The polluter pays: does it apply to everyone?

By Ingo Ploger, Entrepreneur and President of CEAL, Brazil

 

France, one of the leaders of the European Union and the G20, launched the slogan ‘the polluter pays,’ mainly referring to greenhouse gas (GHG) emissions, for the COP26 round in Glasgow.

Punishing is popularly effective, but globally difficult. The EU quickly understood that it cannot achieve its 2030 GHG reduction targets, and that it alone cannot achieve them without including the global supply chain. The global production chain must also necessarily be sustainable, otherwise the account will not close.

The mainly European campaign against deforestation, which is one of the causes of GHG, shows the seriousness of the problem. The punishment of offenders will be very severe, if they do not comply with the premises defined by the European Commission. There will be market access restrictions and economic sanctions. This hits Mercosur in the recently agreed agreement between the EU-MS about to be ratified by parliament.

Public opinion closely follows the efforts of South America, especially Brazil, to achieve zero deforestation, as the EU wants. It is no longer the governments that want it, nor the companies, but much more the final consumer. When buying products, if they have any trace of deforestation, you will change your options.

The financial system quickly understood this preference, and although it has had the Equator Principles for sustainable financing for more than 15 years, it provides an aggressive way of offering ESG-based financing, the parameters of which are not yet well defined at the international level. That doesn’t matter, because the point is to show your commitment quickly and get an internationally accepted product.

Everything seems very logical, transparent and clear. If Mercosur does not show effectiveness in combating deforestation, it will have market restrictions, selective financing and its image damaged. But the slogan “polluter pays” may have a more global than local interpretation, and then the consequences could be quite different. Certainly net zero deforestation (gross legal deforestation minus reforestation of native trees) is a very well accepted goal for all, while also combating illegal deforestation at all levels. For Mercosur, this would mean a great goal in reducing emissions.

Due to the implementation of the Forest Code, plus possible compensatory measures and public policies, this objective could be achieved in a 15-year horizon. Good news, would we have the problem solved with this? Certainly not and then we would be looking at the real size of the problem, in global terms.

Analyzing the trends of Giga, Demography, Energy and Communication, we quickly come to the conclusion that while the average U.S. citizen consumes 87,000kW/h and the average European 40,000kW/h, the average Latin American only consumes 14,000kW/h.

We go back to the metric that if the world wanted to have the American way of life, we would need five planets, and three planets in the European style, considering only the consumption of energy and raw materials, foreseeing a population of 10 billion inhabitants in 2050.

The root of the GHG problem is found in energy matrixes and consumer lifestyles. In addition, the energy matrix of Latin America today has the best rate of renewables in the world.

Observing the disruptive innovations for electric mobility, the consumption of electric energy will increase, and we have an exponential increase in the consumption of information / data, today measured in Exabytes (one billion Gigabytes), which increases in seconds. That increases energy consumption; per capita energy consumption does not tend to decrease, but certainly to increase.

Considering the slow decline in per capita energy in developed countries, and strong growth in developing countries, world energy consumption per capita will continue to grow, recalling that this energy is predominantly fossil and nuclear.

Add the curious fact that world electrical energy does not exceed 15% of total primary energy consumption and that renewables today are not more than 11% of primary energy (nb rate of renewables in Latin America and 31%).

I take the liberty of asking, is the slogan of “who pollutes pays” still valid in these circumstances?

China, which thinks about the millennium cycles, has already stated that its goal of zero emissions has been extended until the year 2050. Well, my grandchildren, who are now 20 years old, will be my age to see if China has managed to meet their target.

The EU frequently postpones its goals and the trend now is to deviate the goals from any political mandate.

Given the large number of inhabitants with high per capita energy consumption, will they be willing to pay in proportion to their pollution?

Here I only referred to the issue of the sustainability of our planet Earth. But being in the middle of the second wave of the pandemic, I hear political voices of global reference from Europe and the United States, which have expressed themselves in holding China responsible for the pandemics that broke out in recent years.

If the French motto is really implemented, what would it be like: ‘Who pollutes pays’? The scope of the concept does not necessarily have to be limited to sustainability, but it would have the legitimacy of extending to global health contamination, which puts populations and millions of people at risk, in addition to limiting world economies.

As a careful and critical observer of the evolution of giga and megatrends, the crusade of France that is accompanied by the vast majority of European countries, to achieve a politically effective result based exclusively on the principle of punishment, does not seem sufficient.

We know from historical lessons that hungry people eventually turn against the ruler. France does know it well.

It is a very risky political process, which does not seek its strength in solidarity, in the union of powers, in stimuli, in the union of principles, in international cooperation, but in the qualification of good and evil, which may have very different consequences.

After the pandemic, we will have much greater poverty in the world and accumulated wealth as well, suggesting a different cooperation pact. Otherwise the radical political forces will gain more strength every day. It is not what we seek to consolidate our democracies.

I think the EU urgently needs to review its position. Biden’s first 100 days project points in another direction: much more cooperative, in looking at joint construction and global cooperation, rather than punishment, even opponents.

On the agenda of sustainability, democracy, free and open societies, Latin America is much more of a solution than a problem. It is not that infractions should not be punished, but they cannot be the basis of international cooperation when it comes to seeking solutions for the planet. We only have one planet, we do not have another, that is why the One Plant to Live OPL initiatives need innovative, disruptive, but solidarity and global solutions.

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