DETAILS OF CHARTER PRINCIPLES

1. The establishment of targets, programs and other action to reduce energy-related atmospheric emissions, and the enactment by legislation of performance standards and labelling for energy services and systems, based on international best practice
   The emissions from all energy technologies must be controlled by setting standards: for example, for emissions; ambient air quality; water quality; soil acidity; performance; and hazardous substances.

   Some limited emissions controls have been provided for in the Kyoto Protocol to the United Nations Framework Convention on Climate Change. This Protocol should be immediately ratified by the signatory parties so that its provisions may become effective. In addition, the following action is necessary:

   • Appropriate means of enforcement and sanctions should be provided to ensure that each country’s commitments are respected.
   • By further negotiations all nations should commit themselves to binding targets for emissions reductions. Appropriate incentives and guarantees should be offered by the developed nations to all developing nations to ensure that their development is not adversely affected by their emissions reductions targets.
   • The current commitments of developed countries, to reduce relevant atmospheric emissions by an average of 5.2 per cent over 2000 values by the commitment period of 2008-2012, is inadequate to provide effective relief against global warming, and should be renegotiated as soon as possible.
   • The Protocol should also establish principles of verification for the agreed emission targets. This must include: methods and techniques of data collection; the computational procedure; keeping statistical records; instruments for achieving the emission targets; and control mechanisms by international law concerning emissions and international standards and trade.
     
     
     
2. The establishment of guidelines and internationally standardised methods of evaluation for determining the external effects and total lifecycle costs and risks for all energy systems, taking into account the environmental, health and other damage caused by energy-related activities.
   The establishment of appropriate guidelines and internationally standardised methods of calculation will require a consideration of the following factors:
   • The identification of the limits of economic indicators and tools, ie, the principles for political action (market imperfections/failures, external effects, intergenerational equity, social rate of interest, collective goods, etc).
   • A framework to identify the external effects of the pollution caused by energy systems on the environment and human condition (eg, environmental consequences, socio-economic consequences).
   • The different economic methods used to evaluate these external effects.
   • The abatement/mitigation costs associated with the implementation of reduction measures on polluting activities in order to reach a target (for example, the reduction of C02 emissions) in case the damages are either unknown or non-quantifiable in monetary terms.
   • The elaboration of a risk premium insurance for not achieving targets due to errors in dose-response functions (modelling uncertainties, thresholds, synergetic effects, positive feedbacks, etc).
   • This principle involves further study into the following issues:
   • Identification of the lifecycle costs (including external costs) for every energy system in order to compare the total known/valuable costs: extraction, processing/refining, transportation, as well as waste disposal and decommissioning activities.
   • Identification of the lifecycle costs that may not be properly valued in monetary terms (climate change, nuclear weapon proliferation, major nuclear accidents, irreversible biodiversity losses, health risks, etc).
   • Establishment of internationally standardised methods of calculation/ comparison.
     
     
     
3. The establishment of international, regional, national and local programs for energy efficiency improvements, safety controls, waste management and emissions reductions in the production, storage, transportation and consumption of all types of energy.
   Energy efficiency improvements and emissions reductions to be addressed should include not only technical issues, but also the need to educate and train the public as to methods of improving energy efficiency, reducing stand-by losses, minimising emissions and as to necessary behavioural changes. A comprehensive approach should be adopted. This means that all available techniques are used simultaneously.

   The specific plans for energy efficiency improvements and emissions reductions should include the following. In many cases, national legislation will be required to implement them:

   • A comprehensive International Convention on Rational Use of Energy.
   • The creation of an international body dealing with energy efficiency and conservation.
   • Harmonisation of actions carried out by various UN agencies (UNDP, UNEP, World Bank, etc).
   • The issue of energy efficiency should be a consideration for all loans by international donors.
   • Energy audits should be conducted in all energy consuming sectors of the national economy.
   • Energy conservation techniques should be taught in secondary schools.
   • Low-interest loans for energy conservation measures should be available.
   • Energy conservation should be an important feature in all national energy planning.
   • Energy conservation should be encouraged to the maximum extent practicable.
   • Minimum efficiency or performance standards for various types of industrial plant (such as motor drives and boiler and process heating applications) are required.
   • Financial incentives should be given to encourage industry to adopt energy conservation measures.
   • The energy efficiency of car engines and the associated fuel consumption figures must be significantly improved.
   • Road laws designed to conserve energy must be introduced. These include the legal recognition of car pooling; parking taxes; the coordination of traffic flows; the prohibition of cars into designated downtown areas of cities; and various fiscal incentives and penalties, such as a "gas-guzzler" tax and motor registrations fee reductions for fuel efficient cars.
   • Public transport should be encouraged by new laws (for example, the provision of special bus lanes and financial subsidies).
   • All clean transportation fuels should be encouraged. These include ethanol, compressed natural gas and hydrogen.
   • Cities should be designed so as to reduce travel distances between home and work and to make public transport economically viable.
   • Energy performance standards for all types of buildings should be prescribed for all newly-constructed buildings.
   • All possible means of increasing the efficiency of existing buildings should be explored.
   • Energy conservation measures in respect of buildings should be applied to rented as well as owner-occupied buildings.
   • Efficiency standards should be prescribed in respect of designated domestic appliances.
   • A system of labelling with respect to the average energy consumption of each domestic appliance should be established.
   • Governments at all levels should ensure that they procure efficient products and buildings.
     
     
     
4. The creation of international, regional, national and local programs for the substitution of non-renewable energy sources by environmentally benign sustainable energy technologies.
   Renewable energy sources are now competing effectively with fossil and nuclear resources in many applications. If environmental externality costs are considered, including conventional air pollutants and C02 emissions, the economic attractiveness of renewable energy sources is further enhanced. In addition, as technologies continue to advance, renewable energy will become more economic in an increasing number of applications. Among the most promising renewable energy options considered here are: biomass energy, lowhead/cascading hydropower; wind power; geothermal energy; passive solar and other thermal heating; solar thermal power generation; and solar photovoltaic power. These renewable energy sources are an essential and economic component of any large-scale effort to reduce C02 emissions, and are ideally suited for the introduction of decentralised energy systems.
   

   The key to realising the potential of renewable energy is the formation of effective international, national, state, and local programs to encourage their commercial development and implementation. First, spending on renewable energy and energy storage R&D must be substantially increased so as to enhance the commercial availability of renewables. Secondly, environmental externality costs need to be incorporated in energy cost accounting, either via energy/C02 taxes or via laws or utility regulations that implicitly incorporate environmental costs in new plant selection. Thirdly, electricity and gas grids should be opened to renewable energy suppliers on a competitive basis, at a cost that recognises the environmental externalities associated with fossil fuels.

   A concerted international effort is needed to ensure that the developing countries realise the economic and environmental benefits that can be achieved with the rapidly evolving renewable energy technologies. Renewable energy industries can provide the foundation for equitable and sustainable economic development, particularly in rural areas where renewables are essential to help people meet their basic needs. Additional financial resources are needed to transfer the technology and infrastructure capability the developing countries need to accelerate the use of the many renewable energy technologies that are ideally suited to the technological capabilities and labour availability in developing nations. Some of the resources can be made available via re-channelling of World Bank energy loans, and the rest can be raised via an international energy/CO2 tax.
   
   
   

5. 5. Based on guidelines established under principle 2, the provision of a system of full-cost to reflect accurately the total life-cycle social and environmental costs of energy production and consumption.
   All countries should institute a more realistic cost structure, in order to reach a maximum cost pricing of energy cycles, gradually eliminating all energy subsidies and trade barriers. The known or estimated costs to society of pollution from all energy resources should be internalised through internationally applied revenue- neutral pollution taxes where possible (offset by reductions in other taxes). The form of tax could be a value added tax. Taxes should be fixed at a level that ensures that the effects of the environmental costs of energy are reflected through the life-cycle of the resource.
   
   
   
6. The establishment by the United Nations of a sustainable energy fund to finance the use of energy efficiency improvements and the best available environmentally sound energy technologies, with special allocations set aside for developing countries.
   The proposed fund should be established on the following bases:
   • The fund should be a new facility independent of existing development funding mechanisms.
   • The objective of the fund should be to ensure that finance is available at an affordable cost at the point of need by industry, communities or individuals in developing countries as a part of the global and national strategies to introduce new energy technologies for sustainable and equitable development.
   • The fund should be used for the following purposes: to assist developing countries to establish integrated national energy plans; to pay for prototype and demonstration plants; to finance the difference of investment costs between conventional (polluting) and new clean(er) energy plants, which will be more capital intensive; to provide a part of the investment capital for setting up manufacturing facilities in developing countries and assist manufacturers in developing countries to participate in joint venture networks; to provide a risk net for entrepreneurs who start the commercialisation of new clean energy technologies; to provide finances for promoting the sale of equipment through loans and grants, eg, for leasing by consumers; and to support the build up of infrastructure and training facilities, centres of expertise for test and certification, information dissemination, etc.
   • The composite initial size of the fund should be at a multi-billion (US) level.
   • The source of the fund should be taxes on the use of fossil fuels and electricity in all countries and/or pollution levies, money liberated as part of the international demilitarisation programs and money made available through cuts in subsidies to existing unsustainable energy systems.
   • The fund should be administered by competent banking organisations under the control of an executive board of management with the majority of members from developing countries, answerable to an international body representing the donor and recipient countries. The funds may also be managed by energy corporations under the tight control of an independent supervisory body.
   • There are various alternatives for the administrative agency, such as: (i) the World Bank, which would bring the fund within the framework of present development policies; or (ii) a purely banking organisation like the Bank of International Settlements, Basel; or (iii) a new bank run by a consortium of private and public sector banks from the industrialised and developing countries. A detailed examination of the advantages and disadvantages of these alternatives is required.
     
     
     
7. The promotion and monitoring of the principles and implementation strategies under the Global Energy Charter for Sustainable Energy Development and the development of new financial instruments and investment mechanisms, involving both the private and public sectors.
   
   
   1. Performance monitoring
      
      Performance monitoring is considered vital for the Global Energy Charter for Sustainable Energy Development to achieve long term success. The key issues are:
      • Internationally agreed guidelines should be defined allowing a standardised integral quantification of the environmental and economic performance related to energy use (refer to revised energy calculation standards of the IEA).
      • Performance reporting is required on an annual basis. The data should become unrestricted public domain and presented as an “Ecology index” in a uniform and fully transparent way.
      • To better substantiate current performance under the principles of the Global Energy Charter, historic energy use and related quality information should be standardised.
      • Though initial participation in the Global Energy Charter is voluntary, commitment to its principles should be treated as a compulsory national goal, eg of the Ministry of Environment, Energy and/or Foreign Affairs. Continuation of the principles must be guaranteed independent of government and policy changes, as in the case of human rights principles.
      • A bonus/malus system affecting the “Ecology index” must be established to validate economic and technology-based partnership between developed and developing nations (eg emissions trading, financial aid for sustainable projects abroad, etc).
        
        
   2. Financing
      
      Alternative financing schemes designed to achieve optimum benefit to society need to become common practice. In principles, there is a need for:
      
      • The adoption of life-cycle costing as a standard economic tool for decision-making based on avoided costs to society. Performance, quality and risk assessment is necessary in addition to the inclusion of external costs (see principle 2 of the Global Energy Charter).
      • The introduction of new banking policies favouring efficient, non-polluting technologies. This may cover issues such as dynamic discount rates that are individually designed for customer needs (eg an initially digressive rate that later turns into a progressive rate). Options of low-cost utility-like financing, billing and promotion services should also be considered.
      • Initiation of investment schemes with government back-up applicable to projects optimised for life-cycle costs (refer to government risk capital guarantee for foreign investment, and equity or infrastructure bonds). Preference should be given to small- and medium-scale projects which support decentralisation and the development of rural areas, and which feature comparatively short project lead-times.
      • The introduction of “community service obligations” between government and utilities designed to ensure financing for enhanced research, development and demonstration of renewable energy technologies, at levels equivalent to historic funding for fossil and nuclear technologies. Since governments are ultimately responsible for the welfare of society, renewable energy RD&D should be part of their portfolio. Performance-linked tax incentives and subsidies should be introduced to foster renewable energy utilisation. Furthermore, governments should regulate access to the electricity grids to increase community interest and decentralisation of power supply.
      • International aid funds as offered by the World Bank, the United Nations, etc should evaluate new eligibility schemes, giving preference to the “Ecology index” and community support.
        
        
        
8. The promotion of worldwide cooperation and exchange of technology, expertise, education, training programs, information and statistics on the best available environmentally sound energy technologies, energy efficiency, performance standards, safety codes, methods of energy costing and means of internalising external costs.
   The following action should be undertaken in order to implement this principle:
   
   
   1. Promotion
      • Establishment of promotion agencies, advisory councils, information centres, and expert groups, specialising in the different energy sources and technologies.
      • Construction of small and large demonstration facilities.
      • Organisation of conferences, meetings, seminars, trade fairs, expositions and other public events.
      • Proclamation of special days or years (eg, Solar Energy Year, Biosphere Day).
      • Granting of quarterly or yearly awards.
      • Setting of quantitative targets.
      • Compilation and publication of statistics.
      • Promotion of international harmonisation and standardisation in cooperation with ISO and IEC.
      • Implementation of international conventions, agreements and recommendations.
        
        
   2. Dissemination of Information
      Information should be disseminated through computerised public data banks and information systems, publications, films, posters, pamphlets, directories, compendiums, satellite broadcasting, creation of networks and others. The information should relate to the following:
      • National incentives, policies, programs and practices;
      • Sustainable energy equipment and technologies, suppliers, installers, consultants, prices, comparative performance, sources and terms of financing;
      • "Success stories";
      • Country situations (country profiles in comparable format).
        
        
   3. Education and training
      Education and training programs are required in respect of the following:
      • Educational programs for children;
      • Preparation and promotion of curricula for the study of clean energy technologies;
      • Information and training programs on Internet resources;
      • Preparation of a guide book on courses and other forms of training (eg fellowships) in the field of clean energy technologies;
      • Exchange of students and teachers;
      • Conducting special courses for teachers;
      • Organisation of lecture series for adults;
      • Organisation of television programs/open universities;
      • Special short courses, seminars and workshops for decision makers;
      • Competitions to demonstrate clean energy technologies (eg zero-pollution automobile rallies: Ecotouring World Grand Prix);
      • Excursions to clean energy installations;
      • Entertaining educational programs for all ages.
        
        
   4. Technology Transfer and Commercialisation
      The following action is required:
      • Establishment of the methodology for energy and environmental impact assessment as the basis for project selection;
      • Design of financing programs/packages for all facets of projects, including maintenance and servicing;
      • Establishment of public agencies for quality control and performance guaranties;
      • Promotion of programs which benefit from economies of scale and of manufacture;
      • Promotion of all forms of cooperative or joint ventures;
      • Facilitating of producer-user dialogue;
      • Encouraging utilities to foster clean energy technologies and to feed electricity/gas from clean(er) sources into the network;
      • Encouraging small and medium sized enterprises to engage in equipment manufacturing, trading, installation and maintenance;
      • Promotion of the use of local expertise, especially in developing countries;
      • Trade facilitation.
        

For comments, suggestions and enquiries about the Global Energy Charter for Sustainable Energy Development and the World Sustainable Energy Coalition, please contact the Central Secretariat of:

Cercle mondial du consensus, World Circle of the Consensus, Weltkreis des Konsens
World Sustainable Energy Coalition

CMDC-WSEC, rue de Varembé 3, POB 200, CH 1211 Geneva 20, Switzerland
Phone: +41-22-910-3006, Fax: +41-22-910-3014, e-mail: info@cmdc.net