Matrix Renewables and ALLCOT partner to assess Greenhouse Gas emissions avoidance in Colombia and Chile
Matrix Renewables PV plants will generate carbon credits representing more than 486,000 tons of CO2 equivalent per year avoided between the two countries under the Waste Activities Program for Latin America, registered by ALLCOT.
Colombia, February 07, 2022. Matrix Renewables, the TPG Rise-backed renewable energy platform, and ALLCOT Group, a leader in greenhouse gas (GHG) emissions management tools and strategies for businesses of all sizes, today announced a partnership to drive significant carbon emissions equivalent avoidance through photovoltaic solar energy plants in Chile and Colombia.
The project includes the construction, development, execution and operation of Matrix Renewables solar plants in both countries, under the Waste Activities Program for Latin America registered by ALLCOT on August 20th, 2020. The two projects, one in each country, have the cumulative potential to generate Certified Emission Reductions equivalent to 486,000 tons of CO2-eq per year (86,000 TnCO2-eq in Colombia and 400,000 TnCO2-eq in Chile). ALLCOT is responsible for the assessment, registration, monitoring, and issuance of the credits generated from the projects.
This milestone, which promotes the implementation of emission reduction projects associated with renewable energy, will have as its main achievements the avoidance of CO2 emissions, the compliance with the Nationally Determined Contributions (NDC) of Colombia and Chile and will demonstrate the ongoing commitment by both multinational companies to lead climate change mitigation projects and initiatives.
About Matrix Renewables
Matrix Renewables is a renewable energy platform created and backed by global alternative asset manager TPG and its $13 billion impact investing platform TPG Rise. Matrix Renewables’ current portfolio is comprised of 2.1 GW of operational, under construction, or near ready-to-build solar PV projects and a further 2.7 GW pipeline of renewable energy projects under development, across Europe, US, and Latin America. For more information, visit matrixrenewables.com or send an email to email@example.com.
ALLCOT Group, founded in 2009, offers knowledge, experience and management to initiatives to reduce the emission of Greenhouse Gases (GHG) to actively combat the climate crisis under Article 6 of the Paris Agreement and aligning with the 2030 Agenda and its 17 Sustainable Development Goals (SDGs).
ALLCOT will participate in two projects under Article 6.2 of the Paris Agreement for the generation of ITMOs.
ALLCOT has signed two consulting contracts for projects in Senegal and the Dominican Republic aiming to provide ITMOs to Switzerland and Sweden, respectively
An important difference between the approaches of Article 6 of the Paris Agreement and the market mechanisms of the Kyoto Protocol (CDM) is that, under the Paris Agreement, all countries have emission reduction targets in the form of Nationally Determined Contributions (NDCs). Article 6 of the Paris Agreement provides countries with a framework for cooperation in their efforts to limit climate change through the use of carbon units, called International Transfer Mitigation Results (ITMOs) to achieve their NDCs. The generation of ITMOs contribute to increasing the global ambition committed by countries under Article 6.2 of the Paris Agreement by promoting low-carbon technologies and accelerating the implementation of projects and programs. Cooperative approaches are a fundamental tool to achieve the Greenhouse Gas (GHG) emission reduction goals established by each country in its NDC. All projects and programs that voluntarily participate in these cooperative approaches must promote sustainable development and ensure environmental integrity as well as transparency.
At the end of last year, ALLCOT Group signed two contracts for ITMOS generation projects from two different countries:
- Senegal: project for sustainable waste management in Africa funded by the Foundation for Climate Protection and Carbon Offset KLIK (KLIK Foundation). ALLCOT Group will provide its consultancy services for the elaboration of technical documentation (Mitigation Activity Description Document – MADD) that will serve as the basis for the subsequent governmental approval and commercialization of ITMOs to comply with the Swiss NDC.
- Dominican Republic: it is a mitigation project managed by a Norwegian company, AMMADOL BIO, which consists of reducing greenhouse gases generated by the Agricultural and Farming Sector in the Dominican Republic through the implementation and transfer of Dutch technology to capture biogas and provide ITMOs to Sweden. Like with the Senegal project, ALLCOT Group will provide its consultancy services for the MADD elaboration.
Since its inception, ALLCOT Group has been committed to guaranteeing environmental integrity, transparency, and promoting sustainable development aligned with the 2030 Agenda and its 17 Sustainable Development Goals (SDGs) allowing for solid governance agreements.
With more than ten years of experience, the ALLCOT Group technical team is specialized in the market mechanisms of the Kyoto Protocol and, with the signing of these two new contracts, reaffirms and strengthens the trajectory to be one of the main players in the implementation of Article 6 of the Paris Agreement.
Written by Enrique Lendo, Business Development Mexico Advisor.
The World Economic Forum (WEF) released its 2021 Global Risk Report last week. Climate and environmental risk were ranked at top in its tables in terms of likelihood and second, after Infectious diseases, in terms of impact. It is highly likely that a standard will be set for countries and companies where climate impacts will be perceived as riskier than economic, geopolitical and technological ones.
Climate change impacts capital markets through two types of risk. The first one is Physical Risk which results from damages to property, infrastructure and land. The other one is Transitional Risk which is associated with changes in regulations, technology and consumer/investor preferences towards low carbon economic growth. Risk exposure varies from one country to another depending on geographical, physical and economic conditions. Mexico is a highly vulnerable country, with a high physical risk profile, due to its geographical location between two oceans, complex topography and irregular human settlements.
In 2020, global greenhouse gas went down 7% due to mobility restrictions from the Pandemic. However, temperature records were broken once again with a cumulative increase of 1.25 °C with respect to industrial levels. To avoid catastrophic impacts, scientists recommend global temperature increase to stabilize at 1.5 °C by the end of the century, leaving a very limited space for maneuvering.
At higher temperatures, climate impacts and associated physical risks exacerbate. According to Swiss Re, 2020 was the fifth costliest year for insurance companies in 40 years, with $83 billion dollars in losses. Cyclone Amphan displaced 4.9 million people in India and costed $13 billion dollars in losses, while hurricanes in the United States and Central America displaced 200 thousand people and costed $40 billion dollars. For financial institutions, physical risk materializes through exposure to companies, buildings and countries which are impacted by climate change. Insurance companies face losses and increase their sure primes, banks face loan defaults and assets in impacted zones tend to depreciate.
Transition risk has been increasing because more countries have committed to “net zero” targets and more consumers and investors demand companies to act responsibly. In his first day in office, Joe Bide signed executive orders to rejoin the Paris Agreement on climate change and revert Trump´s Administration initiatives that lowered standards on environment and climate change issues, while Janet Yellen promised to strengthen climate risk policies in the financial sector. Biden´s Administration will invest $2 trillion dollars to finance the transition towards low carbon growth and will sanction with trade tariffs polluting countries.
Climate risk is transforming capital markets. It is now riskier for banks and investment funds to finance oil and gas projects than clean energy ones, because the latter are more cost effective and better accepted by society. In 2021, global investment in clean energy will overtake investment in fossil fuels. Last week, Larry Fink, CEO of BlackRock, the largest asset management company in the world, sent its yearly letter to CEOs reaffirming its commitment with decarbonizing its assets. Other financial industries, central banks and regulators around the world are following through.
Mexico´s prime trade and investment partner is committing to a low carbon future while the financial industry is embracing and unprecedented transformation. Oil and gas companies are reinventing its strategies and citizens demand greater responsibility from governments and corporations. Mexico is one of the most vulnerable countries to climate change impacts.
What will its strategy be to manage risk and capitalize the transition?
Article originally published in Reforma news paper.
Written by Enrique Lendo, Business Development Mexico Advisor.
Twenty-twenty marked the beginning in the way to Glasgow, city in the United Kingdom that will host the United Nations Climate Conference in 2021, also known as the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26). The Conference was originally scheduled for late 2020 but, due to the COVID-19 pandemic, was postponed until November 2021. The main goal of COP26 is to reach a universal commitment towards “Net Zero” emissions by midcentury.
The way to Glasgow began early in January with an unprecedented leadership from the private sector, which advanced hurriedly towards decarbonization. The World Economic Forum ranked climate change and environmental risk at top of its tables, while BlackRock announced it will stop funding fossil fuel investments. In August, British Petroleum presented its carbon neutrality strategy and ExxonMobil was expelled from the Dow Jones due to its loss of value. City Group announced a $250 billion-dollar green fund and Morgan Stanley disclosed for the first time the carbon footprint of its products. By December, 1,500 companies, with a combined value of $11 trillion dollars, and 30% of the oil industry had committed to Net Zero targets.
Subnational governments and citizens also hasted the pace to join the way to Glasgow. In July, Tamaulipas became the first subnational government in Mexico to put a price on carbon as California committed to banning gasoline vehicles by 2035. In November, the citizens of the United States elected a president who has set the fight against climate change as national priority. By the end of the year, 950 cities and provinces around the world had committed to carbon neutrality, and 74 % of US voters perceived climate change as an important issue to determine their decisions.
National governments arrived late to this race, but they will very likely set the stage in 2021. In September, China surprised the world with its Net Zero target before 2060, followed by Japan and South Korea with similar targets by 2050. In December, the UK and France convened a summit to celebrate the 5th anniversary of the Paris Agreement. By then, 110 countries had announced their intentions to set Net Zero targets by 2050. The US, Mexico and Brazil were not allowed to talk at the summit due to lack of commitment. However, that same day, Joe Biden announced the US will rejoin the Paris Agreement the first day of his administration and he will host his own climate summit in the first 100 days.
With the upcoming commitment form the US, 65% of global emissions will be carbon neutral by midcentury. Russia, India, Indonesia, Brazil and other large emitters will have to be dealt with in order to reach the goal set for Glasgow. Their commitment will depend on convincing them that environmental degradation does not constitute a political agenda but a demonstrated fact with increasing human and physical impacts. In 2021, there will be more floods like the one in Tabasco and more wildfires like the ones in California, and another $ 1.5 billion dollars’ worth of climate related impacts worldwide pushing the risk further up in capital markets.
The good news is that these markets are already responding by punishing dirty investments. In 2021, for the first time in history, investments in clean energy will overtake these of fossil fuels and by 2024 there will be more renewable energy installed capacity. Post-COVID economic recovery provides us with the opportunity to build back better, meet the Paris Agreement targets, propel investment, and create millions of new jobs.
In 2021, the way to Glasgow will continue. Committed countries will increase the pressure on polluting countries through diplomacy and trade sanctions. Capital markets will further decarbonize their portfolios. Citizen will demand politicians to enhance their commitment and subnational governments will reinforce their leadership.
what will you do in the way to Glasgow?
Article originally published in Reforma news paper
Written by Enrique Lendo, Business Development Mexico Advisor.
While the results in Gorgia and Arizona secured Joe Biden´s Victory, Tabasco faces the worst flooding in its history and uncertainty regarding potential support to rebuild it´s towns and economy. What happened in the states of Tabasco, Chiapas and Veracruz in the past days is not the result of atypical rain but a direct consequence of Mexico´s vulnerability to climate change. It is ironic to confirm that being Mexico an oil country, climate change is now collecting the bill.
According to Mexico´s Natural Disasters Trust Fund (FONDEN), 91% of the monies spent in disaster relief between 1999 and 2017 went to climate related events. Climate vulnerability is based on geographic and physical factors, but lack of urban planning and a culture of prevention, as well as weak capacities to reduce and manage the crisis, exacerbates the impacts. The economic cost of hurricanes and heavy rain events between 2002 and 2015 amounted to 18 billion dollars; while the flooding from last week surpassed 200 thousand people affected and 50 thousand homes damaged.
Mexico contributes with less than 2% to greenhouse gases global emissions. However, given our condition of highly vulnerable country it is imperative to flag that we are being part of the solution. What happens in other countries, especially high emitters, is particularly important. Joe Biden´s victory is a cause for celebration because it confirms the strategy that will drive the world towards decarbonization through green economic growth.
Never on the history, a president elect had such a clear environmental mandate. According to one exit poll, 74% of Biden´s voters considered climate change as especially important for its choice. Other poll concluded that 67% of all voters, not just Biden supporters, are in favor of increasing public investment in clean and renewable energy.
It is in this context that Biden proposes a “Green Deal” that will take the US to reach carbon neutrality in 2050 and its electricity sector to become 100% clean by 2035. In order to reach such goal, they will invest $2 trillion dollars of public funds that will leverage $5 additional trillions from the private sector and subnational governments; and also create 10 million new jobs. They will rejoin the Paris Agreement and consider trade sanctions to polluting countries.
After the electoral results in the US, there is no doubt that the preferences of citizens, consumers and investors are leaning towards decarbonization and green growth. A few days before the elections, China, Japan and South Korea joined the European Union with net zero emission targets by midcentury. With a similar target about to be announced in the US, 60% of the global emissions will be neutral by 2050. In the private sector the story is not too different, the value of oil and gas companies within the S&P 500 has gone from 15 to less than 3% over the last decade, predicting its eminent extinction.
With the US as its main trading partner, opportunities to develop Mexico´s low carbon potential are greater than ever. From investing in clean energy production to supply national and binational electricity markets, to manufacturing of goods and technology to service the growing demand of renewable energy, to propelling carbon emission offsets in the forest and agricultural sectors, possibilities are unlimited. Mexico is on the verge of the conditions that will define its future.
Article originally published in Reforma news paper.
From ALLCOT we offer our clients a wide range of possibilities to strengthen their strategy and message on sustainability.
Written by Natalia Rodrigo Vega, Head Group Business Development ALLCOT.
Established in 2009, ALLCOT is a veteran project developer offering knowledge, expertise, and management to initiatives that reduce greenhouse gas (GHG) emissions to actively combat the climate crisis under Article 6 of the Paris Agreement is aligned with the 2030 Agenda and its 17 Sustainable Development Goals (SDGs).
ALLCOT develops emission reduction projects under various carbon quantification standards (CDM, VCS, GS) and for various sectors (forestry, waste, renewable energy) covering the entire carbon credit value chain its later management in the markets created under the Paris Agreement.
ALLCOT supports projects, companies and public bodies to improve their sustainability performance by offering consultancy services, including the development of strategies to calculate, reduce and offset GHG emissions, as well as the identification of best practices for reporting on Sustainable Development Goals (SDGs).
For ALLCOT, sustainability has always been a priority on our agenda and modus operandi, is part of the DNA of all of us who make up ALLCOT. At ALLCOT we are committed to sustainability towards our employees. Without a sustainable model for our TEAM, it is difficult to sell a sustainable business model to outside.
Therefore, from our organization we promote flexibility and teleworking before the pandemic. The fact that our staff are masters of their time, without leaving aside their work commitments, improves their self-esteem and efficiency in their jobs and, at the same time, allows them to reconcile with their personal life, hobbies and other
obligations. In fact, we have seen that there has been no decrease in the response capacity during the pandemic and we have all been working at maximum capacity all these months.
The COVID-19 pandemic is significant threat to the health and well-being of billions of people around the world. As the world begins to open up from the blockages and enters a state of unprecedented vulnerability, or what many have called “the new normal” it makes sense to reflect on what we have learned, review our fundamental assumptions, and begin to chart a course to continue working TOGETHER to build a sustainable world.
Without a doubt, the pandemic has had a significant impact on our work. On the one hand, in view of our projects being implemented, the pandemic has made field visits impossible and follow-up and socialization work has had to be done remotely. This has not paralyzed our work, but it has slowed it down and helped to generate more uncertainty in the study of primary and secondary sources.
For this reason, ALLCOT has invested all its strength in seeking alternatives to these new uncertainties generated in the project and to be able to successfully close all its phases.
On the other hand, in relation to the projects that we had pending to execute, we have to adapt and reinvent ourselves to this “new normality”. The coronavirus pandemic presents an excellent opportunity for us to act in solidarity so that we may be able to turn this crisis into an incentive to achieve the United Nations Sustainable Development Goals.
Initially, our objective was focused on supporting companies and institutions, both in thepublic and private sectors, focused on leisure activities, events, catering and tourism. As a result of the pandemic, these sectors are defined as the most affected, so their financial capacity is limited to being able to continue their business and it is very difficult for them to make extraordinary investments. For this reason, from ALLCOT we have strengthened our scope of prospecting and opening business towards the food, energy and transport sectors.
From the company we offer our clients a wide range of possibilities to strengthen their strategy and message in sustainability. Our work relates to non-financial reporting, sustainability reporting, environmental footprint reporting (emissions, plastic) and our flagship product: the mapping, identification, quantification and monitoring of SDG.
ALLCOT has merged its know-how in climate change project development, being our strengths the development of quantification and monitoring tools together with its experience in sustainability to develop a unique and innovative tool. This tool helps us to know at regional (country, nation) and sector level, the degree of commitment and alignment with SDG and Agenda 2030.
Article originally published in Corresponsables.
Extreme E, the revolutionary electric off-road racing series, has agreed a partnership with ALLCOT to offset the championship’s carbon footprint in support of its goal to have a net-zero carbon footprint by the end of its first season.
ALLCOT, a world-leader in carbon offsetting and sustainability initiatives, develops innovative impact projects which enable businesses to support local communities to protect the environment by reducing their carbon emissions. These initiatives directly support the United Nations’ Sustainable Development Goals, which call on governments, businesses and communities to put an end to poverty and protect the planet
Alejandro Agag, Founder and CEO at Extreme E commented: “Our sustainability strategy is a crucial aspect of Extreme E so we’re delighted to be working with ALLCOT, a world-leader in climate change and sustainable solutions, to develop this strategy and enable us to support some truly transformational projects.
“Extreme E’s goal is to have a zero-net carbon footprint by the end of its first season, which means removing as many emissions as we produce. We plan to achieve this by following the United Nation’s framework which recommends reducing, measuring, and offsetting carbon emissions. The projects we will support will empower local communities to reduce emissions to help protect the planet, not just now but for the long-term.”
ALLCOT global community projects include the Brazilian Rosewood Protected Forest Project that safeguards 177,899 hectares of high conservation value rainforest, and a project in Mozambique that will replace 10,000 traditional cookstoves with new energy-efficient versions, reducing charcoal consumption by 50 per cent and in turn reducing gas emissions and usage of fossil fuels.
Alexis L. Leroy, Founder and CEO of ALLCOT, commented: “We are very excited to partner with Extreme E not simply with offset but with vanguard vision in term of sustainable strategy solutions, shifting from GHG compensations to Global Impacts, which is at the core of Extreme E’s values. Beyond, we see great potential in synergy with Extreme E and its technology partners to bring sustainable innovative solutions to remote communities.”
Extreme E is consulting with carbon measurement experts Quantis to calculate its corporate footprint and will continue to track and update this figure as its season unfolds.
As well as offsetting, Extreme E focuses on reduction of its footprint through a series of efforts which include;
- Using 100% electric vehicles.
- Zero emission vehicle charging using Hydrogen Fuel Cells generated by water and solar.
- The series centrepiece, the RMS St. Helena ship, which has undergone extensive refurbishment to lower its emissions in order to transport the championship’s freight and logistics around the world. This is estimated to reduce carbon by two thirds in comparison with air freight.
- Not having spectators at events. (Depending on the type and location of events, fans can represent 20 to 50% of the total footprint of an event once you consider their transport, food and beverage and merchandising).
- Capping the number of members each team has on-site to just seven each – two drivers, one engineer and four mechanics.
- Remote broadcast operations which involves using satellites to enable live editing and overlays to take place in a London studio.
- The use of alternative fuel HVO (hydrogenated vegetable oil) generators instead of diesel counterparts for all on-site power needs.
- Virtual, at-home hospitality experiences.
In addition to reducing, measuring and offsetting its carbon footprint, Extreme E has appointed an independent Scientific Committee, consisting of leading academics from The University of Oxford and The University of Cambridge, tasked with driving the series’ climate education and practice.
Extreme E will go racing in early 2021, visiting five environments around the world, including Arctic, desert, ocean, glacier and Amazon locations, which have already been damaged or affected by climate and environmental issues.
Inspiring its global audience to take action now, and leaving a lasting positive impact is a key element of the series, and working with organisations like ALLCOT ensures Extreme E is supporting and investing in the right projects with the biggest impact on the environment and its local communities.
Extreme E will use the mass appeal and following of sport to highlight the effects of climate change around the world, which include deforestation, melting icecaps, desertification, rising sea levels, plastic pollution and more, and will educate its fans with important messages around the reduction of our own carbon impact, including the promotion of electric vehicles and other clean energy mobility solutions for a lower carbon future.
To learn more about Extreme E, visit – www.Extreme-E.com
NOTES TO EDITORS
ALLCOT is a veteran project developer offering knowledge, expertise, and management to initiatives that reduce greenhouse gas (GHG) emissions to actively combat the climate crisis under Article 6 of the Paris Agreement is aligned with the 2030 Agenda and its 17 Sustainable Development Goals (SDGs).
ALLCOT is a leading actor in the climate and sustainability impact markets and is recognized as one of the established companies in the sector that has been building a strong reputation in environmental project development and the development of corporate sustainability services in their home and emerging markets. Developing their own emission reduction projects, ALLCOT supports companies and public bodies to improve their sustainability performance by offering consulting services under various carbon quantification standards (CDM, VCS, GS) and for various sectors (forestry, waste, renewable energy, transport, sports) covering the entire carbon credit value chain for its later management in the markets created under the Paris Agreement.
About Extreme E:
Extreme E is a radical new racing series, which will see electric SUVs competing in extreme environments around the world which have already been damaged or affected by climate and environmental issues. The five-race global voyage highlights the impact of climate change and human interference in some of the world’s most remote locations and promotes the adoption of electric vehicles to help preserve the environment and protect the planet.
Another unique feature of Extreme E is its floating garage, the RMS St. Helena. The former Royal Mail cargo-passenger vessel is undergoing a modernisation and refit in order to lower its emissions. It will be used to transport the championship’s freight and infrastructure, including vehicles, to the nearest port, minimising Extreme E’s footprint as well as being used to facilitate scientific research through an on-board laboratory.
Extreme E is operated in association with Formula E – the organiser of the ABB FIA Formula E Championship. Extreme E is committed to sustainability and minimising environmental impact – as well as playing its part in re-building and restoring areas already impacted by climate change.
Written by Enrique Lendo, Business Development Mexico Advisor.
Large oil and gas companies have been consolidating their positions in global markets with products that meet the needs of industrial production, mobility, electricity generation and other industries of modern economies. Without question, they are a strategic industry rarely challenged and even underregulated by governments. It has also been rewarded by capital markets with high rates of return and moderated risk factors despite their externalities. In 2020, five oil and gas companies toped the “Fortune 500” ranking. However, recent socio-economic trends will compel this industry to “adapt or perish”.
Firstly, innovation and technological development have boosted access to oil and gas substitutes along value chains in global and domestic markets. Renewable energy is gaining momentum due to reductions in the cost of production, increase of storage capacity and more reliable distribution technology. In 2020, 29% of electricity produced globally will come from renewable sources.
Secondly, oil and gas prices are extremely sensitive to fluctuations in international markets. Decreasing trends in oil demand for the past few years were exacerbated by mobility and other restrictions imposed to address the Covid-19 pandemic. In the first semester of 2020, oil demand faced a 20% contraction and prices went down to levels not seen for decades.
Thirdly, climate change impacts have made evident the urgency to transit towards a low carbon development model. In 2015, over 190 countries subscribed the Paris Agreement with the objective to stabilize the increase in global temperature at 1.5 °C by the end of the century. The energy sector contributes with over 70% of global greenhouse gas emissions and, according to the Intergovernmental Panel on Climate Change (IPCC), oil and gas production will have to decrease 55% by 2050 to meet the Paris Agreement goals.
Provably, the decisive factor to drive the transformation of the oil and gas industry will be the emerging perception of climate risk in capital markets. Last month BlackRock, the largest asset holder in the world, punished 53 companies due to its weak performance on climate action, including some of the largest oil and gas companies. In the same line, international financial groups are introducing specialized climate solution tools. City Group recently set a $250 billion dollar climate financing target by 2025 and Morgan Stanley will become the first large American bank to publicly disclose the climate change impact of its products.
It is in this context that oil and gas companies with long term vision have begun adapting to the changing environment. This past June, the Oil and Gas Climate Initiative, which gathers a group of companies with a 30% of the production share in the industry, subscribed a carbon intensity reduction target consistent with the Paris Agreement. And last week, British Petroleum (BP), the fourth largest oil company in the world, released its strategy to reach carbon neutrality by 2050, which will very likely set a new benchmark in the industry. BP will go from an oil company to an energy solutions corporation charged with renewable and low carbon products in its portfolio.
In the framework of the Covid-19 economic crisis, even the most polluting companies and industries are presented with the opportunity to reinvent themselves to survive in the long term. What path will Pemex and Mexican energy companies chose?
Article originally published in Mexico´s newspaper Reforma.</span
Written by Alexis Leroy, CEO ALLCOT
The coronavirus pandemic has been a huge wake-up call for the world. In one short month, large swathes of the economy have either closed or been forced to scale back significantly. Air travel is virtually non-existent, private transport has shrunk to a shadow of its former self, and retail has almost entirely closed its doors.
And while we have been self-isolating at home, it’s given us all a chance to consider what we’re giving up, what choices we can’t make, and even whether we’d choose the same things again whenever restrictions are lifted. The lockdown has also turned into a fountain of ideas; ideas on how we can take this opportunity to rebuild our economies in a more sustainable way.
To be fair, some blueprints for a sustainable future are already on the table. In the US, the Green New Deal harkened back to President Roosevelt’s plan to bring the country back from the Great Depression of the 1920s. The 21st century version focused on climate change, the biggest challenge of our times, as well as social and economic inequality.
In Europe, the newly-elected Commission brought forward its own Green Deal last year, which is even more ambitious than its US counterpart. The EU plan seeks to turn the bloc’s entire economy upside down, refocusing on sustainability, climate, transitional measures to diversify and modernize the economy and offer opportunities for all. The proposals on both sides of the Atlantic are fortunate in their timing, as we grapple with “the fastest, deepest economic shock in history”. A lot of thinking has already been done.
For Asia, too, the pandemic represents an opportunity to embark upon the same shift, away from mimicking the West and towards a more sustainable, self-reliant economic model. Indeed, it may be the east’s only hope, if the kind of proposals that we read today are put into action elsewhere.
The liberal market-based economic model has been around for around 300 years. Globalization was the last great leap forward for the neoliberal interpretation, and coronavirus’ rapid expansion around the world is the warning that we cannot continue as we have done. The economy that evolved in the 18th century took the world as it saw it. It did not experience, as we do today, the immense impact of industry and business on our earth and our climate.
Pollution and resource scarcity were not considered problems 300 years ago, and all our efforts since then have been too modest, too piecemeal, and have been largely shrugged aside by the interests of old-world business models.
Yet today, we understand how our economic model impacts our health, our well-being. We can quantify the harmful effects of air pollution, just as we can quantify the cost of natural disasters.
With all this knowledge and understanding, gained through the immense technological advances of just the last 50 years, we have an opportunity to set a new course for the coming decades.
What must be done?
At a macroeconomic level, the world needs to commit, again and with greater force, to the purpose of the Paris Agreement and the Sustainable Development Goals. We need governments to line up behind these aims, to make pledges that are ambitious, believable and achievable, and develop the pathway towards achieving the ultimate prize.
The Sustainable Development Goals (SDGs) have a simple target: “a shared blueprint for peace and prosperity for people and the planet, now and into the future. They consist of 17 ambitions including reducing inequality, clean water and sanitation, climate action, responsible consumption and production, and zero hunger. All of these goals can be achieved with a thoughtful approach to re-building our shared economy.
And thanks to technology and understanding, progress towards the SDGs can now be quantified. Health, education, economic opportunity, stable societies, and even gender equality can be measured and assessed. And this quantification of achievement can now be rewarded. For the first time in our economic history, intangible impacts are now becoming tangible items on balance sheets. Efforts such as the Task Force on Climate-Related Financial Disclosure are slowly moving the needle on bringing externalities like greenhouse gases into the realm of real costs. And in the same way, improving our collective health, safety and prosperity can also be rewarded, in lower external costs (like carbon emissions and businesses losses) as well as in lower human costs.
The Paris Agreement has one, just one, simple goal: to ensure that by the middle of the century all our emissions of greenhouse gases are balanced by sinks that absorb those same gases. Again, this is a target that we can achieve if we plan carefully and put in the work, the investment, and the research to make it happen.
What will we gain? We will begin to return our climate to a state where catastrophic weather events are not “normal”, where deforestation does not rob peoples and species of their home, where water stress does not force mass migrations.
At a national or even multinational level, how can we make the changes that the future requires of us?
A Green Rebuilding
As we eventually emerge from the shadow of Covid-19, economies will need government help to re-start. Already we have seen billions of dollars, or euros, of pounds, spent to assist businesses and people to get through the lockdown. And we will see billions more spent to assist businesses to rebuild and restart their operations. We should make sure that we do not focus on short-term survival but on long term sustainability.
While we defend the independence of the private sector, when it comes to receiving publicly-financed assistance, the private sector should be required to follow public policy. Instead of spending 90% of the assistance on propping up existing business models, shouldn’t our leaders be looking at making our economy more resilient?
Financial assistance should come with conditions. Industrial companies should be required to make improvements and changes to their processes that match the SDGs. Where a factory now buys power from a gas-fired plant, any government assistance should require that it buys renewable power – a simple and achievable solution that comes at no additional cost.
Manufacturers should be required to use recyclable packaging, ensure the products are recyclable or reusable, and that their processes are as clean as possible. Regulations could be stiffened to require those producers to take legal responsibility for all lifetime waste associated with their products.
Commercial businesses should re-examine their practices and see what flexibility they can build into their operations. During the pandemic, we have seen an explosion in the use of video conferencing to maintain social links. Millions of people have been working effectively from home, rather than commuting to offices. Do we all, as employers *and* employees, need to commute to offices that use even more resources?
Instead of global supply chains, the business should be encouraged to look locally for materials and supplies, thereby reducing transportation emissions and pollution, and supporting the local community and its economy. And do we need to travel quite so much for business or for pleasure? There already is a growing awareness of the impact our travel habits have on the environment and climate, but the recovery from this global shutdown offers a real opportunity to wean ourselves off needless travel.
Lastly, how can you and I as individuals translate these goals into action on the ground?
As consumers, we can make more responsible choices and look after our outputs. When we buy, we should buy responsibly: are products reusable, recyclable and re-purposeable? Do our products even need packaging?
When we do consume, are we consuming more than we need? Are the electricity, gas, and resources that we use going from renewable sources or are we drawing on finite resources like oil or coal? Do we need to drive all the kilometers that we do? Is our flight necessary? Are we lighting and heating our houses responsibly?
Alternative products already exist for many of us, as we all know. But, critically, alternative choices exist too. It’s time we began to exercise more robustly our power of choice and, as individuals and consumers, ramp up pressure on business, on policy-makers, and on each other to think about the impact we have on our home.
The free-market economic model that was born in the heart of the Industrial Revolution, and which has lasted 300 years, is not fit for the 21st Century and the challenges it presents. We must not insist on a return to business-as-usual.
We, therefore, call on business around the world to acknowledge that the rebuilding of our economies in the wake of this pandemic cannot merely return us to the way things were before. The private sector must accept its historic role in bringing us to this point, and take on both the responsibility as well as the opportunity to fix our problems, even where the government is slow to act.
By Asier Aramburu Santa Cruz, Climate Change RENEN Manager
Thanks to the project for the capture of methane, the displacement of fossil fuels and the cogeneration of renewable energy that ALLCOT is currently developing in Colombia, the palm industry can be a great ally in reducing greenhouse gas emissions. The good management of its plantations and the avoidance of deforestation is not the only action that this industry can take, some changes in the processing of the fruit itself to obtain the oil can be also implemented to ensure a more sustainable product. Thus, Colombia has managed to turn a problem, waste management, into an opportunity. Industrial wastewater from the production process has a high organic load and requires a previous treatment to be discharged into an aquatic environment. In Colombia, this treatment was carried out using anaerobic lagoons, which emitted large amounts of methane into the atmosphere, a gas with a global warming potential 25 times greater than carbon dioxide (CO2).
However, a solution was found: the use of biodigesters. Thanks to these facilities, methane emissions are being reduced by capturing biogas, the methane-rich gaseous mixture produced in the wastewater treatment process.
Although few plants are using this biogas to generate energy, the second phase of the project contemplates the adoption of this form of electric power generation. Thus, instead of burning in a flare, the current destination of most of the biogas, the companies will be able to adopt the technology that allows them to use that methane as an energy source. That is how they can become self-sufficient and deliver their surplus energy to the electricity grid, increasing the project’s climate change mitigation potential.
ALLCOT faces now a critical moment, as there is a need to update the Project Design Document (PDD) initially delivered to the United Nations Framework Convention on Climate Change (UNFCCC). But the biggest challenge comes with the first verification of the emission reductions to obtain the carbon credits, which will certify for the first time the reductions that have already been carried out. ALLCOT is also challenged to demonstrate the potential and benefits of the project, so that the rest of the companies take part in the project and this industry is transformed. Furthermore, the success of this project comes with the development of other initiatives within the production process, such as composting the sludge and waste from the production process, which also emits large amounts of greenhouse gases in their decomposition process.
ALLCOT commitment goes not only by doing the calculations of the reductions and the preparation of the documentation to get the carbon credits. ALLCOT is involving and motivating the companies visiting their production facilities.
The palm oil industry is currently the world leader in the supply of oils and fats. At the top the Asian countries play the main role, led by Indonesia and Malaysia, which have achieved fast growth in recent decades, reaching a combined production of 59,000,000 tons (82.5% of the total). However, this growth has received multiple criticisms, since it has led to the destruction of natural forests.
In the case of Colombia, in a field dominated by Asian producers, it has managed to position itself as the first palm oil producer in America and the fourth in the world (1,600,000 tons).
Therefore, following this project, the Colombian palm industry could show its commitment to sustainable development, take distance from other producers and align with the objectives set forth in the Paris Agreement.