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So... who was missing in Buenos Aires?

Paul Metz expresses concern at the missed opportunities for advancing renewable energy sources in Buenos Aires.

The author is the Executive Director of e5, the European Business Council for a Sustainable Energy Future, based in The Netherlands. He is also Director of the consulting agency INTEGeR which advises business leaders on sustainability.

After Kyoto, constructive stakeholders had high expectations for Buenos Aires. Many seemed not aware that Kyoto was indeed a breakthrough, but at a price. Just as in earlier summits, some already agreed-upon principles and targets had to be sacrificed for a consensus on new progress.

In 1992, it was agreed in Rio de Janeiro that the developed countries would reduce their greenhouse gas emissions without commitments by developing countries. The base year was 1990; the year for first reductions was 2000. Three years later, the First Conference of the Parties to the UN Framework Convention on Climate Change formulated the Berlin Mandate intended to set quantitative targets and time-frames for reductions by the industrialized countries, with a delayed first target in 2005 and significant reductions by 2010.

We now know that in Kyoto — despite nice words on “early action” — the year 2005 almost disappeared from the timetable and moderate reduction targets for the period 2008-2012 were accepted. Urgently needed instruments and compliance mechanisms stayed totally undecided. Only financial trading instruments were chosen instead of other “market-based” options. The session in Buenos Aires on this “unfinished business” was abused to restart the discussion on obligations for developing countries. It brought no progress on the many details, just an inventory and agenda for two more years of negotiations.

Inaction is too popular, good will is too scarce, delay tactics are too successful and political courage is too rare. And the unnecessary and inefficient use of polluting energy continues.

What is sustainable energy business?

The European Business Council for a Sustainable Energy Future — e5 — was founded in 1996. The Council promotes the benefits of renewable energy sources, a shift to natural gas with cogeneration and improved efficiency in the use of energy in houses, appliances, buildings, equipment, transport and communication. The short name e5 symbolizes the synergy between energy, environment, economy, employment and efficiency.

Our, large and small, members and business associations represent thousands of companies in all business sectors. e5 is a cross-fertilizing international network and organizes constructive dialogue with European, national and international authorities. Environmental, scientific and labour non-governmental organizations are advisors and, with the US Business Council for Sustainable Energy, its sister organization in the United States, e5 has participated in the “United Nations-climate circus” since the Second Conference of the Parties in 1996 in Geneva. We address all plenary meetings of the Conference of the Parties to the Climate Convention and the Ad hoc Group on the Berlin Mandate (AGBM) as the voice of sustainable energy business that does not support the defensive and delaying positions of other business representations.

Our members offer most of the many products and services that are currently available and which are cost-effective and save energy. These products and services bring worldwide economic development, innovation and employment. They also, importantly, reduce our dependency on fossil and nuclear fuels in a profitable way and, as an added free benefit, reduce emissions that harm the environment and our health as well as most likely contributing to climate change.

All “sustainable energy” businesses offer partial solutions aimed at improving “carbon-efficiency.” They will all benefit from correct pricing of emissions, the elimination of “wrong” subsidies, and high efficiency standards.

These many and varied businesses include:

  • public transport, and multimodal and combined transport services;
  • insulation materials and services, including insulating glass;
  • bicycles;
  • cogeneration of heat and power;
  • automotive fuel cells;
  • emission traders and brokers;
  • car-sharing services;
  • biomass;
  • intelligent and energy-generating buildings and houses;
  • efficient lighting systems;
  • teleworking and tele/vidoeconferencing;
  • fuel-efficient (3 litres/100 km) cars;
  • stationary fuel cells;
  • heat pumps;
  • climate-friendly cooling gases;
  • hydrogen technologies;
  • travel information services;
  • light rail- and new water-transport systems;
  • local holiday parks;
  • solar water desalination;
  • information and communication technologies;
  • regional planning and city design;
  • geothermal;
  • windmills; solar thermal and PV-systems;
  • heat/cold storage systems;
  • demand-side-management services;
  • financing services;
  • architectural services;
  • agri-greenhouse systems;
  • integrated construction materials; and,
  • zeppelins, amongst many others.

Which policy approaches are best?

The competitive position of these relatively new products and services is still hampered by the current global political and economic framework which provides many institutional privileges for the traditional energy structure. Governments now have the responsibility to remove these obstacles to improve carbon efficiency. This should, in the first instance, be by a factor of four.

Governments agreed in Kyoto on the necessity of emission reductions and should now introduce policies to reward the producers, investors and consumers who are taking cost-effective “no regrets” measures. We support this market-based approach which stimulates and activates energy markets, thereby creating a high-level playing field through the introduction of full pricing for resources.

Energy markets should be liberalized, but not without the parallel introduction of environmental pricing. In Kyoto, the states have chosen to do this by flexible mechanisms such as emissions trading, joint implementation and a clean development mechanism. Pilot projects are needed so as to learn from firsthand experience. These projects should be initially undertaken as national activities and within the European Union.

It will take years to implement emissions trading worldwide and really control and reduce emissions. An immediate start is needed. At the same time, other instruments are urgently needed to stimulate the market until the year 2005. During this period the “no regrets” approach — cheap and profitable reduction options — can be harvested by domestic policies.

The preferred “market improving” policy options that would stimulate companies and people to save money whilst improving carbon efficiency include:

  • high energy-efficiency standards for buildings, cars and appliances;
  • elimination of perverse subsidies and tax incentives and the eco-social modernization of subsidy and tax structures;
  • agreements on energy benchmarks for sensitive industrial sectors; and,
  • “renewable portfolio standards” and demand-side management for energy and transport service companies.

What is the economic development perspective?

Sustainable energy will not be scarce but abundant! The technologies are available now and will only become cheaper with the growing demand as privileges for fossil energy use are phased out. The sunny and windy areas around the world should, and will be, utilized so that they become the primary sources for energy production. Efficiency improvements from between a factor of four to a factor of ten will reduce the demand dramatically, to levels that can be met by renewable energy sources

The barriers to make this happen can be overcome.

“We just have to reject ‘common sense’ and traditionally-accepted scientific knowledge,” says Kazuo Inamori, founder of the Kyocera company, Kyoto, Japan.

“We just have to tunnel through the cost barrier,” says Amory Lovins, leader in energy efficiency.

“We just have to adopt equal per capita emission rights,” says the African Climate Group.

“We just have to correct the prices,” says Ernst von Weizsõcker, founder of the “Oekosteuer” (ecological tax reform).

“We just have to educate the American people,” says Bill Clinton, President of the United States, the largest group of emitters.

“We just have to have political courage,” says Raul Estrada-Oyuela, chairman of the Ad hoc Group on the Berlin Mandate.

So, the essential third factor missing in Buenos Aires was that only the dancers were there. Neither the inspiration nor the motivation to dance were there. We missed the opportunity to show courage and to trust in human creativity. We missed the opportunity to show faith in the capacity of the market to adjust to new scarcities and to be able to reallocate production factors optimally.

Very few individuals in our human society can inspire and create change. Business and political leaders — WHERE ARE YOU? You should be showing us the way to reach both global prosperity and global sustainability.

Further information

Paul Metz, European Business Council for a Sustainable Energy Future, Stalen Enk 45, NL-6881 BN Velp, The Netherlands. Fax: 31-263-613654. Email: Web:

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