APPENDIX 6
Memorandum submitted by Greenpeace UK
1. The International Development Select
Committee inquiry covers a broad spectrum as detailed in the guidance
notes. This breadth of area demonstrates the complex interconnections
of the impacts of climate change, sustainable development, and
poverty reduction.
2. Global climate change is the single most
pressing issue facing the world today, and can only be tackled
by phasing out our use of, and dependence upon, fossil fuel sources
of energy, and switching instead to renewable energy sources.
The developing world has an opportunity to avoid repeating the
mistakes made in following fossil fuel energy pathways by the
North, and instead, providing energy to meet people's needs in
a clean and sustainable way.
3. Greenpeace International and The Body
Shop International have launched a campaign to bring renewable
energy to the world's poorest two billion people who currently
have no access to electricity services. The campaign hopes to
secure a ministerial declaration at the forthcoming World Summit
on Sustainable Development in Johannesburg, to deliver renewable
energy to these two billion using bilateral and multilateral financial
assistance. Greenpeace UK would welcome the IDC inquiry's view
on this demand.
4. To provide such services will mean a
tenfold increase in the number of renewable systems available,
and supplying the infrastructural capacity to meet it. It is estimated
that the total investment required will be between $200-250 billion—equivalent
to the annual global subsidies that are given to the fossil fuel
and nuclear industries. It will be necessary to use public money
to kick-start the programme to deliver renewables to the two billion.
It is estimated that $10-30 billion of Official Development Assistance
(ODA) money will be required over the next 10 years, to lever
sufficient investment from companies and individuals to meet this
target. This ODA will be needed for credit to families and seed
capital for Small and Medium Size Enterprises. We hope that the
UK Government will adopt and champion this approach at the WSSD
following the leadership role that it played in the setting up
of the G8 Renewable Energy Task Force.
5. To avoid the potential impacts of climate
change caused by fossil fuel use from devastating the social and
economic development of the South, large-scale renewable capacity
will need to be developed in both the North and the South.
6. For this to happen in the South, the
methodologies used for assessing macro-project financing by northern
countries must be changed, as they are currently skewed towards
the peculiarities of fossil fuel power plants and are inappropriate
for large renewables projects that entail higher up-front costs.
The institutions that facilitate North—South energy investment
need to adjust policies appropriately to meet the challenge of
creating clean, sustainable energy pathways in the South.
7. The UK Government is a signatory to the
Kyoto Protocol and the initiator of the G8 RETF report. However,
this commitment to tackle greenhouse gas emissions and climate
change is not reflected in its foreign direct assistance. The
UK Export Credit Guarantee Department (ECGD) provided support
for 140 fossil fuel and nuclear power generation projects, and
fossil extraction projects, in 38 countries between April 1992
and April 2001. The total contract value was £15.85 billion.
This means that the UK Government has supported an average of
nearly £1.76 billion worth of fossil and nuclear power generation
projects in every year since the United Nations Framework Convention
on Climate Change was signed.
8. By a conservative estimate, these projects
will emit at least 14 million tonnes of carbon per year for as
long as they are in operation.[1]
This is more than a third of the emissions from the UK's own power
generation sector (41.917 mtC in 2002)[2]
and represents around 300 million tonnes over 20 years of plant
operation.
9. In recent years the UK ECGD has done
£3.5-£4 billion a year in business. This is around twice
the size of Britain's international development budget. In 1999-2000
civil business was 55 per cent of the total. Power generation
and transmission were 39 per cent of total civil business (or
around 21.5 per cent of total business)—and energy investment
another 10 per cent (5.5 per cent of total)[3].
Expenditure on power generation has averaged around 20 per cent
of all ECGD lending since 1992.
10. In contrast to this, to date, the ECGD
has not invested in any renewable projects, other than in large
and medium sized hydro-dams.
11. Through the ECGD the UK Government is
effectively exporting global warming and encouraging developing
countries to follow an energy pathway that will have serious climactic
repercussions that will impact hardest on those countries themselves.
This is even more scandalous when we consider that of $119.75
million (£82.6 million) that the UK gave in bilateral ODA
commitments to energy in 1999, only $0.09 million went to renewable
energy. This means only 0.07 per cent of total UK ODA money for
energy development went to supporting renewables.
12. The UK Government has taken a lead in
tackling climate change but through the ECGD it continues to support
patterns of development that are incompatible with sustainable
development, poverty alleviation and climate stabilisation. The
G8 Renewable Energy Task Force report indicates that renewables
can meet the energy needs of developing countries, but UK assistance
for clean energy development continues to decline.
RECOMMENDATIONS:
1. The developing world stands at an energy
crossroads and it is critical that the pathway of clean, sustainable
energy prevails, to avoid locking the South into a damaging and
unsustainable, long-term, energy trajectory. If development in
the South is achieved in the same way as that in the North, the
global consequences will be catastrophic. The resulting climate
impacts will condemn millions of the world's poorest people to
increased drought, floods, disease and extreme weather events.
The infrastructures and economies of the world's poorest countries
will be severely and negatively impacted, putting a block on future
development.
2. This is an issue that needs to be addressed
with the utmost urgency, and the UK Government should make use
of the forthcoming World Summit on Sustainable Development to
address the issues raised by the IDC—poverty, climate change,
sustainable development and energy.
3. Greenpeace recommends that the UK Government:
— (a) Take a lead at the WSSD to
secure,
— a heads of government commitment
to facilitate the delivery of renewable energy to the two billion.
— international ODA and public
funds to kick-start the necessary investment.
— a timeline for delivery.
— (b) Increases its ODA commitments
accordingly.
— (c) Puts an end to the funding
of fossil fuel and nuclear powered energy projects in the South
and instead directs investment to renewables, changing the ECGD
accordingly.
— (d) Stimulates the UK domestic
renewables market and ends subsidies to fossil fuel and nuclear
power generation and extraction/processing.
Greenpeace UK
January 2002
1 Based on an estimate of 10,588MW of coal-fired generation,
1,508MW of gas-fired generation and 600MW of oil-fired generation.
These estimates are derived from data in ECGD annual reports from
1993-94 to 1999-2000 and because data in the ECGD reports is not
complete, the estimate is likely to fall short of the total amount
of power generation supported by some distance. Nor does it include
any power generation projects financed in 2000-01 as data on this
year has not been made available. In addition, the conversion
factors used to calculate CO2 emissions are for new
plant installed in 1998 in Annex One countries, whereas plant
installed with support of the ECGD will in some cases be of earlier
design and therefore may be of lower efficiency. The conversion
factors are taken from tables supplied by The Greenhouse Gas
Protocol-a corporate accounting and reporting standard, World
Business Council on Sustainable Development and World Resources
Institute, 2001. See www.ghgprotocol.org. Conversion factors for
Annex 1 countries in 1998: 0.857 tonnes CO2/MWh for
coal; 0.367 for gas; and 0.568 for oil. It is assumed that plants
are in operation 60 per cent of the time-ie 5,242 hours per year.
[10,588 x 5,242 x 0.857 = 47,565,467 tonnes CO2 per
year from coal. 1,508 x 5242 x 0.367 = 2,901,111 tonnes CO2
per year from gas. 600 x 5242 x 0.568 = 1,786,474 tonnes CO2
per year from oil. 47,565,467 + 2,901,111 + 1,786,474 = 52,253,051
tonnes CO2 per year from coal, gas and oil. Using conversion
factor of 3.666, this yields 14,250,832 tonnes per year of carbon. Back
2
DTI Energy Statistics Digest 2001. Back
3
From ECGD Annual Report and Resource Accounts, 1999-2000. Back
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