Tag Archives: EU commission

Building Retrofits for Economic Stability and Energy Security

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The 25th edition of the Krynica Economic Forum (Poland), the “little Davos of CEE”, took place a few weeks ago. After the opening with the Polish, Croatian and Macedonian Presidents on building a Resilient Europe, I took part in a panel organized by “The European Alliance of Companies for Energy Efficiency in Buildings” (EuroACE) on the economics and energy security aspects of renovating European buildings. A most timely topic as most buildings are energy colanders, and hence account for 40% of energy used in the EU – where more then half the energy is imported at a cost of €400+ billion.

Adrian Joyce. Archives of the Economic Forum, Krynica, Poland.

EuroACE’s Adrian Joyce reminded us that over 75% of European buildings have a very low performance level, and are a major source of energy waste and economic instability given Europe’s reliance on foreign energy. Yamina Saheb, from the Joint Research Centre of the European Commission, pointed to the economic opportunity for growth, job creation and side benefits like better air quality, health and productivity, key elements for prosperity and wellbeing in a sector that contributes 7% of EU GDP and 12 million direct jobs, adding that an ambitious renovation programme could create another 5 million jobs by 2030.

Oyvind Aarvig, from the Norwegian Ministry of Local Government and Modernisation, stressed the need to renovate existing buildings given that 80% of the buildings in 2050 have already been built. He raised the challenge of urban sprawl and renovating is not enough; we must also increased building density intelligently to create sustainable communities where people want to live. Andre Delpont, from the Bordeaux-Euratlantique Public Planning Authority, concurred that energy efficiency coupled with densification in large-scale urban regeneration projects is key to attracting investors.

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Archives of the Economic Forum, Krynica, Poland.

The city of Krakow, one of Europe’s most polluted cities because of coal burning, is opting for large-scale energy retrofits aiming to improve efficiency by 50% and co-financing its €500 million program through European Structural Funds. For Witold Smialek, Advisor to the Mayor of Krakow, the biggest obstacle is inability of owners and tenants to contribute their small contribution to the project and that is slowing down progress but in the end, he feels this can be resolved. Over 80% of Polish buildings have more than 25 years and are in need of renovation according to Oliver Rapf, Executive Director of the BPIE, meaning that the economic and social potential in renovating the building stock in the country is enormous. He commended the ambitious works in Krakow as an exemplary project that other Polish cities should replicate.

I commented that appropriate building technologies, including insulation, windows and lighting, can significantly reduce energy requirements and thereby costs, while boosting energy security in Poland and Europe. Replacing the 6,500 windows in New York’s Empire State building with energy efficient windows was one of the key elements that helped reduce energy consumption by 43% and saved $4.4 million annually with a payback of 3 years. The potential for the renovation of buildings, both in Poland and in the world is enormous.

Energy Utility Resistance

Attila Nyikos, from the Hungarian Energy and Public Utility Regulatory Authority, warned that reduced energy consumption meant lower revenues for energy utilities, as they must amortize massive fixed costs on a lower sales volume leading to higher energy rates for consumers, adding that occupants suffer while buildings undergo renovation works. He gave examples where owners refused free renovations because they wanted to avoid the inconvenience.

Takeaways:

  • When renovating a district, densification is key to attracting investors
  • Selecting the right timing for an energy retrofit and implementing integrated solutions is crucial to improve ROI
  • Multiple benefits can be important drivers (air quality, etc.) an inspire ambitious projects
  • Mixing local and EU funds is an effective answer to lack of upfront financing
  • To release the significant potential tied up in the existing building stock in Poland (and in the EU!) t is time to act. We need to start the work now (with proper planning), without delay!

Another important consideration is the need to align the interests of all parties involved. It is obvious that energy utilities will not promote effective energy efficiency programs if their profits depend on their volume of sales. Similar dilemmas exist between owners of building and tenants – owners will invest in measures to reduce energy bills if they see a real benefit for themselves. Regulatory measures (decoupling) can overcome such problems and are increasingly being deployed in America where utilities share part of the savings they generate for their customers. This sounds like a good starting for policy makers.

Silence of the Bees

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Picture credit: http://hdw.eweb4.com

Picture credit: http://hdw.eweb4.com

By Margo and Adam Koniuszewski

Over 40% of what we find in our plates including many fruits, nuts and vegetables, results from the pollination process. These “services”, mainly by bees but also butterflies, birds, bats and flies add over $215 billion annually to the global economy – some seven times the revenues of a multinational giant like Coca-Cola. Bees, including commercially managed bees, provide the bulk of this value through pollination while the honey, propolis, royal jelly and wax they produce represents only a small fraction. But the role of bees extends well beyond the economic. Ancient civilizations recognized and celebrated bees and their role in spreading the genetic material of thousands of plants. Honey was revered across the ancient world as a regenerative and mystical substance and the food of the gods in Mayan culture. In the Garden of Eden it is said that honey dripped from trees like rainwater and as far back as 5,000 B.C., “King Menes”, founder of the First Dynasty of Egyptian Kings was called the “Beekeeper”.

Industrial Agriculture

Today, industrial agriculture focuses on the utilitarian role of bees to pollinate vast monocultures. Honeybees are shipped when and where needed. The California almond is a case in point. 800,000 acres with 90 million almond trees stretching for more then 600 kilometers provide over 80% of the global almond production. With pollen available only in February, bees would starve in this environment. They must therefore be trucked-in from across the country for the job. A major logistical effort for some 5,000 trucks to bring 1.6 million beehives. This scale of trucking bees around is not without danger – accidents are common. Just last week, North of Seattle, a truck carrying over 20 million bees for blueberry pollination overturned on the highway, spilling 458 beehives that firefighters doused with flame retardant.

It is estimated that 2.5 million hives are being trucked around this way every year to Washington for apples and cherries, Dakota for alfalfa and sunflowers, Michigan for blueberries…

Bees in crisis

But the troubles of bees extend well beyond highway crashes. In the United States, beekeepers are reporting annual bee losses of 30% and more and the number of colonies shrank from its 5.5 million hives peak in the 1950s to less then 2.5 million today. This is the result of a combination of habitat loss, inadequate diets, mite infestation and disease, loss of genetic diversity and pesticides.

In Europe, since 1994, neonicotinoid pesticides have been associated with Colony Collapse Disorder (CCD) – where the insecticide confuses bees to the point where they abandon their hive. The same has been observed across the United States since 2006. UK studies link the pesticide to an 85% decline in queen production and confirm disruptions in the ability of bees to navigate and communicate. This is why the European Commission banned them in April 2013. Given that a worldwide ban would deprive Syngenta of 6.5% of its sales (source: Schroders Research), the science behind bees and pesticides is hotly debated and another culprit is pointed, the varroa mite, a parasite that has spread from Asia to the rest of the world and for which the impact of chemical treatment is showing mixed results – it is said that chemical treatment has helped the mite become more resistant at the expense of the bees.

Biodiversity decline and habitat loss are also having their toll. While farms located near natural habitats fare better, a study found that since the 1980’s there has been a 70% decline in key wildflowers. This means a lower diversity of plants from which bees can collect pollen. The genetically modified and neonicotinoid infected corn syrup they are fed by commercial beekeepers for their subsistence diet are also not helping.

The bee crisis is causing shockwaves well beyond environmental circles. New research by Schroders Investment Bank on “Bees and the Stockmarket” warns of impacts across industries including agrochemicals, food producers, retailers, beverages and the luxury sector. Meanwhile, the Obama Administration talks of a serious threat to food security and announced a federal strategy to protect honeybees, address habitat loss and biodiversity decline. $50 million has been appropriated across various agencies for research and to restore hospitable habitats for bees and other pollinators like the Monarch butterfly.

A Global Movement to Save Bees

Public authorities, the private sector and the public at large – all have a role to play. In 2010, the city of New York overturned a ban on beekeeping that had been in place since the late 1990s and “bee mania” has been spreading since with beehives being installed on skyscraper rooftops, community gardens and school backyards. Even the most  exclusive institutions like the Waldorf Astoria Restaurant have joined this movement – its has six beehives located near Central Park and serves the most prestigious honey in town. The private sector is also on board with organizations like the Cirque du Soleil in Montreal and the LVMH Group in Paris setting up hives at their headquarters and engaging in the protection and promotion of bees. But much of the leadership comes from individuals and associations around the world that are fighting unfriendly regulations and attitudes, overturning bee bans, installing hives and creating bee-friendly gardens with native wildflowers that benefit all pollinators. It may bee that in their consciousness, people everywhere are starting to realize that by protecting bees we are also protecting ourselves.

Maybee the bee still has a chance after all…

Bee Resources:

UNEP Report on Bees

White House Factsheet on Economic cost of Bee Decline and US Federal Strategy to Protect Honey Bees 

Bees and the Stock Market: Schroders Research Paper

Bees at the United Nations in Geneva

Nature Journal Study on Bee Addiction to Harmful Pesticides

European Commission Protecting Bees

Andrew Gough Blog with fascinating facts and stories about bees

Resource for Beekeepers

Health Benefits of Honey

Queen of the Sun Award Winning Documentary Film Review by Roger Ebert

A Bright Future for Europe is Possible

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As a Polish-Canadian who grew up in Montreal, I clearly see benefits for Quebec to be part of the Canadian Confederation and for Poland within a reconciled and vibrant Europe. Today, when America and China compete for influence, it is only through Europe that individual member states can still play a constructive global role.

IMG_1085Speaking in Geneva to an eclectic audience ranging from international diplomats to political affairs students at the Graduate Institute, outgoing European Commission President, José Manuel Barroso, took advantage of his newly found freedom to fire back at his critics (and those of Europe). Europe faced its share of crises over the past decade: constitutional (2005), financial, social and political, and geopolitical with the situation in Ukraine. But in opposition to his naysayers and to the “prophets of pessimism” who continue to announce the downfall of the European project, Barroso predicts that Europe will not only survive, it will grow stronger and play a growing role in global affairs.

Financial Crisis

In July 2012, at the height of the financial crunch, chief economists of European and American banks expected the exit of Greece and were split 50/50 on the survival of the Eurozone. But at the 11th hour, a political solution was found between the richest and most vulnerable members, balancing responsibility and solidarity. The Eurozone stayed united and stable. As French political economist Jean Monnet predicted, Europe will be built by meddling through crises.

lehman-colapse2-630x200To critics that claim Europe is too complacent, self-satisfied and only wants to protect its situation as the world’s premiere “retirement home” Barroso reminds that the Eurozone crisis did not originate in Europe, it was a spillover from the Lehman Brothers collapse: a “made in the USA” crisis. Something many tend to forget… But still no excuse the fragility of European Banks!

Surely, Europe confronts the same challenges as the rest of the world in terms of protectionism, unemployment, anemic growth and inequality. As elsewhere, this is fueling populist extremism and inflaming xenophobic fears. But despite the emergence of inward looking “tea-party” rhetoric in member states, Europe is in good shape. The last 10 years have tested its resilience and it has come out larger (moving from 14 to 28 member states), with better governance, while the Commission has never had so much say in European affairs. Europe also continues to be a major global player. Already much larger economically and population-wise then the United States, it remains an attractive objective for Ukraine and Turkey.

Resilient and Ambitious

By overcoming the various “stress tests” and defying conventional wisdom, Europe has shown a formidable capacity for renewal and strengthening. The Euro is stable and remains one of the two leading global currencies. This extraordinary resilience comes from Europe’s capacity for integration that is stronger then attempts for isolation and fragmentation precisely because, in a globalized world dominated by the American and Chinese heavyweights, not a single European state has the scale to matter. But a united Europe has the power to protect its interests and project its values in the world. Some member states (i.e., Germany) have realized that through Europe they can get obtain global relevance.

British Prime Minister Margaret Thatcher

Unfortunately, not all members understand that on their own they are too small. Americans used to call London, their partner for historical, cultural and language reasons, to find out what is happening in Europe. Now they call Berlin. The real challenge is therefore for states to commit themselves to the European project and protect their own future. Thereby lies the challenge that will decide on the future of Europe.

Continued global relevance

As questions of human survival start to take precedence over business as usual politics, a new approach capable of providing a globally cooperative response is needed. The European adventure, enlightened by two self-destructive attempts at world domination (WWI & II) provides an innovative approach for cooperation across nations and an appealing alternative to the greed of unregulated imperial liberalism.

Connie Hedegaard.And for those inclined to discount Europe as decadent and inward looking, it is worth reminding that it was Europe that convinced George Bush to organize the first G20 meeting, that launched the most ambitious trade liberalization program in history, including the investment agreement with China that is being discussed and that remains the source of 60% of the support for development in the world. In 2007 already, Europe adopted the first international climate package with 20% reductions in greenhouse gases by 2020. Now the target is a 40% reduction by 2030, which puts Europe in the pole position on climate action.

Looking Forward

In contrast to Barroso, his successor, experienced and colorful former Prime-Minister of Luxembourg, Jean-Claude Junker did not wait to speak his mind. Prior to the secret-ballot that elected him, he asked French tea-party leader Marie Le Pen not to vote for him as he does not want the support of those who reject, hate and exclude. Among his first tasks he must deal with a new eurozone crisis in Greece, mounting anti-EU sentiment in member states, create jobs across Europe and resolve the lingering confrontation with Russia (with its influence in Syria, Iran and Libya). An exciting job description indeed…

EU Brokered Russian “Winter-Gas Package” for Ukraine buys time for Europe

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With winter at our doorstep and just hours before leaving office, outgoing European Commission President, José Manuel Barroso, announced a last minute deal to keep Ukraine and Europe warm this winter and give assurances to Gazprom that Ukraine will be able to pay its debts of $3.1 billion and make upfront payments for the 4 billion cubic meters of gas ($1.5 billion) to be supplied until March 2015. Ukraine now also feels comfortable that Russia will deliver on its commitments. Financing will come from the current IMF programs and other sources.

PutinGasThe gas supplies to Ukraine had been cut since June, following deteriorating relations between the two countries. Meanwhile the tension between Europe and Russia was increasing and fears that Russia would cut gas supplies like it did in 2006 and 2009 resurfaced. What aggravated Russia most was the re-export of Russian gas from Poland, Hungary and Slovakia to Ukraine. Retaliation through lower supplies to these highly dependent central-European states heightened the crisis.

Russia’s Eroding Negotiation Position

The deal implies a $378 per cubic meter rate price, far below the original Russian asking price of $485. Similarly, Poland managed to renegotiate its rates with Gazprom in 2012 with a 15% reduction on a price of around $550, the second highest in Europe at the time (after Macedonia).

The recent reduction in the price of oil may have played in favor of Ukraine and Europe. While Russia was counting on oil at $100 a barrel for its 2015-2017 budget, the recent drop to $80 and expectations that it may fall to $70 in the coming months has severe implications for Russian finances and economy. The deal with Ukraine and the EU provides much needed stability for the coming months.

A Golden Opportunity for Energy Security through Efficiency

Europe depends on Russia for 30% of its gas supplies. In Ukraine this dependence represents 40% of its entire energy consumption. But Ukraine is one of the least efficient countries in terms of its energy use and it is promoting energy waste through misguided fuel subsidies representing 7.5% of its GDP. With an energy intensity that is twice that of Russia and 10 times the OECD average, the IMF is correct in requiring a major energy reform to reduce energy waste as part of its bailout.

Similarly, the EU is looking at improving energy security by implementing energy efficiency policies that would result in 40% savings by 2030, with equivalent reductions in gas imports. These measures could save Europe up to €549 billion between 2011 and 2030 according to the Commission.