Why Energy is Inextricably Linked to Environment
Chairman of the Board, Fundación Avina
February 26, 2014 | 1597 views
Each year at the Skoll World Forum, nearly 1,000 of the world’s most influential social entrepreneurs, key thought leaders and strategic partners gather at the University of Oxford’s Saïd Business School to exchange ideas, solutions and information. We asked a number of speakers to discuss the critical issues, challenges and opportunities underpinning their sessions in advance of the Forum to ground a richer debate both online and in Oxford.
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Founder and CEO, New Teacher Center
Lead on Social Impact Investment, UK Department for International Development
Co-Chair, Bill and Melinda Gates Foundation
Executive Director, Verite
President and CEO, and Senior Director, Sustainability, Autodesk Foundation and Autodesk, Inc.
President and CEO, PATH
CEO and Co-Founder, Riders for Health
Founder, President, PeaceWorks
Chairman and CEO, Royal DSM
President and CEO, Landesa
Principal, Junxion Strategy
Project Leader, Dalberg Global Development Advisors
Senior Vice President, Investor Relations & Operations, Root Capital
Chairman of the Board, Fundación Avina
February 26, 2014 | 1597 views
The effects of climate change are now apparent, driving a global move toward greater efficiency and adoption of renewable energy sources. Approximately two thirds of global emissions currently come from the burning of fossil fuels. That trend if unchecked virtually guarantees a global temperature increase of over 2 degrees centigrade over the next fifty years. But energy generation also impacts environment in terms of biodiversity, since drilling, dam and energy transmission projects are responsible for significant reductions in habitat. Perhaps most visibly, our energy generation decisions affect the quality of water and air, as the residents of Delhi, Beijing and “fracked” rural districts of the USA will attest. Of course the environment is also a source of energy, providing renewable alternatives to fossil fuels in the form of wind, water and sunshine.
As a Latin American foundation, Avina has twenty years of experience working alongside our partners in sustainability challenges, which often interact with the region’s incredible natural resource wealth. South America alone is home to 50% of the world’s biodiversity, 25% of its tropical forest, and one third% of its fresh water resources. Add to that the incredible concentration of flora and fauna in Central America, and the extensive marine resources which stretch from the Colorado River estuary in Mexico down to the Beagle Channel in Patagonia, and you have a global environmental powerhouse.
The energy grid of Latin America is diverse, but on the whole incorporates fossil fuel alternatives such as hydro and sugar cane ethanol on a much greater scale than other regions. Of course, Latin America is also home to important fossil fuel stocks. Venezuela has the largest proven oil reserves in the world, with Mexico, Brazil and Ecuador also making the list of key international oil exporters. Although changes in land use (primarily deforestation) have long represented the greatest source of emissions, fossil fuel use for energy and transportation has been the fastest growing source of emissions over the past decade. Success in moving citizens out of poverty has sparked increasing demand for energy which is leading to recurring conflict as national governments scramble to meet the energy needs of the population.
In the past few years, we have witnessed disputes in Ecuador between indigenous communities and the oil companies who degraded their forests, as well as massive protests in Chile and Brazil against dam projects in the Aysen and Xingú, respectively. These conflicts highlight the very real tradeoffs that energy generation implies. The energy sector is a clear example of the complexity of sustainable development, which seeks balance among different tensions: short term and long term, environment and economy, community interests and national interests, protest and compromise. In the midst of conflict and complexity, how can a society establish an effective platform for making energy decisions that will affect this and coming generations? For Avina, the way in which Latin America is responding to these energy conflicts could offer interesting models for other parts of the world dealing with similar challenges.
For example, a key lesson has emerged from the protests in the Aysen region of Chile: make energy decision-making transparent and participatory. Avina and its Chilean partners convened an open energy dialog at the national level, inviting utilities, the government and environmental organizations to use the same data and projections to propose different scenarios for meeting Chile’s energy needs to 2030. The public debate brought the question of energy security to the forefront, eventually involving presidential candidates in a televised discussion of the country’s energy future. This participatory approach allowed a group of civic organizations to influence government energy policy leading to a landmark national long-term energy plan for Chile, released in 2013, which includes ambitious targets for efficiency gains and renewables.
As the energy matrix changes, it also becomes increasingly important to update the regulatory framework governing the energy grid. Unfortunately, in Latin America, like much of the world, regulations not only do not provide incentives to efficiency and renewables, but often offer disincentives. In Argentina, Brazil and Uruguay, Avina has worked with different civil society organizations to penetrate the labyrinth of government regulatory decision-making in order to influence the formulation of new regulatory policy. As a result of the efforts of many different leaders and organizations, Brazil recently passed new codes for admitting small generators onto the grid who can now sell energy to suppliers. Similar regulations have been implemented in Uruguay and studies are underway in Argentina.
These are just two examples among many, but as experience mounts, some key success factors become clear. First, a diversity of interest groups representing different points of view have to actively participate in energy decision-making. Too often, these decisions take place behind closed doors. Effective dialog requires all participants to use objective technical data and engage transparently in the process. The platform for public dialog should be visible, balanced and respect all legitimate points of view. Brokering organizations like Avina contribute by convening, offering credibility, and ensuring a fair process.
In the end, the challenges of balancing energy needs and the environment require a change in attitude. Environmentalists need to be technically informed, networked into coalitions and prepared to negotiate on a level playing field. Governments and utilities must recognize that effective energy policy now depends on opening up the decision-making process, incorporating diversity in participation, and being open to novel alternatives and innovation. Whether at the local level or the national level, getting the policy formulation process right is one of the keys to a sustainable energy future.