CLIMATE CHANGE AND SHIFT IN ENERGY LAW POLICY OF COUNTRIES
Author: Rithik Ittira Aby,
Student, 3rd year BA LL.B,
School Of law, Christ (Deemed to be University),
Bangalore.
Energy has shaped the life of humankind on this earth. Radical changes has been brought forth since humans learned how to control energy sources. Changes so immense were made, changes that our forefathers could have never even thought of. This was hugely influenced by industrialization.
Industrialization has eased the life of mankind, Great inventions and technologies came into force as a result of this phase. Every economic activity requires energy as input[1] .Everything required large amount of energy at that time and the world at that time was in need of a large amount of energy for the first time in the history of Earths existence. Even though it was the key to wealth better living it has had consequences. Now the problem we faced was to satisfy the growing demand for energy. The countries were competing amongst themselves for getting hand on the energy sources so as to increase their GDP and power. Most of the countries relied on conventional sources of energy which are very limited in nature, they are exhaustible. Climate change in turn added to the need for shift from conventional sources of energy to non-conventional sources of energy. The energy sector of the countries now faces a dilemma. Climate change has deteriorated the conditions of the earth, the ecosystem and the existing balance in the ecosystem was disrupted due to the human activities. The need for satisfying the demand for energy was also another challenge which needs to be assessed as the world was primarily depended on the conventional sources of energy. The energy produced from renewable energy sources alone could not satisfy the needs thus the paper analyses the role of lawmakers and the policies in the energy law sector with regard to the changing climatic conditions.
WHY DO WE NEED ENERGY LAW?
We need energy law for the prudent, rational and sustainable use of natural resources. Energy justice is a matter of huge concern, this social justice loos beyond traditional government and industry. There is always a section of society which suffers from the energy projects ,most of the time the government while implementing a plan does not look into the interests of every group, the principle of energy justice ensures that the government looks into those matters.
Human activities has led to the deterioration of the ecosystem and if it is allowed to continue then the very survival of life form is in danger as the climate change will result in the rise of sea water, changes in precipitation patterns. This branch of study allows the allocation of rights and duties regarding the use of energy resources between individuals[2]. It encourages incentives and initiatives which encourage the shift from conventional energy sources to renewable source of energy[3]. Good energy law and policy focuses on the protection of the human health , environment and combatting climate change. From exploration to extraction through processing, transportation and then to distribution, consumption of energy and to disposal of natural resources used in the production everything involves certain environmental consequences follow such as degradation of environment.
Energy security is another crucial factor while deciding the energy law and policy of a country. It refers to security of supply which means, continuous availability of energy at a reasonable cost and security of demand, continuous demand for energy products produced within country. Resilience is a major concern to the electricity sector as a result of series of disruptive change have shut down delivery of en
ergy at great economic costs
ergy at great economic costs
SOURCES OF ENERGY LAW AND SHIFT TO RENEWABLE ENERGY
Laws are derived from traditional principles which were enumerated from time immemorial, almost all the laws are mostly based on certain natural justice principles. The urgency for efficient energy laws were addressed by the international community for the first time. The Stockholm declaration on the human environment that took place in 1972 addressed the issues relating to the danger of overuse or exploitation of natural resources, climate change etc.. later it was acknowledged by various reports on environment health that renewable energy must be the prime focus in the twenty first century. Mainly the energy law is derived from three categories. Local level, national level, international level. There are different agencies working at the international level for promoting energy security, efficiency and affordability. They are mainly international energy agency, international renewable energy agency. The institute of energy economics etc.. national level organizations are there for the development of energy law, national level policies of a country determine the energy law.
Each countries that are part of the international conventions and treaties have an obligation to follow what is laid down in the said convention. In India article 253 of the constitution provides for the incorporation of international laws into the domestic laws.
INTERNATIONAL CONVENTIONS
THE RIO EARTH SUMMIT 1992
At this 1992 Summit, three major accords including Agenda 21, were signed by the countries. These aimed at changing the earlier approach of all the countries towards development and environment and seeks to bring in a change. Apart from the three agreements, two conventions were also signed, including the UN Framework Convention on Climate Change (UNFCCC) which was targeted at controlling the emissions of greenhouse gases (GHG) including mainly carbon dioxide into the atmosphere. There was no direct reference to the important role which Renewable Energy could play in clearing up the world’s energy scenario in Agenda 21
THE KYOTO PROTOCOL
1997 saw the signing of the Kyoto Protocol to the UNFCCC, which laid down legally binding Green House Gas reduction targets for many developed countries. To create some flexibility options for countries to meet their emissions targets which are set according to countries, a Clean Development Mechanism (CDM) was conceived. This mechanism allowed developed countries (called Annex-I countries) to implement GHG reduction projects in developing countries (called non-Annex I) and claim credit for reduced GHG emissions. The stage seemed set for Renewable Energy to enter the climate scene in a big way. MNRE already had a head-start in implementing carbon mitigation projects as pilot projects under the Activities Implemented Jointly initiative of UNFCCC. These were the precursors of CDM projects.
APPROACH OF COUNTRIES
The approach of countries on the renewable energy sector needs to be scrutinized. The paper focuses on the approach of developed country like USA and developing countries like India and China
USA
United states produced 85% of crude oil and refining. In 1919 US geological survey estimated that the oil will run out in 10 years[4]. Other European countries tried to drive out US out of middle east, in response to this they passed a law which had provisions that denied access to mineral rights to foreign entities whose governments denied similar access to US companies. What shaped the energy law of the United State of America was the oil shocks of 1970s. Israel entered into a armed conflict with its neighboring countries. The Arab ministers decided to call for an embargo on countries that were friendly to Israel, this resulted in an oil shortage across the country. Long lines of cars in gas stations were a normal scene[5]. Coal was one of the most used commodity in the country, the main use was for the generation of electricity. There was a huge impact on the consumption of coal and oil due to various factors. Some of these factors were the sudden reduction in the natural gas prices due to increased supply of natural gas[6]. which was due to the technological advancements such as hydraulic fracturing and horizontal drilling[7]. These reduced the reliance of industries on oil as the prices of natural gas decreased to a large extent. Air quality standards which were implemented in the late 1960s also incentivized many industries to switch to clean sources of energy. In 1985 the Federal Energy Regulatory Commission (FERC) brought about some major changes in the area which took away the monopoly in that business[8]. With competition being introduced in the system the price of natural gas declined and has remained constant till now.
Energy conservation and efficiency has been the single priority after the embargo of 1970s and forced the US congress to pass the 1975 energy policy ad conservation act, which banned crude oil exports except certain types of oils. Policymakers also emphasized on the fact that increase in domestic production of oil and natural gas would lead to an increase in the employment and reduce the price for consumers[9]. Moe than 90 percent of the coal is used in producing electricity but the policymakers have asked for reliance on renewable energy sources. Renewable energy sources will reduce the air, water pollution and is non exhaustible .coals usage in the market declined by 4 percentage much of the reduction in use is due to the reduction on the reliance on fossil fuels. At some point in time nuclear energy was the promising source but this notion changed after there were lot a number of serious nuclear disasters. The cost of production and the risk involved was very high. Three mile island disaster is one of the worst nuclear disasters that occurred due to both technical and human error. After the incident the country is focused on decommission and shutting down the old plants.
The prospects for short-term solar and wind energy growth appear favorable, with about 96.6 percent of net new generation capacity additions expected to come from these two resources in 2020. US tariff policies throughout 2020 will be detrimental for the future of renewable energy. Solar developers are hopeful due to the tariffs being imposed upon the import of solar panels. However, the US government expanded tariffs on Chinese imports as china being the global leader in the production of solar panels. The wind industry expects record growth for 2019–2020. Overall, the decline in wind and solar construction costs—weighted project costs fell 13 percent and 37 percent, respectively, between 2013–2017—will likely help cushion the impact of tariffs on imported components.
CHINA
Tackling climate change cannot be done without he cooperation of China. China is a developing country that has most o
f its revenue coming from the industries. Rapid economic growth have resulted in a huge demand for their energy demands[10]. China provides cheap labour and other incentives that force most of the countries to start their production plants there. china has had huge increase in its coal consumption. From 1990 to 2018 china’s coal consumption increased from 0.99 billion tons to around 5 billion tons[11]. This dependence of the industries has contributed to its urban pollution. So it was necessary for the country to bring in changes in its energy law as half of the energy produced was for the industries. China has set the target of 7.2 percent as its growth rate and the country has to either resort to renewable energy or reduce energy intensity. Country has started relying on renewable energy for most of its needs. China is a global leader in the wind energy, and has plans for solar energy[12]. China is encouraging he domestic companies to bring up new advancements in the renewable energy field[13]. China became the world largest producer of solar panels[14]. The policies of the country to an extent has shaped the domestic renewable energy market, the policies have favored the domestic power markets and has also encouraged flow of foreign capital for its further growth. This has helped Chinese companies in having corporation with the foreign companies situate in the Chinese soil. The policy of the country is in way that would foster the foreign partnerships. In accordance with the Paris agreement china has agreed to make non fossil fuel energy twenty percent of its energy supply by 2030. It is the world’s largest investor in renewable energy, hydroelectric power forms a major part of the renewable energy. The controversial Three Gorges Dam is the largest hydroelectric dam in the world. It is focusing more on wind and solar energy sources, there has been significant increase in the energy production from thee sources. By 2017 the country showed a tremendous increase of 28.5 percentage in its energy production from wind energy from the preceding year.
f its revenue coming from the industries. Rapid economic growth have resulted in a huge demand for their energy demands[10]. China provides cheap labour and other incentives that force most of the countries to start their production plants there. china has had huge increase in its coal consumption. From 1990 to 2018 china’s coal consumption increased from 0.99 billion tons to around 5 billion tons[11]. This dependence of the industries has contributed to its urban pollution. So it was necessary for the country to bring in changes in its energy law as half of the energy produced was for the industries. China has set the target of 7.2 percent as its growth rate and the country has to either resort to renewable energy or reduce energy intensity. Country has started relying on renewable energy for most of its needs. China is a global leader in the wind energy, and has plans for solar energy[12]. China is encouraging he domestic companies to bring up new advancements in the renewable energy field[13]. China became the world largest producer of solar panels[14]. The policies of the country to an extent has shaped the domestic renewable energy market, the policies have favored the domestic power markets and has also encouraged flow of foreign capital for its further growth. This has helped Chinese companies in having corporation with the foreign companies situate in the Chinese soil. The policy of the country is in way that would foster the foreign partnerships. In accordance with the Paris agreement china has agreed to make non fossil fuel energy twenty percent of its energy supply by 2030. It is the world’s largest investor in renewable energy, hydroelectric power forms a major part of the renewable energy. The controversial Three Gorges Dam is the largest hydroelectric dam in the world. It is focusing more on wind and solar energy sources, there has been significant increase in the energy production from thee sources. By 2017 the country showed a tremendous increase of 28.5 percentage in its energy production from wind energy from the preceding year.
The development of renewable energy in china can be classified into three
From1949-early 1980s: Initial stage of renewable energy development: Insufficient supply was the major problem the country face during that time. The increasing need for energy made them shift to alternate sources. China has been focusing on the development of small hydropower since the founding of the country in 1949.The scale of small hydropower in China has developed to 88555 small hydropower stations, 6930 MW installed capacity by the end of 1980 compared with
26 small hydropower stations with the capability of about 2.8 MW in 1949, which is rather huge compared to the initial energy sources. Hydropower generation was 12.7 billion kWh in 1980, which was responsible for about 34% of the national agricultural electricity consumption. Overall, development of renewable energy during this period in China mainly focused on the utilization of hydropower and rural biomass energy.
26 small hydropower stations with the capability of about 2.8 MW in 1949, which is rather huge compared to the initial energy sources. Hydropower generation was 12.7 billion kWh in 1980, which was responsible for about 34% of the national agricultural electricity consumption. Overall, development of renewable energy during this period in China mainly focused on the utilization of hydropower and rural biomass energy.
In 1980s: Beginning to form policies with guiding significance[15]: With the development of the reform and opening-up of China’s economy and business, China’s energy demand was increasing continuously as the industries that were doing business were numerous. Under this case, macro-policy environment in favor of the renewable energy growth started emerging in China. The “Agricultural Law of the People’s Republic of China (PRC)” in 1983 said that the use of straw in agricultural production could provide new energy and tackle the problem of rural energy shortage. The “Water Law of the PRC”, which came to force in 1988, encouraged the use and innovations of hydropower resources. In addition to the formulation of guiding policies, China began to use economic incentives to support the development of renewable energy since the 1980s. For example, the “Notice of Strengthening Rural Energy Construction” stipulated that renewable energy projects would be provided with subsidies in terms of 50% of commercial bank interest rate, covering small-scale wind turbine manufacturing, wind power plant construction, photovoltaic cell production lines, solar water heater production, bagasse power generation and other projects. It can be seen that in the 10 years after the reform and opening-up, a systematic guidance and subsidy policy system for renewable energy development was forming progressively in China, and the development of renewable energy began to step on a road of legalization and standardization gradually
In 1990s: Further development and improvement stage[16]: After entering the phase of 1990s, China’s guiding policies on renewable energy have further underwent huge modifications, and the national planning policies have also started to propose specific development goals. For instance, the “Outline of New Energy and Renewable Energy (1996-2010)”, released in January 5, 1995, pointed out that the actual use of renewable energy should be over 390 million ton of standard coal equivalent in the next. At the same time, the outline also pointed out that taxes reduction preferential policies for new energy producers or users would be given. In 1998, the “Catalogue of Industries, Products, and Technologies Currently Focused on Development by the State” noted that solar energy, geothermal energy, ocean energy, garbage power, biomass power generation and large wind turbines were included in the industries and products to be encouraged.
INDIA
A national committee on science and technology was set up in 1971 to advise the ministry and government on the formulation of policies which are focused on sustainable development. Former prime Minister Indira Gandhi is credited with the setting up of the Commission of Additional Sources of Energy, through CASE, Government aimed at increasing the research, development and deployment in the field of renewable energy[17]. CASE was one of the first policy of government of India towards Renewable Energy. CASE recommended various incentives to commercialize renewable energy as the high cost of Renewable Energy proved to be an obstacle in the path of commercialization. In 1982 a separate department of Non-conventional Energy Sources (DNES) was set up in the Government of India[18]. DNES could get everything done at the state and national level as they used to get immense funding. In 2006 the ministry name was changed to modern ministry of new and renewable energy (MNRE). The industry drafted the new and energy policy statement 2005 which focused on reducing dependence on oil imports, increasing access of energy to areas struggling on getting energy security.
In August 2004, the Government set up an Expert Committee in the Planning Commission to devise an integrated energy policy that deals with all sources of energy and addressing all aspects and linking it with sustainable development. This committee of 20 members was fairly broadly based and included respectable persons in the field of energy and other related fields from government, academia and the corporate sector. Power, petroleum, coal, atomic and non-conventional (RE) energy sectors were all represented by their secretaries. It thus covered the whole range of energy sectors. The committee had extensive terms of reference and was required to submit its report within six months. However, the committee could submit its Integrated Energy Policy Report (IEP) only after two years in August 2006. The consultation process for this report was started during the same time as the RE Policy Statement of 2005 and was considered at different levels
As a result of the power sector reforms that took place in India there was introduction of a number of policies which emerged in the energy policy space around this time, further complicating the case for the RE policy statement. Some of the legislations and policies which came up at this time and had an impact on the RE sector were the Indian Electricity Act 2003, the National Electricity Policy 2005, The Rajiv Gandhi Grameen Vidyutikaran Yojana (a countrywide rural electrification program) 2005, the Rural Electrification Policy 2006, the National Tariff Policy 2006 and the aim of‘ Electricity for everyone by 2012. in 2006 came the Integrated Energy Policy report. Most of these interventions were necessitated by the power sector reforms. But never in the history of the RE sector had so many associated and competing policies that were introduced at the same time
CONCLUSION
The countries are focusing on improving their renewable energy sectors and the energy laws applying to it. The main obstacle is the high cost of installation of renewable energy sources and another factor is that the countries have not yet digested the fact that climate change is a reality and not a myth, so they are not ready to accept other sources of energy and are sticking with the traditional sources. There is a great need to satisfy the rising energy demand. We need this branch of study for the rational and sustainable use of natural resources. There is always a section of society which suffers from the energy projects, most of the time the government while implementing a plan does not look into the interests of every group, the principle of energy justice ensures that the government has a duty to look into the matter instead of making the group suffer.
[1] Chigbo A. Mgbemene, The Effects Of Industrialization On Climate Change
[2] Alexandra Wawryk, International Energy Law: An Emerging Academic Discipline
[3] Energy Communication: Theory and Praxis Towards a Sustainable
Energy Future
[4] https://www.cfr.org/timeline/oil-dependence-and-us-foreign-policy, Accessed on 2nd February 2020 at 6:30 PM
[5] Fred Bosselman , A Brief History of Energy Law in United States Law
Schools: An Introduction to the Symposium
[6] DANIEL YERGIN, THE PRIZE: THE EPIC QUEST FOR OIL, MONEY AND POWER 718-21 (1993).
[7] https://insight.factset.com/the-economics-of-coal, Accessed on 2nd February 2020 at 7:15 PM
[8] https://www.ferc.gov/about/ferc-does.asp, Accessed on 3rd February 2020 at 9 PM
[9] Supra note 5
[10] Feng Wang, Chinas renewable energy policy: commitments and challenges
[11] https://chinapower.csis.org/energy-footprint/, Accessed on 4th February 2020 9:15 PM
[12] Jennifer K Sklarew, how can India and China serve as models for developing nations striving t build absorption capacity for renewable energy technologies
[13] Supra note 10
[14] Supra note 10
[15] Jingli Fan, The Development of China’s Renewable Energy Policy and
Implications to Africa
[16] ibid
[17] Ashok K Mangotra, Renewable Energy Scenario in India: Quest for an Appropriate Policy
[18] ibid