure the – social, economic and environmental – sustainability of ICT value chains. The EU must also ensure that its action on digitalisation fits with the targets of its climate, energy and environment policies.”

One particular aspect is the current rapid development of machine learning. AI strategies are rapidly being adopted by a number of governments. The European Commission aims to agree a coordinated plan on AI with Member States by the end of this year. There are positive elements in the Commission communication on AI, for example on algorithmic awareness building. But it is crucial that environmental concerns, such as energy consumption for data processing, are included among the issues to be addressed. Currently, they are not. A key issue is how AI systems are trained. There is for example an urgent need for research and development on how to apply machine learning in a way that does not reproduce earlier ecological mistakes.

The Villani report highlights both risks and positive effects of AI on sustainability: “Although AI is a potential threat to the environment, it is also a potential solution. Indeed, there are many opportunities to use AI in the field of ecology: AI can help us understand the dynamics and the evolution of whole ecosystems by focusing on their biological complexity; it will allow us to manage our resources more efficiently (particularly in terms of energy), preserve our environment and encourage biodiversity.”

Cédric Villani offers a number of recommendations, inter alia:

  • Establishing a Meeting-Point for the Ecological Transition and AI
  • Establishing a Platform for Measuring the Environmental Impact of Intelligent Digital Solutions
  • Designing AI that Uses Less Energy (data centres, cloud providers, and alternatives to today´s energy intense graphics processing units, GPU´s)

Integration of environmental concerns in all sectors is a key principle in the European Union Treaties. Strategies on digitalisation and AI should reflect that. It will make EU policy stronger, both when it comes to sustainability and to long-term competitiveness. As part of such a broader ecological approach, the European Commission should listen to Cédric Villani and his colleagues and integrate the environment in the AI strategy to be agreed this year. That would also facilitate international cooperation on this truly global issue.


Window of opportunity for EU-China environmental cooperation

25/03/2018

The creation of China´s Ministry of Ecological Environment announced last week is one of the major green news this year. The new ministry, headed by Li Ganjie, will be in charge of climate policy, marine environment and pollution from agricultural sources, in addition to the tasks of the old Ministry of the Environment.

A more powerful ministry is good news both for China and for global environmental governance. Coordination at the national level can improve. For example, climate policy can more closely be connected to other policy areas such as air pollution, water protection and biological diversity. Hopefully, disruptive infighting between different governmental bodies can be reduced. Another significant change is the creation of a new Ministry for Natural Resources, bringing together responsibilities for forestry, agriculture and land resources.

The organisation changes can also facilitate international cooperation. At a press conference on March 17, Li Ganjie emphasised China´s role in global governance `to build a clean and beautiful world´. The European Union and its member states should move quickly to make good use of this opportunity. Here are three examples of possible areas for deepened cooperation:

Air pollution. China´s efforts to reduce emissions are yielding results.  With Xi Jinping likely to stay in power for a long time, cleaner air will most probably remain one of the major items on the political agenda. Li Ganjie has already indicated that stricter limit values will be set for particulate matter (PM 2.5) for the period after 2020. The European Union and its member states are already cooperating with China in this area, but more can be done for example regarding: policy measures for better fuel quality including shipping, economic instruments for cost-efficient reduction of sulphur and nitrogen oxide emissions, coherent strategies against volatile organic compounds (VOCs), and in-use vehicles control. Deepened cooperation on air pollution is also relevant in an East Asia regional context, where well-designed involvement of third parties such as the EU can help bridge historical tensions between China, Japan and Korea.

Climate change. Since Donald Trump took office, China and the European Union are the two main drivers for continued global efforts to combat climate change. Strengthened cooperation can include  knowledge sharing on carbon taxes as a complementary strategy to the highly risky Chinese emission trading experiment, joint assessments on the efficiency of policy measures (that can feed into a developed `Policies and measures´part of the climate convention), and reducing negative climate impacts of infrastructure investments (with the Belt and Road initiative as one example).

Non-toxic material cycles. China has a crucial role in global production networks and value chains. This is also true for recycling. Last year´s ban on imports of plastic waste has raised concerns in rich countries dependent on exporting such used materials to China. However, the ban is understandable given the health and environmental problems linked to often illegal waste imports. Instead, the decision and further ambitions of the Chinese government can give useful impetus to more ambitious policies within the European Union, for example to the negotiation on the new strategy on plastic waste.  Europe and China can cooperate more closely in global frameworks such as the Basel convention and international governance of chemicals. Another aspect is the ecological effects of imported natural resources, well highlighted in a recent report by China Council and in the European Union´s conclusions on resource efficiency.

There are of course many other possible areas for deepened cooperation and much is already happening. However, now is a good time for a more coherent and strategic approach, and closer coordination between EU member states. From a geopolitical perspective, such cooperation can also facilitate long-term stability in the region, including Korea and Japan in a broader EU-East Asia context.


Canada and Europe can show green transatlantic leadership

11/03/2018

Canada is putting environmental issues high on its agenda for the G7 Presidency. `We are looking at a zero-plastics-waste charter´, said Environment Minister Catherine McKenna this week at the World Ocean Summit in Cancun. As chair of G7 this year, Canada would like the rich and powerful countries to agree on far-reaching goals for recycling of plastics and waste reduction. `We could build on goals like having 100 per cent reusable, recyclable or compostable packaging´, said McKenna.

Earlier, Prime Minister Justin Trudeau announced climate change, oceans and clean energy as some of the priorities for the G7 Presidency. The progressive agenda also puts emphasis on gender equality. Quite a contrast to president Trump. It will be most interesting to follow developments in G7 this year, including the June Summit in Charleroix, Quebec.

Canada has a long and proud tradition in environmental policy, even if the level of ambition has varied in recent years depending on the political leadership. For example, the North American country was a forerunner in efforts to protect the ozone layer, resulting in the Montreal protocol. Canadian Maurice Strong played a crucial role both for the Stockholm conference in 1972 and for the Rio conference in 1992.

With Justin Trudeau at the helm, Canada is once again in the forefront of environment policy. The introduction of carbon taxes as part of the ambitious national climate change strategy is one such example. There are also a number of promising initiatives at province level.

At the same time, the CETA agreement between Canada and the EU is scheduled to soon enter into force. It is already applied provisionally, with the EU Commission for example having solicited comments on the forthcoming regulatory cooperation.

The EU and its Member States share many values with Canada, including on environment. There are many reasons to reinforce the cooperation with an ambitious joint green agenda. For example, the EU Commission recently put forward its strategy on plastics and a number of Member States are already moving ahead. Why not start with jointly pushing for a global agreement to ban plastic microbeads in consumer products?

Such green cooperation between Canada and the European Union would also provide a well-needed contrast to the foreign and trade policy of the Trump administration.


Toyota breakthrough on magnets illustrates need for EU state aid reform

25/02/2018

A breakthrough for next generation motors, with far-reaching implications for sustainability. Toyota´s press release this week regarding “the world’s first neodymium-reduced, heat-resistant magnet” will facilitate the mass introduction of electric vehicles and new applications in for example robotics. The magnet does not use terbium or dysprosium, and the amount of neodymium needed has been substantially reduced. All these three rare earth elements have been designated as critical materials with only a few suppliers world-wide.

Japan is a world leader in material science. The government has since many years funded research into new types of magnets. When China restricted the export of heavy rare-earths in 2010, decision-makers in Tokyo increased funding for research and innovation aiming at reduced dependency of substances such as neodymium, dysprosium and terbium. This included both basic science at universities and applied research in institutes and companies.

Toyota is an impressive company with massive R&D investments. The governmental agency NEDO has also played an important role for the present breakthrough. As in other fields, NEDO has promoted new types of magnets by coordinating and partly financing efforts by the private sector. In this case, the program “Development of Magnetic Material Technology for High-efficiency Motors for Next-Generation Automobiles” has had a significant effect. The foundation in 2012 of the Motor and Magnetic Materials R&D Center (MagHEM), with the participation of government funded research institute AIST, has also been important.

The breakthrough illustrates a wider point. Japan allows for a greater amount of state aid to applied research and demonstration projects in companies than the European Union. NEDO plays an important role in this regard and has historically contributed to the commercialisation of green innovations such as the blue LED lights. The same applies to South Korea, not to mention China.

European researchers have pointed out the restrictive EU state aid rules as an obstacle to green innovations. For example, Måns Nilsson at the Stockholm Environment Institute together with co-writers makes this point in an excellent article on electric vehicles.

Reforming the EU state aid rules could be an important factor in making Europe greener and at the same time promoting competitiveness.


A carbon tax might be better for China than emission trading

04/02/2018

“I was responsible for milk quotas in my previous Commission position. Emission trading for carbon dioxide is not something I believe in.”

The director in DG Environment was sceptical when a guest asked about emission trading as a policy option back in 1992. Later, the successful Swedish green tax reform was one of the inspiration sources behind the Commission proposal for a European energy and carbon tax. The first choice for the climate experts in Brussels was a tax, not emission trading.

However, it was not possible to achieve consensus around the European Commission proposal due to objections from in particular the United Kingdom. The European emission trading system (ETS) emerged as an alternative. Now, the ETS is well established, but still has problems after many years of low prices for the certificates.

Against this backdrop, the enthusiastic statements from Brussels policy-makers on the new Chinese emissions trading system seem oversimplified.

During recent years, there has been problems in the Chinese pilot markets with inter alia too many emission permits issued and a lack of tough sanctions towards companies not paying for emission certificates.

The national system will to start with only cover power production. Experts have questioned the lack of a ”hard cap” for total carbon dioxide emissions from the sector. Instead, emission certificates will be allocated to power plants according to their electricity production.

There are a number of other question marks. In addition to the lack of a cap for total emissions, the crucial issue of effective verification is not convincingly addressed and it is unclear how transparent the system will be to the public.

An upstream carbon tax on coal and oil has been identified by the OECD and others as easier to implement than emission trading permits. Even when China has now decided to try a national ETS, there is still the opportunity to apply a carbon tax in the non-ETS sectors. Such proposals have been developed, and even if there are recent negative statements from Chinese policy-makers regarding a carbon tax, the idea should not be abandoned.

The European Commission is investing heavily in promoting emission trading in China. A few weeks ago, ICF was awarded a ten-million-euro contract to support cooperation between the European Union and China in this area.

To help China avoid the mistakes in Europe is certainly a worthy task. However, the Commission’s approach is unbalanced, strongly promoting one of the possible economic instruments. Maybe one reason is perceived economic benefits from a future linking between the European and the Chinese ETS systems, but such a linking is unlikely to happen.

A strategy to promote effective policies against climate change in other countries should take a wider view and for example devote more resources to advise on the introduction of carbon taxes. In the case of China, such a broader approach seems well-motivated.


Moving forward on climate

24/06/2010

 

Today, I was one of the speakers at a climate event hosted by IPPR, Christian Aid and WWF-UK. Below you will find a somewhat expanded version of my introductory remarks on Europe´s role in global climate politics.

——–

Two major questions are posed at this event: 

How can Europe regain its leadership?

How can it get others to follow?

As regards the leadership, I agree that the European Union was sidelined in Copenhagen and that there is a need to learn from that. The present economic crisis and austerity measures might also contribute to weakening the support for ambitious targets.

At the same time, however, it´s important to state that the EU still has what is probably the most ambitious climate policies of the major actors in the negotiations.

My first point is that the EU should not water down its commitments, which might be a real danger if Cancun is a failure and climate moves further down the policy agenda. In the short-term, defending what has been achieved must be part of the strategy.

When it comes to regaining Europe´s influence, the basis of leadership is what you do yourself.

The implementation of the 2008 climate and energy package is very important. Member States have to put forward convincing plans to reach the targets for reducing carbon emissions, improving energy efficiency and increasing the use of renewable energy sources. But Europe also has to move forward on new measures, for example on energy efficiency, carbon taxes and on improvements to the emissions trading system.

So, how do you build support for an ambitious climate policy in a time of crisis? Discussions before and at European Councils is something different from meetings of Environment Ministers.

There are a number of arguments that can convince top-level decision-makers why Europe should continue to take the lead.

First, of course, the risks of climate change. Policy-makers have to understand the dramatic consequences of a 3 or 4 degree change. There is still a tendency not to plan for worst-case scenarios. When public debate is focussing on the economy, it´s even more important  to continue highlighting possible abrupt effects from climate change.

Second, the long-term competiveness of  European industry. By not moving forward, other areas of the world will take the lead in the development of low-carbon technologies – both for climate policy reasons and to improve energy security. There is a real risk of Europe being overtaken by developments around the Pacific Ocean. Look at the green investment packages in China, South Korea. DG Climate Action has put forward an interesting analysis of this subject in a Staff Working Paper accompanying the recent Communication on a possible 30 percent reduction target.

Third, there is the issue about green jobs and green investment as a way out of the present crisis. Austerity measures will probably dominate political debate this year, causing public protests and posing risks of legitimacy to a number of European governments. There will be cuts also in environmental budgets and perhaps in development aid. But it will be difficult for politicians not to take action to reduce unemployment and for example looking at new ways of financing investment in renewable energy and power grids. This is also a lesson from Swedish experience during the deep economic crisis of the 1990s.

Fourth, the link between climate change and security is evident. The foreign and security community is starting to take climate change seriously. Present and potential conflicts in other parts of the world, energy security for Europe, conflicts over natural resources more broadly that feeds in to Europe´s security.  

Fifth, the European Union´s political need for world leadership in a time of shrinking economic influence. The people at the new positions established by the Lisbon Treaty are competing. One positive aspect of these turf wars is that all of them – Van Rompuy, Ashton and Barroso – want to be in the front on climate, at least as long there is not complete failure in global negotiations. I would particularly mention Herman Van Rompuy and his staff as a more important player in the time to come.

With so many strong arguments, I am optimistic that the European Union will continue to move forward on climate policies and play a progressive role in the global negotiations on climate. But to succeed, Europe must learn from the failure in Copenhagen.

That brings me to the second question: How can the EU get others to follow?

To a large extent, I believe the answer is trust.

One reason the EU punched below its weight in Copenhagen was the confidence gap between developed and developing nations. In other negotiations, co-operation between the EU and G77-countries has been important to achieve results: for example on the biosafety protocol of the convention on biological diversity and the export ban in the Basel convention. In Copenhagen, the BASIC countries did the deal with the US, apparently not caring too much about Europe. To change that next time, the EU must build stronger alliances both with countries like Brazil and South Africa, and with poorer countries. (Of course India, China and Russia are also important, but time does not allow me to dwell on those relations).

To build trust with developing countries, there are a number of important issues for the EU:

– delivering on fast-track financing

– supporting the Kyoto protocol as one option for post 2012

– helping countries facing climate-related environmental disasters

– confidence building measures such as developing certification schemes for emission reductions (as proposed by IPPR)

– listening to the concerns of developing countries in other areas of international environmental policies, such as biological diversity and recycling

– considering the way the EU acts in some parts of trade policy. For example the raw materials initiative – better to develop win-win policies than to threaten with economic sanctions. Or the external trade aspects of the EU2020 strategy. How the EU acts on trade issues will affect the level  trust in climate discussions. Look for win-win strategies such as free trade in low-carbon technologies.

– using possible leverage from reform of CAP and fisheries policies. There will not be enough reform in the short-term, but still there could be openings for improving trust. In the long-run, reducing agricultural production and export subsidies is necessary for a global green deal.

– delivering on Millenium Goals, inter alia on official development assistance. The June European Council stayed by the 2015 target for ODA but there is a need to defend this in the wake of the euro crisis.

– improving green diplomacy.  The Lisbon Treaty gives new opportunities, but there is also cause for concern given the present turf wars in Brussels.

Much is to be said about the road to Cancun and South Africa, but time does not allow to go deeper into the negotiating issues. Progress on issues such as forestry, hot air and verification is important. But there is also a need to look at the broader context. In the time frame 2015 – where are we then?

Most important now is to keep momentum. Let not disappointment after Cancun allow the whole process to collapse. If a legally binding agreement on emission targets is not possible in the near-term, agree on a step-by-step process.

One part of such a process could be a stronger focus on Policies and Measures, building on the relevant parts of the climate convention. Progress in this area has stalled since the 1990s.  For example, why not develop a protocol on minimum standards for energy efficiency, based on the UNFCCC?

To summarize: key for the EU is delivering on its own 20-20-20 targets, building trust with developing countries, looking for step-by-step progress in global negotiations based on policies and measures as defined by the climate convention.

Thank you.