Empresa Innovadora en el Sector del Medio Ambiente. El Caso de JACASPE.

¿Qué es JACASPE?

JACASPE es una empresa franco-española online dedicada al comercio de productos gourmet de la región de los Pirineos tanto francés como español. Los productos ofrecidos son artesanales, naturales y ecológicos y son comercializados en Francia y España. Uno de los objetivos de la empresa es dinamizar el comercio de productos tradicionales y ecológicos de pequeños productores

 

jacaspe
Logo JACASPE. Fuente: JACASPE

¿Por qué es JACASPE una empresa innovadora?

La principal innovación de JACASPE es su trabajo a nivel regional, que en su caso es además transfronterizo. Esto es una novedad en empresas del sector del desarrollo rural donde las fronteras administrativas suponen una barrera por temas burocráticos y de subvenciones principalmente. Trabajar a nivel regional no solos les ha permitido abrir su mercado a dos países sino, a nivel social, el desarrollo de la región de los Pirineos como una unidad y no como parte de dos países.

Por otro lado, al trabajar directamente con granjas y productores han eliminado los intermediarios entre el productor y el comercio. Esto supone una innovación para los pequeños productores que no pueden distribuir directamente pudiendo expandir su mercado sin aumentar costes.

JACASPE se constituye de este modo como una empresa innovadora en el sector del desarrollo rural y medio ambiente. Su modelo de comercio a nivel de región podría ser importado a otras empresas, no solo de comercio de productos agrícolas ecológicos sino a todos tipos de empresas, ayudando de este modo un desarrollo en el medio rural de forma integrada. Esto supondría un gran avance a nivel regional y un acercamiento al modelo de desarrollo que la Unión Europea propone en sus programas.

Para conocer más sobre JACASPE y los productos que comercializa visita su página web: http://www.jacaspeproductosregionales.es/


Juan Carlos Gómez Martín >>

Montes de Socios: social entrepreneurship for rural development

Montes de Socios

Many lands in Spain, especially forests, are not property of one person but rather of a group of people. This type of joint ownership has different names depending of the region but almost all of them share the same characteristic, the woodland is pro indiviso, which means that the property is not divided between its owners.  They can have different shares of the land property but there are no demarcations dividing what belongs to each member.

The property passes from fathers to sons, multiplying the number of owners with each generation and, in most of the cases, these transfers are not documented, being the title holders people dead 100 years ago. Hence, the cadastre shows that the land belongs to nonexistent companies, deceased owners or entities that do not accurately represent the legitimate owners.

This complex property regime extremely complicates the management of the forests, having to face a lot of administrative obstacles in order to complete any kind of procedure. The result is woodlands managed and exploited in a way far from ideal or completely abandoned in many cases.

Montes de SociosPedro Medrano, as part of the Sorian Forest Association (Asociación Forestal de Soria) has being working to solve this issue. He launched, through the initiative Partners’ Woodlands (Montes de Socios), a management model based on traditional mechanism that establishes clear partnered ownership and management of the forest.

These model, the Management Boards (Juntas Gestoras), were integrated in the Spanish legislation trough the 2003 Forestry Act (Ley de Montes). These Boards allow the co-owners of woodlands to act as a single legal entity, making possible their management and conservation, adding value to otherwise abandoned land. But also become a liaison between city and countryside people that have inherited the ownership from ancestors which were fellow countrymen, creating a renewed interest and a sense of connection to the countryside.

Partners’ Woodlands also works on the recuperation of the documental base of the forest confiscation; offers guidance for forest management and conservation and promotes the creation of legal frameworks for co-owned woodlands.

At present day, many Management Boards have been constituted through Partners’ Woodlands: 34 in Soria, 9 in Asturias, 2 in Guadalajara and 1 in León.

A two page article (present in front cover) was dedicated to the initiative in the newspaper EL País the 28th November 2011. The initiative has been also awarded with the Dubai International Award for Best Practices 2012. In addition Pedro Medrano has become, in February of this year, fellow changemaker of Ashoka.

 

Pedro Medrano & Cándido Moreno

Pedro Medrano and Cándido Moreno show a record of a co-owned woodland's owners. Source: El País Photo: Carlos Rosillo


Related Websites

    Montes de Socios 

    Asociación Forestal de Soria

    Pedro Medrano’s profile in Ashoka’s webpage

     


Jacob Jon Pallone >>

European Commission 2030 Proposal – Target Stringency for EU ETS and ESD

On 22 January 2014 the European Commission proposed a new binding reduction target for greenhouse gas (GHG) emissions, calling for a 40% reduction from 1990 levels to be met through domestic measures alone.[i] The annual reduction in the cap would be increased from 1.74% now to 2.2% after 2020, and there is also a call for emissions outside of the EU Emissions Trading Scheme (ETS) to be cut by 30% below the 2005 level, which is to be shared across the Member States.[ii]

There are some critics to the European Commission’s proposals, though many do want to implement some of the proposals and believe that they are a step in the right direction in order to achieve long-term emissions reductions. Specifically, Carbon Market Watch claims that the 40% target proposed is not ambitious enough in order to meet targets of 80-95% reductions by 2050.[iii] They also point out that the use of international offsets needs to be reevaluated and EU-wide quality restrictions must be applied in order to protect European competitiveness.[iv] In their report they explain, “Despite the domestic nature of the EU’s 2030 GHG target, international offsets may be used by Member States that want to increase their own GHG targets beyond the EU-wide GHG targets. Between 2013 and 2020 more than two thirds of all issued offsets will come from large-scale business- as-usual energy projects that do not represent real emissions reductions because the projects would have gone ahead anyway. Instead of investing in clean energy projects in Europe, businesses are spending money on purchasing offsets from projects in developing countries that would have been built anyway. This is hardly a way to protect European competitiveness.”[v]

On 21 March 2014, the European Council convened for their Spring Meeting and reviewed the Commission’s proposal to conclude that the new framework should be based on the following principles[vi]:

As can be seen from the proposal in January, 20% reduction targets in 2020 would increase to 40% by 2030, and this is supposed to place the EU on track to meet the 80% reduction by 2050

The Council doesn’t specifically mention anything in regard to applying stringent targets for the EU ETS and ESD, but they do seem to comply with the ideas and proposals set forward by the Commission in stating that there should be further coherence between targets and ETS reform should play a central role in achieving their objectives. An agreement was made to make a final decision regarding the framework by October 2014 at the latest.[vii]

One of the major concerns for many is the ineffectiveness of carbon markets and the EU ETS due to the extreme surplus of emission allowances and international credits that has grown since 2009. At the start of Phase III of the EU ETS in 2013, the surplus stood at almost two billion allowances, and the European Commission’s anticipation is that although the surplus will discontinue to grow, there will not be much of a decline in allowances.[viii] Having so many allowances in the market risks damaging the orderly function of the carbon market, and furthermore presents ample risks for the ETS in it’s capability to meet demanding emission reduction targets in future phases..

Because of the over supply, current carbon prices are far from the prices ETS projections are based on. Therefore, the situation might be a call to transition focus on the Effort Sharing Decision (EDS) as well as the ETS. In the Energy Roadmap 2050 that was composed in 2011, it can be seen that they project the “contribution to the emission reductions [to be] driven by the ETS sectors which decrease emissions by 48% between 2005 and 2050; on the contrary the non-ETS sectors reduce by 21% compared to 2005.”[ix] Today we can see that the non-ETS sector target has been adjusted in January’s proposal, but clearly prevailing policy is not adequate and the proposals of late have been a testament to that.

Making a new legally binding reduction target that is to be met through solely domestic measures is telling, because there’s potential that the European Commission has learned from the past and understands the importance of making a compulsory, more aspiring objective outside of the ETS in order to hedge risk of it’s failure. [P1]


[i] European Commission. 2014. 2030 climate and energy goals for a competitive, secure and low-carbon EU economy. [press release] 22 January 2014

[ii] European Commission. 2014

[iii] Carbon Market Watch. 2014. European Council must close loopholes in the 2030 climate & energy framework. [press release] 7 March 2014.

[iv] Carbon Market Watch. 2014

[v] Carbon Market Watch. 2014

[vi] European Council. 2014. Conclusions – 20/21 March 2014. [press release] 21 March 2014.

[vii] European Council. 2014

[viii] Ec.europa.eu. 2014. Structural reform of the European carbon market – European Commission. [online] Available at: http://ec.europa.eu/clima/policies/ets/reform/index_en.htm [Accessed: 2 Apr 2014].

[ix] European Commission. 2011. Energy Roadmap 2050 – Impact Assessment and Scenario Analysis. [report] Brussels.


[P1]The door is still open for international credits but subject to an international agreement and further tightening the caps.

 


David Thorpe >>

The Energy Efficiency Directive and Possible Implications on the EU ETS

At present, energy efficiency is considered one of the most crucial pillars to EU policy.  The more efficiently energy is consumed and produced, the higher the possibilities for cost reductions at consumer as well as at industry level.  Furthermore, savings can then lead to increased competitiveness of industry and the EU economy as a whole.  By 2008, the EU recognised that the 20-20-20 target of a 20% reduction in energy consumption would not be met.  Previously, energy efficiency targets were not transferred into binding legislation – this resulted in slippage and underperformance. In order to tackle this problem with a more fundamental approach, the EU agreed to put together an ambitious plan to meet this goal.   The result was the Energy Efficiency Directive (EED) of 2012.

The EED came into effect in December 2013 with all member states expected to enforce the required measures by the summer of 2014.  It aims to fill the gap between existing framework directives and national policies on energy efficiency.  The main objective of the directive is to ensure the implementation of additional measures that will enable the 2020 goal to be achieved. Measures, which focus on utilities and building, that are key to the EED include:

As with the introduction of any new policy, there has been discussion of how the EED will affect existing directives aimed at reducing emissions levels within the EU.  The impact of the EED on the EU ÊTS – the World’s leading emissions trading scheme – has been highlighted as a cause for concern.

As implementation of the EED is predicted to lead to overall reduced energy consumption, this will in turn cause a reduction in carbon emission levels (a similar scenario has already been experienced during recent economic downturn when overall output declined).  A reduction in emissions levels and demand in the market would have knock-on effect of reducing the scarcity and the price of allowances on the carbon market.  Model scenarios commissioned by the EC, have shown that in some cases carbon prices could drop to zero – causing the market to collapse and the savings made by the EED to be reversed.  This has led to calls for the EUs “business-as-usual” strategy to be examined more closely.

The EU has recognised the challenges that this poses and state that it is committed to monitor the situation carefully.  The EC has suggested lowering the cap at a higher rate (2.2%) from 2021 on a yearly basis as part of their 2030 targets, however this has been criticized for the time it would take to reduce the surplus. There have however been increasing calls for direct action and for adjustments to be made to the ETS in order to allow it to adequately accommodate the EED in both the medium and long term.  Many have called for the strengthening of the ETS cap to counterbalance the effect of increased allowances being issued through EED based initiatives. Others have called for permits to be withheld from the next ETS phase.  The UK based carbon think-tank “Sandbag” has recommended that the ETS set aside 1.4 billion tonnes of permits rather than “backload” from phase three to increase competitiveness within the market.  To date, the EU has

In order to accelerate the EUs energy efficiency drive, the EED would appear to be an appropriate device – energy efficiency measures can be made relatively inexpensively and have a positive economic impact. As the supply of allowances is fixed years in advance, it is difficult to calculate the exact impact and prepare for unknown variables such as EED on the ETS.  However, evidence suggests that that the ETS will need to adapt in order to maintain a buoyant market.


[1] Article 5, Understanding the energy efficiency directive http://www.eceee.org/policy-areas/EE-directive

[2] Article 7, Understanding the energy efficiency directive http://www.eceee.org/policy-areas/EE-directive

 



Asya Marhubi >>

CERs and the European Emissions Trading Scheme (EU ETS)

The EU ETS was devised as one of several strategies to meet the European Kyoto Protocol target of an 8% reduction for the period 2008 – 2012, and now for the more ambitious EU target of 20% by 2020. Policies regarding renewable energies and energy efficiency, agriculture, and transportation, (to name a few), also contribute to European emissions reductions goals.

The EU ETS covers approximately 45% of total European Emissions (EC, 2013), including emissions from the power sector, aviation (for flights within Europe, though the original proposal covered international flights as well), and has successfully managed to integrate environmental costs into financial cost structures, thus ensuring that emissions are allocated a cost which will be taken into consideration during planning. This puts a monetary value on emissions, and incentivises reductions, and investment into R&D of more efficient, and less pollutant technologies.

In order to provide some flexibility, the Linking Directive (2004) was brought into effect, which allows for the use of Kyoto Protocol flexibility mechanisms, and serves to connect the EU ETS with the international carbon market, and increases international cooperation. The incorporation of these mechanisms allows countries to meet some of their reductions commitments through obtaining Certified Emissions Reductions (CERs) – to focus of the post – and Emissions Reductions Units (ERUs) through the Clean Development Mechanism (CDM) and Joint Implementation (JI), respectively.  Both mechanisms involve the emissions reductions projects, the former in non-annex I countries (developing countries and LDCs), and the latter in annex I countries (i.e. those countries with binding KP targets) (UNFCCC, 2014).

Unfortunately, these mechanisms, which were designed to complement domestic reductions options, increase cost efficiency, and promote international efforts to reduce, have had unexpected results on the effectiveness of EU ETS.

Firstly, instead of supporting domestic reductions strategies CERs came to substitute for domestic action to meet international requirements. In terms of global emissions targets, provided the projects meet standards for environmental integrity, global targets will be met. However, an excessive use of CERs by EU countries for projects in non-EU countries undermines the EU reductions goals. In order to stay on track with for these goals, a limit on the use of CERs was put in place, forcing countries in the EU to consider domestic reductions. Unfortunately, difficulty in determining an adequate limit has made it so loose, that it creates little incentive for domestic action.

Secondly, CDM, in combination with over-allocation, has undermined the overall capacity of the mechanisms to create real reductions. Between the surplus of EUAs, and the availability of cheap CERs, industries under the EU ETS had to make very little domestic changes to meet targets. And if we consider cases like the HFC CER ‘fraud’, where Chinese and Indian companies were producing more HCFC-22 to take advantage of CER revenues for the subsequent destruction of HCFC-23 byproduct (EIA, 2011). Moving forward will require higher standards regarding the environmental integrity of CDM projects, in order to guarantee the effectiveness of our strategies to stabilize CO2 concentrations.

Regardless of potential and actual problems associated with CERs in the EU ETS, the most cost effective path to low carbon intensive economies requires that ‘where-flexibility’ mechanisms like CDM. Cost constitutes a major barrier for adopting low carbon, and more efficient technologies, and compliance with measures can be increased if structures that allow us to take advantage of differences between marginal reductions costs, and incentivise action are accepted, supported.

Moreover, mechanisms that allow for the transfer of capital, and technology from developed countries to developing countries are necessary if we are going to have a real impact on global emissions targets. Additionally, the guidelines for CDM projects combine environmental requirements, with broader socioeconomic goals and helping to bridge the ‘development gap’ between countries of different economic capacity.

The future of CDM in the EU ETS is complicated, emissions trading, and CDM and JI are new, and we are still learning. The urgency of effective climate change mitigation requires mechanism like these in order to make a meaningful impact, and share the associated economic burden. Whether or not we like it, collaborative action is necessary, so itis time to iron out the wrinkles, and get to it.

Sources:

Environmental Investigation Agency (2011) Massive climate subsidies for HFCs industry to continue. . Retrieved 31 March 2014 from:

http://eia-international.org/massive-climate-subsidies-for-super-greenhouse-gas-industry-to-continue

EU ETS (2013) CERs and ERUs market as from 2013. Retrieved 31 March 2014 from:
http://www.emissions-euets.com/cers-erus-market-as-from-2013

European Commission (2013) The EU Emissions Trading System. Retrieved 31 March 2014 from:
http://ec.europa.eu/clima/publications/docs/factsheet_ets_en.pdf

Piris, Pedro (2010) The European Union Emissions Trading Scheme: A Succinct Review, by Pedro Piris-Cabezas 2010.

UNFCCC Website, (Last updated March 2014) Clean Development Mechanism. Retrieved 31 March 2014 from:
http://cdm.unfccc.int/index.html

 


Asya Marhubi >>

CERs and the European Emissions Trading Scheme (EU ETS)

The EU ETS was devised as one of several strategies to meet the European Kyoto Protocol target of an 8% reduction for the period 2008 – 2012, and now for the more ambitious EU target of 20% by 2020. Policies regarding renewable energies and energy efficiency, agriculture, and transportation, (to name a few), also contribute to European emissions reductions goals.

The EU ETS covers approximately 45% of total European Emissions (EC, 2013), including emissions from the power sector, aviation (for flights within Europe, though the original proposal covered international flights as well), and has successfully managed to integrate environmental costs into financial cost structures, thus ensuring that emissions are allocated a cost which will be taken into consideration during planning. This puts a monetary value on emissions, and incentivises reductions, and investment into R&D of more efficient, and less pollutant technologies.

In order to provide some flexibility, the Linking Directive (2004) was brought into effect, which allows for the use of Kyoto Protocol flexibility mechanisms, and serves to connect the EU ETS with the international carbon market, and increases international cooperation. The incorporation of these mechanisms allows countries to meet some of their reductions commitments through obtaining Certified Emissions Reductions (CERs) – to focus of the post – and Emissions Reductions Units (ERUs) through the Clean Development Mechanism (CDM) and Joint Implementation (JI), respectively.  Both mechanisms involve the emissions reductions projects, the former in non-annex I countries (developing countries and LDCs), and the latter in annex I countries (i.e. those countries with binding KP targets) (UNFCCC, 2014).

Unfortunately, these mechanisms, which were designed to complement domestic reductions options, increase cost efficiency, and promote international efforts to reduce, have had unexpected results on the effectiveness of EU ETS.

Firstly, instead of supporting domestic reductions strategies CERs came to substitute for domestic action to meet international requirements. In terms of global emissions targets, provided the projects meet standards for environmental integrity, global targets will be met. However, an excessive use of CERs by EU countries for projects in non-EU countries undermines the EU reductions goals. In order to stay on track with for these goals, a limit on the use of CERs was put in place, forcing countries in the EU to consider domestic reductions. Unfortunately, difficulty in determining an adequate limit has made it so loose, that it creates little incentive for domestic action.

Secondly, CDM, in combination with over-allocation, has undermined the overall capacity of the mechanisms to create real reductions. Between the surplus of EUAs, and the availability of cheap CERs, industries under the EU ETS had to make very little domestic changes to meet targets. And if we consider cases like the HFC CER ‘fraud’, where Chinese and Indian companies were producing more HCFC-22 to take advantage of CER revenues for the subsequent destruction of HCFC-23 byproduct (EIA, 2011). Moving forward will require higher standards regarding the environmental integrity of CDM projects, in order to guarantee the effectiveness of our strategies to stabilize CO2 concentrations.

Regardless of potential and actual problems associated with CERs in the EU ETS, the most cost effective path to low carbon intensive economies requires that ‘where-flexibility’ mechanisms like CDM. Cost constitutes a major barrier for adopting low carbon, and more efficient technologies, and compliance with measures can be increased if structures that allow us to take advantage of differences between marginal reductions costs, and incentivise action are accepted, supported.

Moreover, mechanisms that allow for the transfer of capital, and technology from developed countries to developing countries are necessary if we are going to have a real impact on global emissions targets. Additionally, the guidelines for CDM projects combine environmental requirements, with broader socioeconomic goals and helping to bridge the ‘development gap’ between countries of different economic capacity.

The future of CDM in the EU ETS is complicated, emissions trading, and CDM and JI are new, and we are still learning. The urgency of effective climate change mitigation requires mechanism like these in order to make a meaningful impact, and share the associated economic burden. Whether or not we like it, collaborative action is necessary, so itis time to iron out the wrinkles, and get to it.

Sources:

Environmental Investigation Agency (2011) Massive climate subsidies for HFCs industry to continue. . Retrieved 31 March 2014 from:

http://eia-international.org/massive-climate-subsidies-for-super-greenhouse-gas-industry-to-continue

EU ETS (2013) CERs and ERUs market as from 2013. Retrieved 31 March 2014 from:
http://www.emissions-euets.com/cers-erus-market-as-from-2013

European Commission (2013) The EU Emissions Trading System. Retrieved 31 March 2014 from:
http://ec.europa.eu/clima/publications/docs/factsheet_ets_en.pdf

Piris, Pedro (2010) The European Union Emissions Trading Scheme: A Succinct Review, by Pedro Piris-Cabezas 2010.

UNFCCC Website, (Last updated March 2014) Clean Development Mechanism. Retrieved 31 March 2014 from:
http://cdm.unfccc.int/index.html

 


Gabriela Pella Fernández >>

CSR in SMEs- The power of the little

When you start a small business you are looking for it to become known and successful. The success comes with different hidden issues.

I come from a country in which small and medium enterprises (SMEs) reflect 49% of the GDP of the country, in a country that is growing from the last 20 years. It is a country where innovation and consumption are essential part of the industry.

Such rapid growth cannot become sustainable or socially responsible if it is not for everyone and working together. Being such a large country, the social and economic gaps are widening, becoming almost impossible to develop isolated communities. That’s when small and medium enterprises play an important role.

” Our model is recognized worldwide. Our commitment is to contribute to build healthier and inclusive cities. “

Albina Ruiz, founder and CEO of Ciudad Saludable.

photo: Albina Ruiz, founder and CEO of Ciudad Saludable.

Business ideas come from entrepreneurs who know what is the need and how can it be meet , there is when an SME is born . They are innovative enterprises because they know their market and especially the culture and customs. Having a small number of workers is advantageous for them because decisions can be made in a very fast and efficient way, achieving dramatic results and rapid growth.

Implement corporate social responsibility (CSR) as a core strategy is to integrate voluntarily in terms of resources and values ​​of the company ‘s concern for social and environmental issues and apply across the value chain and its interactions with all stakeholders ( suppliers, customers, employees, the community, shareholders, environment.)

Being a good member of the community impact positively but not enough to make actions from time to time , it is included in the strategy a responsible attitude in order to be competitive in the long term. SMEs are the largest contributor to employment and the economy.

photo: andina.com.pe/ Peru moda 2014

The fact that the message is efficient not only depends on the creativity of sustainability reports. Is, among other variables, about attitude and starts at the office.

Those who run the company should start with the good example and never forget the values ​​with which they started. This way you can reach a high employee engagement, an excellent working environment and a highly effective communication between all.

What counts in a small or medium business is innovation among its range of products, the flexibility to make decisions by being fully horizontal company and above all is the opportunity to grow together for something better.

Entrepreneurs should know that being sustainable is not to spend money, is invest it in something that will lead them to savings in the long term and an infinite loyalty to their stakeholders. It should start with the right foot to stay on the right path. (See bellow some examples of how you can sustainability help your company).

Green Profits for SMEs

Pinche aquí para ver el vídeo

To conclude my idea I want to emphasize that SMEs can make the change that is needed, I think we should put them as an example in many of the actions they take. Not just a powerful company can make a change,  is the person behind the company that can do it. If one is confident that the values ​​and actions taken in the company are correct then there begins the change.

Working with the world is to work for the world, let’s do it!

 

Bibliography

http://www.andina.com.pe/agencia/noticia-promperu-90-empresas-participaran-peru-moda-2014-son-pymes-500115.aspx

http://cendoc.esan.edu.pe/fulltext/e-journals/PAD/7/arbulu.pdf

http://elcomercio.pe/economia/peru/peru-liderara-crecimiento-economico-region-hasta-2018-noticia-1711058


 


Guido Preti >>

The EU ETS double potential

Reducing GHG emissions and raising funds for international climate finance


In this blogpost I would like to investigate if and how the EU ETS (European Union Emissions Trading Scheme) could represent a tool to drive financial funds to climate actions besides being a flagship programme in the EU to reduce the emissions and move forward towards a greener and low carbon society.

The EU ETS is the largest carbon market worldwide (75% of the total) and covers about 50% of the total EU emissions. It is a market-based mechanism that – putting a price on carbon – has created a financial incentive for the big emitters (mainly power plants and factories) to reduce the emissions. Since 2005 it sets a cap on the emissions of the total amount of certain GHG (GreenHouse Gas) that companies can emit each year. A fixed amount of allowances (the EUAs, the currencies of the European carbon market) are issued or auctioned. Each year companies can use those allowances to meet their targets or else buy more credits from other emitters or on the market or funding other projects to get the corresponding offset credits (CERs, Certified Emission Reductions, from CDM Clean Development Mechanism projects – implemented in non-annexe1 countries, mainly developing and emerging economies – or ERUs, Emission Reduction Units from Joint Implementation projects – in annexe1 countries: but there are tighter limits on the amounts of credits possible for these two offsets). Therefore, the EU ETS provides flexibility in the means and it is cost-effective because emissions are cut where it is most convenient.

The key points I want to highlight are that the cap will be reduced over time (thus causing more investments in clean technologies or increased purchasing of allowances) and since phase 3 of this system (2013-2020) fewer allowances are grandfathered (free allocation) as the default method for allocating EUAs allowances will be through auctions: more than 40% in 2013 and then growing year after year.

Actually, during phase 2 (2008-2012) the annual quantity of the allowances that have been auctioned was only about 3% in average: Germany about 9%, UK 7%, The Netherlands  3,7%, Austria 1,3%, Ireland 0,5%, Hungary 2%, Czech Republic (2million). (EU Commission, 2014).

Yet, with the new mentioned regulations of phase 3 the revenues related to the auctions could be consistent – upon the condition that the demand for allowances will pick up (as at the moment there’s a large surplus of about 2 billion allowances). Estimates of the total value of these revenues obviously depend on the carbon price, whose price is currently very low, about €4/tonne. To have a figure, as of 2012 (with a price of €7/tonne) estimates of revenues of the next trading period were of about €10 billion per year (CAN-Europe, 2012).

Now my point is to focus on how member states use these resources: could the revenue streams of these auctions be used to have a further positive impact on climate change?

In 2008 the EU Commission and the environmental committee of the EU Parliament had tried to introduce a binding earmarking of the EU ETS revenues to finance climate action (with about 50% in developing countries and the rest in EU climate projects) but this had been opposed especially by some new EU members, and at the end it was left as a voluntary tool, left open to the decisions of the Member States, i.e., it is voluntary.

This is reflected in the EU ETS Trading Scheme Directive which reports a non-legally binding recommendation according to which member states should spend at least 50% of auction revenues on measures addressed to tackle climate change “..to reduce greenhouse gases; to develop renewable energies, and other technologies contributing to the transition to a low-carbon economy; measures to avoid deforestation and increase afforestation and reforestation; forestry sequestration; capture and geological storage; a shift to low-emission and public forms of transport; research in energy efficiency and clean technologies; improvements in energy efficiency and insulation; to cover administrative expenses of the management of the European scheme” (Emissions Trading Scheme Directive, Article 10, Directive 2009/29/EC)

Unfortunately it is very difficult that voluntary allocation will work properly. There’s a lack of international cooperation. What are member states doing? Have they earmarked the EU ETS revenues either through budgetary or political decisions? Apparently only seven countries have done so. In the EU, Germany is the only country that decided to fully allocate the ETS revenues to climate financing. It set up a the Special Energy and Climate Fund (EKF) which receives since 2012 basically all the revenues from the EU ETS and – through a separate budget structure – operates climate related expenditures at national and international level. France has earmarked its revenues but for national political expenditures and social objectives. Poland might set up a special fund and address 50% of the revenues to national climate actions. Romania has an Environmental Fund and about 70% of the revenues go to it for national actions. Czech Republic earmarks at least 50% for national energy efficiency and international climate finance through and existing State Environmental Fund. Finland is addressing 100% of the resources to international ODA on climate change, through political earmarking. Hungary through political earmarking has addressed 50% of the auction revenues national spending for climate change (Esch, 2013).

Yet, the global arena is eager for climate finance. For instance, at the climate conferences (UNFCCC COP) made in Copenhagen in 2009, in Cancun 2010 and at every single summit since, countries of Annexe-1 (mainly the EU and other developed countries such as the USA, Japan and Australia) committed to provide by 2020 US$ 100 billion a year to developing countries from a variety of sources to fund mitigation and adaptation measures. But no clear way to fund that was set! Again, the revenues of EU ETS auctions could be one way to fund that commitment.

To mention that at the same conferences the EU and other developed countries “pledged jointly to provide nearly $30 billion in ‘fast start’ finance to developing countries in 2010-2012 to support immediate action on the ground”, commitment that has been already respected by the EU that managed to “pledge €7.2 billion over 2010-2012” (about ⅓ of the total pledged) despite difficult economic circumstances. This money is being spent on concrete climate actions in developing countries” (EU Commission, 2014).

Another example of a climate change mitigation policy that might benefit of binding earmarking of EU ETS revenues to climate change actions is the REDD program (reducing emissions from deforestation and forest degradation). Global emissions are roughly 25-30 billion tons of CO2 equivalent and deforestation accounts for about 15-20% of these: the potential relevance of REDD is quite obvious. Yet, how is it funded? REDD at the moment is funded through voluntary pledges / bilateral compensations, with Japan and Norway being the most “generous” countries. Cutting deforestation by 50% in the next five year period 2015-2020 would generate emissions “savings” between 3,300 and 9,900 Million tons of CO2e (IPAM GCP, 2014): these tons represent the supply available to be funded. But the actual total potential demand for REDD emission reductions for the same time period (based on voluntary pledges as of January 2014) is only 253 Mt CO2e. Therefore there’s a large gap between supply and demand. To make REDD working it would be necessary to link it to a direct market-based mechanisms (such as a carbon market) for those jurisdictions ready for it. Therefore, the EU ETS could provide the solution to address to REDD the necessary amount of money. Yet, with the actual surplus, it is necessary to look at the 2030/2050 timeframe: in this perspective the REDD credits could serve both to meet future compliance obligations and represent a reserve of allowances to hedge risks.

Therefore, to conclude, the EU ETS system – besides having a positive impact on emission reductions and investments in green technologies – it might also play a relevant role in channeling money towards international climate finance in the medium-term. To unleash this second potential and provide predictability of resources, policy makers should solve the current issues of the EU ETS (which is determining for instance such a low price of the allowances) and probably set for the member states a tighter regulation with stronger binding commitments and earmarking of the revenues.

References

A. Esch, Using EU ETS auctioning revenues for climate action, GermanWatch, May 2013 – http://germanwatch.org/en/download/7749.pdf

CAN-Europe Position Paper -Best use of auctioning revenues from the EU Emissions Trading Scheme, July 2012 – http://www.climnet.org/resources/doc_view/2056-can-europe-position-paper-best-use-of-auctioning-revenues-from-ets-july-2012

Emissions Trading Scheme Directive, Article 10, Directive 2009/29/EC – http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32009L0029&from=EN

EU Commission, Climate Action, Policies, Phase 2 Auctions, 2014 – http://ec.europa.eu/clima/policies/ets/pre2013/second/index_en.htm

European Commission, Climate Action, Policies, International climate finance, 2014 – http://ec.europa.eu/clima/policies/finance/international/index_en.htm

IPAM GCP Report 2014 – http://www.globalcanopy.org/about/press-enquiries/press-releases/new-report-calls-us12bn-boost-pre-2020-emission-reductions-fore

 


Mario Escamilla Quiles >>

Why CSR in SME´s

Corporate Social Responsibility is the voluntary integration of social and environmental concerns into business activities and relationships with its various stakeholders.

In general , CSR is characterized by the following aspects :

• Responsible Business Practice

• Voluntary initiatives that go beyond legal requirements and contractual obligations

• Activities beneficial to workers , other stakeholders ( including society) or the environment

• With a positive contribution to a target group , while minimizing the negative effects on others (including the environment ).

• Activities on a regular basis rather than an ad hoc basis (ie, related to business strategy )

 

 

Although CSR is usually tested in a context of large companies , it is also a strategic tool to enhance the competitiveness of SMEs. However, their impact is often not able to express themselves on facts and not usually manifest in the short term . CSR can positively influence the competitiveness of SMEs in the following ways

• Improved products and / or production processes , resulting in greater customer satisfaction and loyalty

• Increased motivation and loyalty of employees , increasing their creativity and innovation .

• Improved public image because of prizes and / or a greater knowledge of the business community .

• Best position in the labor market and better interface with other business partners and authorities better access to public aid through better company image .

• Cost savings and increased profitability due to more efficient use of human resources and production increase in turnover / sales as a result of the foregoing .

 


Mavis Asare Yaa >>

SMEs Shaping The Future In CSR

Small and Medium sized Enterprises (SMEs) are important drivers of growth in economies across Sub Saharan Africa, accounting for up to 90% of all businesses in these markets.

They are the vehicles for employment, job creation and key to the regions entrepreneurial environmental needs. Innovative progressive development in Africa would not have happen without them, Socio-economic paradigm shifts would not have happen without them, they have produce middle class in Africa and thus their unique developmental enterprise role.

Associating Corporate social responsibility (CSR) with big companies giving their beautiful huge size, high profit turn over and their well known public image is not a bad thing but CSR is very critical for small and medium-sized enterprises as well (SMEs are organizations of up to 1,000 employees).

CSR is not only about treating all stakeholders responsibly or ethically but also going beyond the minimum legal requirement and obligation stemming from collective agreement in order to address societal needs. This recent definition shows that CSR is not philanthropy.

License to operate, improved risk management, reduce cost from efficient improved ways, new innovative business opportunities, good corporate brand and improve trust with key stakeholders either employees, customers, the government, suppliers and investors are just few of the numerous benefits CSR gives to a company.

I know you will be wondering is this not expensive and time consuming for SME’s to do? Since most of the SME’s founders intention is to make money. Well one nut cannot always spoil the soup and thanks to globalization there are new founders who have desire to meet societal needs in mind and since they are the key drivers commitment to purpose is much easier to engender than big companies. And this makes them more socially responsible than their much larger counterparts.

Personal touch being concern is very important and this can be found only in the SME’s since they know each other and they are few in number flow of information is very effective. They involve employees in key decision making which makes them feel part of the company, give them better flexible working hours and a relax atmosphere to work which makes them like a big family which most large companies does not offer.

SMEs does not only attract the best talent it also grows and bring out the best in even weak staff which make their existence important especially since most of the best innovative product are now coming from SME’s. Since mostly motivation leads to creative and innovation employees are able to offer their best when their leaders empowers them. I will like to end my these with the Michael Hopkins’ definition of CSR

Corporate Social Responsibility is concerned with treating the stakeholders of a company or institution ethically or in a responsible manner. ‘Ethically or responsible’ means treating key stakeholders in a manner deemed acceptable according to international norms.

Social includes economic and environmental responsibility. Stakeholders exist both within a firm and outside.

The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation or the integrity of the institution, for peoples both within and outside these entities.

Reference:

http://mhcinternational.com/articles/definition-of-csr

Michael Hopkins (MHCi): A Planetary Bargain: Corporate Social Responsibility Comes of Age (Macmillan, UK, 1998).

http://www.huffingtonpost.com/amb-robin-renee-sanders/importance-of-sme-develop_b_888407.html