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Sharon Kimathi Energy and ESG Editor, Reuters Digital Hello!
Governments around the world ramped up their renewable energy targets and investment this week. The European Union reached a provisional deal on higher renewable energy targets, while Britain and Australia announced plans to tackle emissions and Canada unveiled a series of green investment tax incentives. And check out today’s ESG Spotlight for an Egyptian school’s innovative way of dealing with garbage and recycling.
Negotiators of the European Parliament and the Council, representing EU members, agreed that by 2030, the 27-country bloc would commit to sourcing 42.5% of its energy from renewable sources like wind and solar, with a potential top-up to 45%. The EU's current 2030 target is for a 32% renewable energy share. A rapid shift to renewable energy is crucial if the EU is to meet its climate change goals, including a legally binding aim to cut net greenhouse gas emissions by 55% by 2030, from 1990 levels.
Elsewhere in Europe, Britain set out plans to boost energy security and tackle emissions, but critics said a lack of new investment and incentives meant it failed to provide any new boost for the country's green energy sector. Britain's net zero start-ups and renewable energy producers are waiting for the country to respond to the green subsidies offered by the United States’ $369 billion Inflation Reduction Act (IRA), but the government has said that will not come until the autumn.
The UK's finance minister, Jeremy Hunt, said Britain would not go “toe-to-toe” with the United States and the EU by offering billions in green subsidies and tax breaks but would look at incentivising private investment. Britain is not the only country facing pressure to compete with America’s green subsidies. Canada’s Prime Minister Justin Trudeau has been under pressure to level the playing field with its largest trading partner since Washington passed massive uncapped incentives for clean energy investments in the IRA.
The country took a big step toward luring more investment in clean technology this week, as it aims to build a low-carbon economy, analysts said. Trudeau’s government unveiled a series of new green investment tax credits worth about C$35 billion ($26 billion), including almost C$26 billion for producing and transmitting electricity.
While the budget makes headway on the green transition, it does not put the kind of money on the table the United States has, said Michael Bernstein, executive director of climate think-tank Clean Prosperity.
Over in Australia, the Labor government inked a deal with the Greens Party on a new emissions reduction plan. The new rules will cap total greenhouse gas emissions and curb some new gas and coal investments in the country, which will come into effect on July 1.
The "Safeguard Mechanism" reform legislation is key to the Labor government's pledge to cut emissions by 43% by 2030 in a country that ranks as one of the world's biggest carbon emitters per capita.
Negotiations with the Greens, who wanted a ban on all new fossil fuel investments, resulted in a law including a hard total emissions cap, ministerial review for projects that raise total emissions and compulsory disclosures for polluters that rely heavily on carbon offsets to meet their targets.
* Talking Points
Cara Jenkinson, cities manager at climate solutions charity Ashden, responds to Britain’s energy security announcements:
“Unfortunately, the government’s so-called ‘Energy Security Day’ proposed measures do little to increase our energy security. It’s ironic that these announcements – tellingly rebranded from their original title of ‘Green Day’ – further jeopardize chances of the UK meeting our 1.5 degrees climate commitment. “The UK is particularly exposed to high energy prices because of our housing stock which literally leaks expensive fossil fuel energy out of walls, roofs and windows, and the piecemeal measures announced today fail to fix this. “This was a chance to reset policy on energy efficiency but instead the government is supporting further oil and gas exploration and committing £20 billion to technologies such as carbon capture and storage which are unproven at scale. “£20bn could retrofit millions of homes and provide the government and society with huge quick wins – tackling the energy, climate and cost of living crises at the same time. “The expected £1bn for the ECO+ scheme – unconvincingly branded the Great British Insulation scheme and already announced in November is all padding and no substance. The government has also missed a big economic opportunity – to create 200,000 new jobs to make our homes more energy efficient. “We welcome the proposed measures to boost the rollout of heat pumps, but unless we insulate first, many people will be left with high energy bills – a crucial detail that has been ignored by the government.”
* ESG Lens
China's plans for around 100 new coal-fired power plants to back up wind and solar capacity have sparked warnings that the world's second-biggest economy is likely to end up lumbered with even more loss-making power assets. Analysts question the logic of policies that intend to reduce the role of the dirtiest fossil fuel but at the same time require more coal-fired power plants to be built - especially given that only a small number of older plants are typically retired each year.
* ESG Spotlight Today’s ESG Spotlight highlights an Egyptian teacher’s efforts to show children the benefits of recycling. Elsewhere, a Vietnamese artist showcases the sacrifices of women during the war against the government of the then South Vietnam and its main ally, the United States.
As a child growing up in
Cairo's Manshiyat Nasser, a shanty town also known as "Garbage City," Teresa Saeed spent her free time rummaging through the piles of rubbish strewn everywhere to find paper and materials to indulge her love of drawing and painting.
Now 34, she runs a charity that encourages children in the area to make creative and positive use of their environment by exploring the space and recycling. "The whole idea is that these children are constantly surrounded with recycling. Why not teach them how to recycle in a way that reduces our consumption and benefits society?" she said.
In two-day workshops, the children gather plastic bottles, sticks, cardboard, paper and cans, and transform them into piggy banks, musical instruments, puzzles, or paintings.
On her trusty motorcycle,
Vietnamese artist Dang Ai Viet travels around the Southeast Asian country in a quest to ensure that the thousands of women who suffered the loss of two or more loved ones during the Vietnam War are not forgotten.
The 75-year-old has painted the portraits of 2,765 of the women, who are part of a group known in Vietnam as "heroic mothers", in recognition of their sacrifice during the war that ended in 1975. "I paint so that the current generation and the ones after will have a chance to see the look in the eyes of a mother who lost more than one of her sons," Viet told Reuters.
Some researchers have estimated about 3.8 million people were killed during the war, though estimates of the toll vary.
* Quote of the Day
“Investment decisions are being made now and the UK will lose out if we fail to set out clear and bold plans to attract green investment. The big test remains: will these be enough to persuade those businesses, who are now weighing up options in the U.S. and the EU, to continue investing in the UK? Only time will tell.”
Simon Virley CB, vice chair and head of energy and natural resources at KPMG in the United Kingdom
* Looking Ahead
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