The FINANCIAL — At this very moment, energy companies in Iceland are doing what Europeans and Americans consider unfeasible. They supply more than 80% of the country’s energy from renewable hydropower and geothermal power sources.
Georgia seems fully capable of achieving such a fit. According to Transparency International’s 2008 report on Georgian Renewable Energy policy, energy generated from wind, solar, geothermal and biomasses sources can be as much as 15-17 billion kilowatt/hr. annually, compared to the current use of approximately 8 billion kilowatt/hr. annually.
In 2007, EBRD announced the Caucasus Energy Efficiency Programme (CEEP), targeting SMEs in Georgia, Azerbaijan and Armenia to implement local energy efficiency initiatives through loans provided by local financial intermediaries. The first country to start the CEEP is Georgia and a sum of 35 million USD is set to be distributed among three Georgian participating banks, TBC Band, Bank Republic, and Cartu Bank. The end recipients of the funds are the Georgian private and residential sectors.
The dangers of climate change, the necessity of environmental sustainability and promotion of renewable energy are being discussed heavily at international economic and political forums. In fact, the European Union Energy Security policy is calling for the reduction of greenhouse gas emissions (ex. CO2 or carbon dioxide), increase of renewable energy consumption, investment in energy efficiency, and reduction in energy imports among its members.
As a developing country with aspirations to strengthen ties with the United States and the EU, Georgia should be quick to embrace environmental consciousness and energy efficiency. The European Bank for Reconstruction and Development (EBRD) and the United States Agency for International Development (USAID) have already invested considerably in energy sustainability projects in the country. However, the entire Georgian population, and especially the small and medium enterprises (SMEs), share the primary responsibility to educate themselves on how to introduce energy efficient habits in their daily lives and develop entrepreneurial ventures to promote renewable energy production and usage.
USAID has taken a more hands-on approach, partnering with governmental agencies to conduct energy efficiency studies. The Rural Energy Programme, supported by USAID, implements small projects and educational workshops on renewable energy and household efficiency within the rural Georgian communities. Through the programme, several small hydro power plants were constructed in villages across the country over the past two years.
In addition to local benefits to SMEs and the general population, Georgia stands to benefit financially and politically from participating in international energy efficiency initiatives as well. The 1997 Kyoto Protocol devised a mutually-beneficial system of international cooperation, often referred to as ‘cap-and-trade,’ on the collective usage of finite resources. The idea is slowly gaining momentum after being discussed at the December 2009 UN Climate Change Conference in Copenhagen.
The Kyoto Protocol is essentially a framework on climate change that regulates greenhouse gas emissions that are harmful by-products of fossil fuel-generated production. These emissions have been linked with severe pollution and average temperature increase of approximately 2 degrees Celsius per year.
Large developing nations often contest Kyoto Protocol regulations with the argument that industrialized nations have already used up their share of the environment while industrializing countries now have to carry the economic burden of “clean” production. To negotiate this issue, one of the forms of emissions cap-and-trade exchange – the Clean Development Mechanism (CDM) – allows developing countries to accept investment from the First World economies and large multinational corporations to implement environmentally conscious practices. Western countries buy emission credits, while industrializing nations earn income and investment.
For example, according to the United Nations Statistics Division, the United States emits 5,975 million tonnes of carbon dioxide annually, while Georgia emits only 6 million tonnes. Most EU country emissions amount to less than 1,000 million tonnes annually. To meet their carbon output limits, developed countries can buy emission credit from developing nations by investing in their local energy efficiency programmes.
According to the World Bank, the carbon credit market, operating under the Clean Development Mechanism (CDM), amounted to 126 billion USD in 2008, double its 2007 total. This exchange is a source of income for states like Georgia to promote sustainable living among the local population by delegating funds for energy initiatives to small private enterprises.
Despite a heated debate, the December 2009 Copenhagen Conference demonstrated that climate change is not on the short-term agenda for the world’s political leaders. Therefore, conditions for collective action among developing nations have never been better. More importantly, it is up to the local population to learn about energy efficiency, introduce environmentally friendly and financially sound energy conservation habits into their daily lives and take advantage of the increasing interest and investment in renewable energy in the Caucasus region.
Initiatives ranging from smaller adjustments, like using energy efficient light bulbs, to a longer-term commitment to learning about climate change and environmental sustainability, are commendable steps individuals can take towards energy efficiency.
Georgian SMEs have a greater potential to contribute to the country’s overall economic and environmental development. Small companies and enterprises should participate in the EBRD loan programmes to implement energy efficiency ventures, such as creating a large network of hydro, wind and solar power plants or exploring Georgia’s geothermal resources and following Iceland’s lead to energy sustainability.
Keti Khukhunashvili is the co-founder and administrator of the American Academy in Tbilisi Summer School. Currently, she is the director of operations at Open Maps Caucasus.
Simmons College Alum '09 Boston, M