Q&A with Egyptian Environment Minister Khaled Fahmy
Mada Masr, Cairo, Egypt
Fahmy addresses climate finance to Egypt, the use of coal, the country’s renewable energy strategy, e-mobility, rising sea levels, water distribution and more.
Marrakech – The 22nd Conference of the Parties (COP22) came to a close on Friday, having brought together 30,000 representatives from 190 countries in Marrakech for two weeks of negotiations.
Dubbed the COP of action, the global United Nations meeting was meant to help countries in beginning to embark on the path toward sustainable development and a low-carbon economy as stipulated in the Paris Agreement, which legally came into force on October 4 after it garnered the minimum number of ratifications. One hundred and eleven countries – who together produce 77 percent of global emissions –already ratified the treaty, and the United Kingdom, Australia, Pakistan, New Zealand and Japan became official signatories during this year’s COP meeting. Even the most optimistic observers could not have anticipated that the agreement would come into force so swiftly, with only 10 months having elapsed since the COP21 was held in Paris.
Under the terms of the agreement, the global community agrees to reduce emissions to limit the increase in temperature to “well under” 2C above pre-industrial levels by 2100. Two other landmarks agreements – the International Civil Aviation Organization’s (ICAO) decision to curb international aviation greenhouse gas emissions and an amendment to the Montreal Protocol to phase out hydrofluorocarbons – took place earlier in 2016 and enabled COP22 to start under the best auspices.
Several factors, however, have dampened the seeming gains in political capital. On November 8, Donald Trump was elected as the next president of the United States. Having vowed to dismantle the Obama administration’s signature climate change policy – the Clean Power Plan – during his campaign, Trump has appointed noted climate contrarian Myron Ebell to head the Environmental Protection Agency transition, prompting greater concern over the Trump administration’s international environmental policy. The initial enthusiasm following the ratification of the Paris Agreement was also tempered by the independent International Energy Agency’s World Energy Outlook 2016 report, whose aggregated data from the Paris Agreement signatories’ Intended National Determined Contributions (INDCs) projects the average global temperatures to rise by 2.7C above pre-industrial levels.
On the final day of the climate conference, representatives from 48 of the world’s poorest nations pledged to use renewable sources to meet their energy demands and to take steps toward green economies between 2030 and 2050, in an effort to show that countries most vulnerable to its effects are committed to slowing global warming.
Amid these developments, Mada Masr met with Egypt’s Environment Minister Khaled Fahmy on the margins of the COP22, asking him about the conference’s negotiations and Egypt’s most pressing environmental issues.
Mada Masr: Egypt, along with 193 other parties, signed the Paris Agreement this year, but, in the Middle East, only four countries have ratified it: Morocco, the UAE, the Palestinian Authority and Algeria. Why is it taking Egypt longer to ratify the agreement?
Khaled Fahmy: The ratification process in Egypt has started, but, as you know, our parliament has a long list of laws to examine and pass. This is really what is causing the delay. But the political will is there, and I hope that we can finish this process at the beginning of next year, in about two months. I can tell you that we are on track.
MM: What do you see as the principal positive outcomes of the 2016 COP meetings for Egypt, especially concerning the key issues: climate finance, technology transfer and capacity building?
KF: I think that, even though we are calling this COP the COP of Action, the result of the elections in the US has had a significant impact on negotiations, has spurred a lot of speculation and has taken up a sizable portion of discussion. Of course, this will be felt in the obligations and timetable of climate finance. All developing countries are wondering who is going to pay what, when, to whom and through which mechanism. In terms of capacity building, the resources are there to help countries develop more ambitious Intended Nationally Determined Contributions, and a lot of work is being done on the mechanisms to monitor, regulate and verify that ambitions are met. When it comes to measures to adapt to climate change, there is a lot of talk, but we haven’t seen any real action yet.
MM: Many of the adaptation and mitigation projects that Egypt listed in its INDC are conditional on receiving climate finance. In fact, Egypt projected that it would need US$73 billion to implement the commitments it enumerated in its INDC. Are there projects to address sea level rise and the effects climate change will have on agriculture and water supplies that Egypt has put in place without external financing?
KF: For Egypt, adaptation is critical. We need to work on drought management and water scarcity. We need to introduce better irrigation techniques and crops that are able to withstand higher temperatures and soil salinity. In terms of mitigation, renewables are on top of the list, and Egypt is currently working on behalf of the African continent to prepare the African Renewable Energy Initiative. Egypt has reformed policies to phase out fossil fuel subsidies, has introduced a feed-in tariff, has opened its market to private energy producers and is currently upgrading its energy grid. We have also streamlined our INDC plan by incorporating it into the national economic plan. Two years prior to the Paris COP2, Egypt formulated its 2030 strategy, collaborating with the Ministry of Planning to focus on projects that will serious further mitigation and adaptation. For example, the new metro line is a mitigation project, because it fosters public transportation, just like our renewable energy projects.
MM: Egypt is among the 11 countries whose greenhouse gas emissions are increasing at the fastest rate, and projections warn of a 300-percent increase by 2017 due in large part to the use of coal, according to the Climate Investment Funds. In its INDC, Egypt has not indicated a carbon dioxide-reduction target. How do you think the government can efficiently tackle this issue and drastically reduce CO2 emissions?
KF: Our upcoming INDC plan will contain this number. The number is known, but we could not disclose it in the INDC we presented in Paris because we did not have a Parliament at the time to approve the government’s program. So it would not have been honest to include a number to which the Parliament might not have agreed. The second factor is that the study of Egypt’s energy mix strategy, which was funded by the European Union, was not finalized before COP21 and had not been adopted by the Supreme Council of Energy. The approval came in 2016 and included mitigation and adaptation projects.
On the topic of emissions, developed countries are the ones who pushed us into this situation, and they now ask us to decrease our greenhouse gas emissions without offering an alternative, providing financing or transferring technology. What are we expected to do: try to pass this in Parliament, telling them that we are going to stop developing because other countries have polluted the environment?
MM: In April 2015, Egypt amended the executive regulations of the environment law to allow and govern the use of coal. Cement firms now need to invest in greenhouse gas emission-cutting initiatives to renew their operational licenses. Have cement factories respected this amendment, and how many of them have started using alternative fuels and raw materials in addition to coal to fire their kilns?
KF: As you know, the coal is used in the cement industry across the world. No one uses gas, and they certainly don’t use only renewables. There was a misunderstanding in the Egyptian media and people thought it possible to use only alternative fuels to fire cement factory kilns. It is not the case. In reality, we did not have an alternative to importing coal because of the state of our gas reserves and its international price. We could not introduce energy subsidizes for the cement industry. With the new amendment, each company that wants to change its source of energy has to submit an environmental impact assessment study that the Environment Ministry must then approve as a part of the permit process. The factories also need a permit from the ministry to import coal. The amendment has been respected because the penalty is high and the breach easy to notice. We made it obligatory for cement firms to include CO2-emission reduction measures in their plans and to replace a percentage of the use of coal in its energy mix with alternative fuels. According to the International Finance Corporation report that recently came out, the cement industry can replace 20 percent of the coal used in its energy mix with alternative fuels without experiencing major extra costs. But they need to have good supply chains. With more investment, factories can reach an energy mix with a 30-percent composition of alternative fuels, which would prevent 5.8 million tons of CO2 from being released into the atmosphere. We told cement companies that they can use alternative fuels without being too specific on which ones. They can use industrial waste, oil from refineries, medical waste or plastics, whatever makes sense for them technically and economically. The firms are issued two-year permits. To extend the permit, they have to present an environmental performance report to a committee composed of members from academia, the cement industry, Egypt’s municipalities, NGOs and the Egyptian Environmental Affairs Agency. The committee has the authority to decide whether or not to grant the extension. It is a transparent and inclusive process.
MM: Much discussion at this year’s COP has lingered on the multiple benefits of using renewables sources, specifically in Africa. When it introduced the feed-in tariff law and subsequently announced that it would phase out fuel subsidies, Egypt attracted a significant amount of attention from investors who flocked to invest in renewables. However, since then, legislators have reintroduced a clause that allows domestic arbitration to resolve all disputes, and a large chunk of investors has pulled out of the market. What could be done, in terms of policies and market, to restore investor confidence?
KF: The Ministry of Electricity is addressing this, and, of course, there are people that pulled out and there are people that came in. We are now in the process of signing contracts. From the beginning, it was clearly said that the companies would be in essence Egyptian, even as a joint venture. As such, they would be subjected to Egyptian law. I think that, if there is a good business case, investors will come, and the best way to facilitate this is through incentives. In Egypt, we are not just looking to assemble renewable energy systems, but we also want to manufacture parts locally. So, I think the second round of the feed-in tariff scheme will be different from the first in many ways.
MM: Egypt is leading the African Renewable Energy Initiative (AREI), which has the significant ambition to garner 10GW of electricity from renewable sources by 2020 and 300GW by 2030. How much money does this initiative need to get a kickstart? Germany and France have put down 8 million euros. How much more will you need, and are you confident this demand will be met?
KF: Germany just allocated 2 million euros for the establishment of the AREI’s interim delivery unit, which will be established at the headquarters of the African Development Bank in Abidjan, Ivory Coast. France has already pledged 6 million euros for this unit, which brings us to 8 million euros in total. But that is just for the unit. France pledged another 2 billion euros to support the initiative itself, and Germany will invest up to 3 billion euros in the AREI. We are planning to launch the initiative after the governmental board meeting and ahead of the African Union summit that will take place in January 2017. The AREI will finance both small-scale renewable projects and larger ones, and we will have to complement the myriad renewable energy projects that already exist, such as Power Africa, IRENA and SEforALL. And we hope that, down the line, the AREI will act as an umbrella for all of these projects.
MM: What are Egypt’s plans in terms of e-mobility? Is the Ministry of Environment working hand-in-hand with the Ministry of Transportation to develop the electric and hybrid car sector, and what are the contours of the state’s clean transportation strategy?
KF: We have a project with the Global Environmental Fund on sustainable transport, and one of the components I added is hybrid cars. We have just finished a study that compares hybrid and electric cars, focusing on what the market needs, and I have informed the ministers of the economic ministerial group. They will soon schedule a session to allow me to present the outcomes of the study and what type of incentives will be needed to allow this sector to thrive. Customs will be the major incentive. There is no doubt about that. We prepared an economic study to compare the customs we collect in the state budget and the money we pay for health centers to strengthen our case. The Minister of Finance Amr al-Garhy is very interested by the idea.
MM: When you think of climate change’s impacts on Egypt, what keeps you awake at night?
KF: The sea level rise, no doubt about it. If we do not reach the goal set by the Paris Agreement, and, even if we do, we will need major projects to protect our shores against a rise in sea level. But imagine a minister going to a farmer whose land will be impacted and telling him we are implementing a major policy reform program, that we are phasing out subsidies and that, guess what, you will lose your land and your only source of income not due to any of your own personal actions. To address sea level rise, we will need to adopt a mix of measures. First, we need to try to minimize the impact by building seawater barriers to protect our shore and discourage activates at vulnerable spots by forbidding any new construction at these areas. In terms of agriculture, we must define which land will be impacted and change the primary activity to fish farming, which is being done already. We want to focus on high-tech fish farming, such as has been done in the newly established fish farms in the Suez Canal’s Lake Borolos. In Lake Manzala, we are working to reduce incoming pollution from industrial and sewage sources.
MM: As Egypt’s minister of environment, what is your take on the 1.5 million feddan reclamation project, which could deplete Egypt’s aquifers?
KF: This is a very important project that is being advanced under a public-private partnership, and we have already done made a lot of investment on the ground, to dig wells and build pumping stations. Big projects, like this one, need very efficient monitoring. This is why environmental issues must be managed through an approached focused on strategic environmental assessment rather than the typical one-shot approach. We have established a team to monitor the project gradually. It is true that there are a lot of opinions about this project. But it will be using the best available technologies to retain water and combat evaporation, such as using rice husks, which contain cellulose, or recycled glass. We will use drip irrigation and choose crops that can withstand higher temperatures and survive on little water, such as pomegranates, olive trees and wheat. Depending on the locations, part of the food produced will be exported and the rest will be consumed locally.
MM: Egypt’s 2030 strategy plans to bridge from the expected 80-percent shortfall in water supply and to increase the annual per capita share of water to 950 cubic meters from its current 663. What project and policies has the government advanced to make this a reality?
KF: We will accomplish this by implementing water recycling and reuse measures, in addition to better management. We need to upgrade our wastewater treatment facilities, so that we can reuse the water. In addition, we need to extend our sewage network system, which currently only covers 30 percent of the population. Reuse is an important component of our water strategy, as is better management of water, particularly in irrigation.
MM: Finally, do you see a direct causal link between climate change and the wave of Egyptian migrants leaving the country?
KF: I see a link between poverty and emigration. Poverty is rooted in income distribution, investment, education and vocational training systems and democratic participation. Climate change still plays a minimal part. How soon it will become the main cause of migration depends on the developed world.