The pollution credits business

The wind industry seems not to have fully recognised the potential of the United Nations' joint implementation (JI) initiative under which developed countries accumulate environmental credits by investing in pollution saving measures in the less developed world.

Eight utilities (the E7 Group) met in Cologne to draw up a strategy for JI activities and projects.

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Joint implementation (JI) of measures to reduce air pollution by developed and developing countries is a concept gathering both status and momentum. Eight large electricity utilities from the world's strongest industrial nations met in Germany in mid June with representatives of utilities based in poorer countries to discuss JI. Their aim was to ponder and push on existing and future activities and projects. These they want officially recognised as JI projects under the five-year Activities Implemented Jointly (AIJ) pilot scheme launched at the Berlin Convention on Climate Change held in March 1995. German Environment Minister Angela Merkel also attended the utility summit, held in a top Cologne hotel overlooking the river Rhine, bestowing on the initiative a warm glow of political goodwill.

As a prime candidate for JI, wind energy projects would seem to be ideally qualified. Indeed, of the 54 projects around the world which have registered an interest in qualifying under the JI pilot scheme, a handful are wind schemes. Among them, German utility RWE is planning a wind farm in Morocco; a 20 MW wind farm for Costa Rica is on the cards; a NAFTA commission based in Montreal is conducting feasibility studies into two wind farms in Mexico; and German Preussenelektra is working on a bilateral agreement with Latvia. All of these project sponsors are hoping to get their schemes registered as JI initiatives.

Yet these are small steps, considering the vast JI potential of wind. In JI discussions so far, wind energy seems to have played no more than a minor supporting role, only getting a couple of mentions in JI literature distributed at the Cologne summit. Yet, if Merkel is representative of other national environment ministers, wind would be a welcome addition to the JI pot of ideas. She said in Cologne: "I am of the opinion that in the pilot phase, experience must be gathered with as many and varied AIJ projects as possible. They should be carried out in as many different countries and frameworks as possible. Only then will we be able to collect enough information to put the mechanism into practice across the board."

European Wind Energy Association executive director Christophe Bourillon says he is well aware that JI is an opportunity which his members are missing out on. "Clearly we have to raise the profile of wind in JI discussions and it would seem EWEA is the best placed organisation to do the job," he says. The main problem with JI, he says, is that making an application for a project to be included in the scheme is far from easy. "The paperwork is obscenely complicated and difficult to cope with. I am preparing a briefing paper to help our members with it," he says.

The eight utilities in the E7 Group, as their club is named, are Electricité de France, Italian ENEL, the German RWE, two utilities from Japan (the Kansai and Tokyo Electric Power Companies), another two from Canada (Hydro-Quebec and Ontario Hydro) and last but far from least, Southern California Edison from the United States. They met in Cologne to draw up a strategy plan, motivated by the conviction that (arguably) more can be achieved to protect the climate through environmental investments in developing countries than by spending on preventing emissions of the last tonne of pollutant at home. Once the pilot scheme is over at the end of 1999, the utilities hope to be able to clock up environmental credit points at home -- for example relief on a CO2 or energy tax -- for their investment in JI schemes abroad. It looks as though the German utility sector is pressing for some kind of acknowledgement for its JI investments under the pilot scheme, but Merkel would not be drawn on the issue.

Stressing his support for the E7 work, John Maree from the South African utility Eskom said: "Joint Implementation measures involving the supply of electricity play an important role in economic growth which then helps the environment. Poor people are busy just surviving. They can't think about protecting the environment. And a person without electricity is not a player in the economy. Only when the people have electricity can they start economic activities."

Some challenged his statement, asking whether environmental protection measures could ever keep up with the pollution created by new economic activity. But Maree's views were echoed by spokesmen from Indonesian and Polish utilities. And RWE chairman Dietmar Kuhnt pointed out that there are around two billion people in the world without access to electricity -- all potential new customers for utilities or other electricity generators.

The E7 Group intends to carry out short term pilot projects, registered as JI, in the electricity sector with close co-operation between industrial and developing countries. Wind plant are not involved in the three new JI projects announced -- a photovoltaic project in Indonesia, improvement of coal power station efficiency in Jordan, and a small hydro power station in Zimbabwe. Merkel praised the E7 utilities for their efforts on JI, adding: "I find it especially exciting that the E7 are involved with renewable energies and improving energy efficiency."

Efforts to publicise the concept of Joint Implementation are being made by the German environment ministry. It is to stage an international workshop on JI at the TerraTec Forum in March 1997, to be held in Leipzig, at which an E7 summit may also be held. The ministry has also commissioned various research studies on JI. The Wuppertal Institute for the Climate, Environment and Energy is currently analysing four projects in order to lay a framework for all JI projects. One of these is for renewable energies. And a meeting of scientists is being organised to discuss the further development of JI.

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