Copenhagen summit: Private sector money key to clean energy future

http://observer.ug/index.php?option=com_content&view=article&id=6322:copenhagen-summit-private-sector-money-key-to-clean-energy-future-&catid=38:business&Itemid=68

Written by Devapriyo Das

Sunday, 06 December 2009 17:32

Recent drought scorched dry this sorghum field in Katine A decisive climate change conference opens today in Copenhagen, Denmark, with developing nations seeking massive capital injections to help grow their economies while reducing carbon-emissions. President Yoweri Museveni is part of the delegation representing Africa’s interests at the United Nations Climate Change Conference, which runs from 7-18 December. Uganda says it wants access to substantial credit lines in the coming years to help it invest in renewable energies and clean development mechanisms, and will seek private sector involvement to help execute these ambitious plans. INVESTING GREEN Carbon-dioxide and other greenhouse gas emissions, produced by burning of fossil-fuels, are believed to be contributing to the deteriorating climatic conditions on the planet. As a result, countries in sub-Saharan Africa are having erratic rainfall patterns, drought and desertification. Most of the region’s economies are heavily dependent on agriculture, which makes them all the more vulnerable to shifting weather patterns. They stand to lose the modest economic gains made in recent years, and have the least capacity to adapt to changed environment. They also face the challenge of switching from “dirty” sources of energy like coal and oil, to cleaner solar, wind and hydro power. The countries likeliest to succeed will be those best able to invest and create jobs in alternative energy sectors, while maintaining industrial growth. So where does Uganda stand? David Ebong, Chairman of Uganda’s Parliamentary Forum on Climate Change says that “Clearly, for Copenhagen, the key focus is on flexible mechanisms for implementing the Reducing Emission from Degradation and Deforestation protocol; that’s very critical for Uganda. Also how we can jump-start a conducive environment for implementation of Clean Development Mechanism.”  The shift from heavy fuel-oil powered electricity plants, and also, making Ugandans less dependent on charcoal for home consumption, will protect forest cover and cut atmospheric carbon. The Forum believes this can happen if the private sector partners with government in financing the switch to clean technology.  “Peoples’ lives have been changed world over by private sector led innovation”, Ebong continues. “That’s precisely our position for adaptation.” RECYCLING AND ALTERNATIVE ENERGIES According to Dr Henry Aryamanya-Mugisha, the Executive Director of the National Environment Management Authority (NEMA), “Uganda will be advocating for transfer of appropriate technology, not on commercial terms, but terms conducive to us in the developing world.” NEMA is an integral part of Uganda’s representation at the summit. He says the Private Sector Foundation, Ministry of Finance, and the Mayor of Kampala will participate in the Copenhagen summit, helping identify avenues for private sector involvement. He particularly signals solar and hydro power as ripe for private investment. However, solar energy, as of now, can be used for lighting, cooking and domestic purposes, and not in heavy industry. Hydropower, which produces few carbon emissions, can have a negative environmental impact as it involves damming rivers and flooding those areas that rest behind the dam. Dr Aryamanya-Mugisha says trees are being planted to counter these problems by protecting catchment areas, as evidenced in the construction of the Bujagali dam in Jinja. He also cites recycling of industrial effluents as another area that should interest the private sector. Referring to Uganda’s burgeoning oil sector, he asks, “Shouldn’t they bring in the private sector that has got the necessary experience and reputation to assist in the management of waste – solid and liquid?” Similarly, Dr Aryamanya-Mugisha thinks it would make sense to support investment in effluent treatment plants by granting them tax breaks. This would also go a long way in cleaning-up Uganda’s major industry in hides and leather goods, whose harmful chemical by-products are often discharged untreated. Moreover, Uganda’s tourism industry could attract funds under the UN’s Clean Development Mechanism for investment in eco-lodges, while its game parks and forest reserves could generate revenues through trade in carbon credits. ABSORPTION CAPACITY Uganda, however, is no stranger to good intentions and bad implementation. “If the Copenhagen summit materialises with binding agreements, have we created an enabling environment to implement these projects?” Ebong asks. “No”, he replies. With Africa expected to ask for up to $100 billion per year from developed nations in Copenhagen, the Parliamentary Forum on Climate Change doubts if Uganda has the capacity to commercially exploit the climate change windfall being presented. “This excuse of lack of absorption capacity, I think, should not arise”, Dr Aryamanya-Mugisha insists. “If you look at the challenges of climate change, relating to flooding, droughts, lack of rainfall and threatening food security, infrastructure destruction because of flooding; these challenges are immense and very costly.” He says these funds will need to be deployed over decades, whereby energy-efficient technologies will substitute obsolete systems which would otherwise take years to replace. However, making the most of the summit will require a strong policy framework on environmental management and fiscal incentives for green investors. Some framework already exists. “There are no taxes charged if you import solar panels”, Aryamanya-Mugisha offers by way of clarification. “If you bring in old vehicles, there is a disincentive: you pay a higher tax. We have a ban on polythene materials. If an investor comes in producing environmentally friendly materials, we [NEMA] are proposing some tax incentives be given to these people.” INCENTIVE FRAMEWORK Also, there are attempts at reducing carbon emissions by corporate firms. “I think that we are very aware of the climate change situation,” notes Marilyn Hill, Country Manager, Neptune Petroleum (Uganda). “We’re making every effort to use solar energy. When we’re testing oil, we will be using the Evergreen Burner which is more efficient and non polluting. We are watching our carbon footprint and trying to get work done by Ugandans so as not to fly in so many foreigners.” She also expects the Copenhagen summit to highlight the use of carbon credits, which she believes will be “essential” in mitigating climate change. Standard Chartered bank is also ramping up its environmental role. Its Head of Corporate Affairs, Herbert Zake, says that in conjunction with NEMA and National Forestry Authority, the bank is “looking at planting trees in central, northern, eastern, western Uganda. These are areas where we have a presence and want to make a difference to local communities.” A more environmentally responsible private sector will likely sustain clean development in the long run. “What I think needs to be done”, says Alex Muhweezi, CEO of private sector consultancy Future Dialogues, “could be to try to convince the multinational corporations, those whose capital and business networks interact with issues of climate change in other parts of the world, to really champion the standards and behaviours as they are enforced in the western world. So when they are here, they don’t take advantage of the ignorance of the problem.” Hits: 1128