Download Energy and climate change in the Mediterranean Region

28 October 2016
Draft report
on energy and climate change in
the Mediterranean region
Challenges and action at local and regional level
This document was drawn up by the rapporteur Mohamed Sadiki, Mayor of Rabat (Kingdom of
Morocco), in conjunction with the European Committee of the Regions' ENVE commission, and
revised in preparation for a debate during the second meeting of the ARLEM Commission on
Sustainable Territorial Development which will be held in Marrakesh (Morocco) on 15 November
2016, and its adoption at the 8th ARLEM plenary session to be held in Malta in February 2017.
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EN
Executive summary
Political and economic stabilisation in the Mediterranean region is a key priority for the Union for the
Mediterranean, the European Union and the Euro-Mediterranean Regional and Local Assembly
(ARLEM). Improved harnessing of the economic, human and natural potential of the Mediterranean
region may in the long term guarantee lasting peace and prosperity in the area. However, climate
change multiplies the threats to the stability and security of the region, which is one of the most
vulnerable in terms of the impact of climate change.
Energy lies at the heart of this issue – indeed, almost three quarters of greenhouse gas (GHG)
emissions in the Mediterranean are due to CO2 emissions resulting from energy consumption. It must
be acknowledged that energy is the economic sector in which interdependence between EuroMediterranean countries is the most strategically important and where there is the most potential for
cooperation between countries in the region. Energy transition and managing the impact of climate
change are common challenges that emphasise the complementary nature of the two shores of the
Mediterranean.
Initiatives such as the Covenant of Mayors, the Memorandum of Understanding on Subnational Global
Climate Leadership (Under 2 MOU) or the Compact of States and Regions to name just a few,
highlight local and regional political will to tackle climate change and raise national and international
targets.
Through these initiatives, local and regional authorities have shown the extent of their contribution to
the fight against climate change and have earned credibility as essential partners in the UNFCCC
discussions1.
ARLEM members stress that the countries of the Southern and Eastern Mediterranean (SEMC) and
the Member States of the European Union have the same objective: to guarantee a secure, sustainable
energy supply at affordable prices. These reciprocal strategic interests underpin the EU’s energy
policy in the Mediterranean, which aims to harmonise energy policies and regulatory frameworks in
the region and to establish an integrated and optimised regional energy market for Europe and the
Mediterranean countries.
Local and regional authorities, as the level closest to the general public and to their region, have a
crucial role to play in fostering behavioural change, and mobilising local communities and businesses
on climate and clean energy issues. Organising a second Climate Summit for Local and Regional
Leaders in Marrakesh on 14 November, during the COP 22, will bolster the development of regional
climate diplomacy which is willing to contribute to the work of the COP and speed up climate action.
ARLEM members accordingly recommend:
 stressing the need to integrate mitigation and adaptation measures for a balanced climate policy and
mainstreaming these measures into all policies;
 establishing the productive exchange of experience, information and best practices;
 carrying out technology transfer in the area of energy efficiency and renewable energy;
1
UN Framework Convention on Climate Change.
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 developing instruments and tools for financing, particularly for small and medium-sized projects
geared to local conditions;
 including regional action to tackle climate change in the Global Climate Action Agenda.
Preamble and background memo:
In 2016, ARLEM has focused on the following four priorities:
 the role of local and regional authorities in managing migration flows;
 stability and local governance;
 economic development and cross-border cooperation; and
 energy and climate policy.
As energy is at the heart of the issue of climate change, the members of ARLEM decided to draw up a
report on the subject of Energy and climate.
This report aims to assess the state of play in Euro-Mediterranean cooperation in this area.
The members of ARLEM and its partners wish to exchange the best practices of cities and regions and
to involve the EU and Mediterranean decision-makers in policy discussions, with a view to drawing up
recommendations on how we could best strengthen the implementation of sustainable energy projects
at local and regional level and thereby contribute to the achievement of ambitious CO2 emission
reduction targets in accordance with the EU's Energy Union guidelines and legislation and pursuant to
the international agreements reached at the UNFCCC COP 21 in Paris in 2015.
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1.
Strategic challenges for the Euro-Mediterranean region
Political and economic stabilisation in the Mediterranean region is a key priority for the Union for the
Mediterranean, the European Union and ARLEM. Improved harnessing of the economic, human and
natural potential of the Mediterranean Region may in the long term guarantee lasting peace and
prosperity in the area. However, climate change multiplies the threats to the stability and security of
2
the region, which is one of the most vulnerable in terms of the impact of climate change .
Energy lies at the heart of this issue – indeed, almost three quarters of greenhouse gas (GHG)
emissions in the Mediterranean are due to CO2 emissions resulting from energy consumption. It must
be acknowledged that energy is the economic sector in which interdependence between EuroMediterranean countries is the most strategically important and where there is the most potential for
cooperation between countries in the region. Energy transition and managing the impact of climate
change are common challenges that emphasise the complementary nature of the two shores of the
Mediterranean.
With regard to the practical implementation of far-reaching climate change mitigation commitments at
national level, the efforts made by Morocco should be highlighted: Morocco has been pursuing an
ambitious energy transition policy for almost a decade, aimed at developing a sustainable, competitive
and secure energy sector involving stakeholders from the public and private sectors, which have
launched a number of projects in the energy sector and are striving to integrate the Moroccan energy
market into the regional and Euro-Mediterranean energy systems. In 2009 Morocco, at the head of the
African continent, adopted an energy strategy with a view to diversifying its sources, growing local
renewable energy generation and promoting energy efficiency. It is also worth highlighting the
progress made by other countries in the region with regard to modernising their energy policy.
Moreover, it should be emphasised that EU Member States and European Commission delegations
around the world have mobilised to support non-EU countries in assessing and implementing climate
policies set out during the COP21 in Paris. Owing to its policy, which is implemented via EU
development programmes and assistance from Member States, the EU is also the biggest donor of
international climate financing.
There is potential in this regard to introduce or extend in the Euro-Mediterranean region - or inspire
countries there with - the European model of the Covenant of Mayors, which is currently being
implemented at global level. The Covenant of Mayors brings tangible, measurable results in terms of a
reduction in CO2 emissions. It promotes the exchange of best practices, knowledge and technical
2
Intergovernmental Panel on Climate Change (IPCC) experts expect that in the twenty-first century the Mediterranean region will
see:

an increase in air temperature of between 2.2°C and 5.1°C for countries in Southern Europe and the Mediterranean region over
the period 2080-2099 compared to the period 1980-1999.

a significant decrease in rainfall of between 4 and 27% for the countries of Southern Europe and the Mediterranean region
(while countries in Northern Europe will see an increase of between 0 and 16%).

rising sea levels which, according to some studies, could be approximately 35 cm by the end of the century.
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experience in areas such as renewable energy sources, energy efficiency, efficient public lighting and
many other areas for which local and regional authorities are responsible.
Membership of this initiative can help cities and regions increase their capacity to provide access to
sufficient, sustainable and safe energy-related services for urban and peri-urban populations, with
special attention paid to energy efficiency and renewable energy as drivers for local, low-emission,
climate-resilient, sustainable development. However, it can also increase their planning capacities for
urban design, mobility and energy as well as helping to mobilise the necessary investment and
resources.
Initiatives such as the Covenant of Mayors, the Under 2 MOU or the Compact of States and Regions
to name just a few, highlight local and regional political will to tackle climate change and raise
national and international targets. Local and regional authorities in the SEMC are themselves part of
these various initiatives that will feed into the portal of the Global Climate Action Agenda, which is
aimed at regions, businesses and civil society and replaces the Lima-Paris Action Agenda. Through
these initiatives, local and regional authorities have shown the extent of their contribution to the fight
against climate change and have earned credibility as essential partners in the UNFCCC discussions.
2.
For a balanced climate policy in the Mediterranean region
By signing the global climate agreement adopted in December 2015 at the COP21 in Paris, the
196 parties from the international community acknowledged the threat posed by climate change, not
only to our environment but also to our economies and societies. This agreement aims to limit average
global warming to well below 2°C compared to pre-industrial levels by the end of the century. All
parties to the Convention have voluntarily committed to contribute to this overall objective. Now that
the global climate agreement has been adopted and will enter into force on 4 November, just before
the start of COP22, the priority is to make the commitments made in Paris a reality.
Mitigation measures to reduce greenhouse gas emissions are of the utmost importance. However, the
SEMC are already suffering the effects of climate change, with an increase in erosion, a decrease in
precipitation and increases in the frequency and intensity of droughts. These effects, combined with
the pressure of tourism, water scarcity and rapid urbanisation, make SEMC economies very vulnerable
to climate change – to which they should be more resilient. Mitigation and adaptation measures are
complementary in formulating a comprehensive climate policy. The challenge will be to structure this
policy and create synergies between the different measures3.
If climate policy is to be successful and become a genuine geo-strategic issue, another important
challenge to address will be to ensure that climate change is no longer a separate policy strand, but
rather mainstreamed into all policies across all sectors and budgets. The challenge ahead will be to
coordinate these policies. Countries in the Mediterranean basin are at different stages with regard to
this coordination. This makes regional dialogue as well as the setting up of a robust Mediterranean
3
For instance, green infrastructures are referred to as low-cost and low-regret measures and can both act as carbon sinks and protect
urban environments from heatwaves. Air conditioning, on the other hand, although it may help populations adapt to the effects of a
heatwave, will lead to increased greenhouse gas emissions and worsen the impact of climate change, creating more adaptation
needs.
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climate cooperation framework all the more essential in order to exchange best practices and spread
information on technical and financial assistance.
With a view to addressing these challenges, a dialogue between all stakeholders could contribute to
developing policies on climate change that guarantee cost-effectiveness and a good balance between
mitigation and adaptation measures. When formulating their Nationally Determined Contributions
(NDCs), several SEMC – Algeria, Egypt, Morocco and Tunisia – carried out extensive stakeholder
consultations, ensuring coherent proposals and including them in wider policy action on sustainable
development, as well as in other international processes such as the Sustainable Development Goals
(climate, cities and energy to name a few) and HABITAT III (resilience and adaptation).
3.
Energy policy
The primary energy demand in the Mediterranean basin is likely to multiply by 1.5 between 2006 and
2025 and by 2.2 in the fast-developing SEMC whose population is growing at a remarkable rate4. The
recent, relatively rapid rise in energy demand across the SEMC is characterised by a particularly
dynamic rise in demand for electricity, faster than population growth or the growth in demand for
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primary energy. Demand for electricity is expected to multiply by 2.6 between 2006 and 2025 .
On the supply side, solar and wind energy continue to account for less than 1% of the region's
electricity generation mix, a figure very much at variance with the region's abundant solar and wind
resources. In fact, SEMC have huge solar and wind energy potential. Tapping this potential could
bring a range of benefits to the region, such as meeting the rising energy/electricity demand at a lower
cost, freeing up additional export volumes of oil and gas in energy exporting countries, reducing
energy bills in energy importing countries, creating new jobs, alleviating energy poverty, enhancing
the quality of the environment and enhancing cooperation both among SEMC and between SEMC and
the EU.
The following key energy-related structural problems have been identified in the SEMC:
 subsidising energy prices is not only costly for public budgets, it is also a significant barrier to
growth. It hinders public spending on infrastructure, education and health, which stimulate growth.
It does not promote rational energy usage and does not enable good decisions to be made over
which energy to use;
 a lack of momentum in investment in renewable energy means that traditional energy sources
cannot yet be freed up in order to be exported to Europe, in response to the huge potential offered
by this market;
 with regard to investment in energy efficiency, it is not only necessary to consider financial needs,
but also the need for public authorities and market players to firstly develop solid project
development and management capacities, particularly with regard to financial models which
translate technical opportunities into viable economic activities;
4
5
2008 EIB study on climate change and energy in the Mediterranean.
Across a range of development scenarios, the population of the SEMC region is projected to increase from 280 million in 2010 to
396-425 million in 2050, with most growth taking place before 2030.
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 in order to establish effective mechanisms for reducing CO2 emissions, the SEMC need reforms
and to facilitate public-private partnerships.
ARLEM members stress that the SEMC and the EU Member States have the same objective: to
guarantee a secure, sustainable energy supply at affordable prices. These reciprocal strategic interests
underpin the EU’s energy policy in the Mediterranean, which aims to harmonise energy policies and
regulatory frameworks in the region and to establish an integrated and optimised regional energy
market for Europe and the Mediterranean countries.
Given the ambitious objectives in this area, one of the sources of support for investment is the
European Investment Bank (EIB), which is committed to providing the SEMC with the necessary
financing opportunities as well as technical support. It is also mobilising public as well as private
financing and working with other multilateral development banks and organisations such as the
ERBD6 and ADEME7. This support covers both adaptation and mitigation, including projects geared
towards sustainable energy generation and a more cost-effective, efficient use of energy.
In view of the growing need for investment, it is worth noting the potential for combining the various
financial tools available on the market and emphasising better complementarity between the activities
carried out by the various international financial organisations. In particular, in relation to the SEMC
and their cooperation with the EU in the field of energy, the EBRD could offer risk mitigation and
credit enhancement tools that would cover the country risk faced by international energy companies
and institutional investors. This risk might change over time, as the political situation in a country
evolves. Reducing the risk can enable the country to attract more investment because of lower interest
rates, in effect providing an investment insurance mechanism, while international energy companies
and institutional investors would take on the commercial risk, to ensure the commercial viability of the
projects proposed.
4.
The role of local and regional authorities and the potential of the Covenant of Mayors
Local and regional authorities, as the level closest to the general public and to their region, have a
crucial role to play in fostering behavioural change, and mobilising local communities and businesses
on climate and clean energy issues. Organising a second Climate Summit for Local and Regional
Leaders in Marrakesh on 14 November, during the COP 22, will bolster the development of regional
climate diplomacy which is willing to contribute to the work of the COP and speed up climate action.
With this in mind, it is worth noting that in its 2011 report on Promotion of renewable energies: a
factor for economic and social co-development in the Mediterranean region8, ARLEM already saw
the Covenant of Mayors as a possible model for collective action on renewable energy and energy
efficiency in the Euro-Mediterranean region, which could prove to be a key tool in their development.
The members of ARLEM wish to exchange the best practices of cities and regions and to involve the
6
7
8
European Bank for Reconstruction and Development.
The French Agency for Development, the Environment and Energy Management.
ARLEM report on Promotion of renewable energies: a factor for economic and social co-development in the Mediterranean region
(adopted in January 2012): http://cor.europa.eu/fr/activities/arlem/Pages/sudev.aspx
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EU and Mediterranean decision-makers in joint policy discussions, with a view to drawing up
recommendations on how we could best strengthen the implementation of sustainable energy and
climate change projects at local and regional level and thereby contribute to the achievement of
ambitious CO2 emission reduction targets in accordance with the EU's Energy Union guidelines and
legislation and pursuant to the international agreements reached at the COP 21 in Paris in 2015.
The Covenant of Mayors – signed by almost 200 cities and regions where members of the European
Committee of the Regions (CoR) hold office – is a particularly good example of the contribution that
local authorities make to the implementation of policies on sustainable energy and climate change.
Moreover, folding adaptation into the remit of the Covenant of Mayors makes it an even more suitable
tool for reaching climate goals at all levels.
ARLEM members, representing local and regional authorities in the SEMC, along with cities and
regions from around the world, are ready to take responsibility for climate change mitigation and
adaptation, working together at national and international level to gather feedback on the ground and
to contribute to the formulation of cost-effective goals, strategies and support measures by higher
levels of government.
At local level, active involvement of the SEMC municipalities in EU-supported initiatives such as the
Sustainable Urban Demonstration Projects and the Cleaner Energy Saving Mediterranean Cities
Project (CES-MED) – carried out under the European Neighbourhood Policy – has contributed to
enhancing the capacity of local authorities to develop local action plans for sustainable development,
including sustainable energy action plans. This is consequently a good basis for increasing the number
of municipalities in the SEMC signing up to the Covenant of Mayors.
5.
Recommendations
ARLEM
To address the challenges of climate change:
 wishes to suggest to the cities of Morocco, which is hosting the current round of United Nations
climate change negotiations, that they inspire all local authorities in the Mediterranean region to
commit to introducing programmes to reduce greenhouse gas emissions and to adapt to the harmful
effects of climate change, taking into account each country's own national policy framework. It
goes without saying that the European members of the ARLEM network from the Committee of
the Regions, drawing on the technical expertise provided by the European Commission, are willing
to share their experience and know-how with our Moroccan partners regarding best practices, the
political context and the factors that should be taken into account when drawing up a sustainable
energy programme at local and regional level;
 stresses the need to integrate mitigation and adaptation measures for a balanced climate policy.
These measures must also be mainstreamed into all policies in order to avoid the silo effect and to
allow many other areas to benefit, including the social and health sectors;
 calls on the SEMC to establish sustainable climate projects (for example on energy, transport,
resilience, forests, biodiversity and water) that are viable and bankable, enabling them to attract
public and private funding. In relation to this, it should be noted that cities and regions in the
Mediterranean have shown considerable potential to mobilise on climate issues and to contribute
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
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their data and objectives to the Global Climate Action Agenda, in order to transparently
demonstrate their involvement to the highest levels of government;
calls on all the EU’s Southern and Eastern Mediterranean partner countries to support integration
and partnership, dispute settlement, data sharing, analysis and engagement with key stakeholders in
a dynamic and informal setting bringing together energy companies, industry specialists,
academics, security experts and financial sector representatives;
calls on the banking sector to work with the SEMC to identify their needs in terms of financing
tools. International (and not just public) funding is essential for ensuring that the SEMC meet and
exceed their COP21 commitments. Initiatives and dialogue platforms, such as the Covenant of
Mayors and ARLEM, along with institutions such as the EIB and the European Commission – with
the help of the CoR – are well placed to brief their partners in the SEMC on the various
opportunities available for investment, financing and technical assistance;
supports the call by the Mediterranean countries to establish a single voice for the Mediterranean
on climate issues. This approach could promote the regional climate governance driven by regions
and large cities seeking to establish greater vertical coordination between all levels of government.
Such an approach would ensure that all regions, small towns and rural areas are mobilised on
climate issues. It would enable the pooling of resources to ensure consistent policies;
recommends setting up an interregional platform for inclusive climate governance, as advocated by
the Tangier Declaration and the MEDCOP2 Charter of Regions adopted last June. Good
governance mechanisms will maximise the potential of regions and cities to mitigate and adapt to
the effects of climate change;
calls for EU countries to participate even more actively in the strands of the Paris agreement that
support the SEMC (financing, green funds, capacity building and technology transfer), above and
beyond Neighbourhood Policy.
In the area of energy policy:
with the aim of boosting the energy sector across the Mediterranean region, suggests that the EU
consider a new bilateral energy policy in the region, and focus on supporting the development of
renewable energy and energy efficiency in Southern Mediterranean countries. The EU could help
establish bilateral economic relations between countries rather than continuing political
negotiations between whole regions;
recommends that the European Commission provide practical follow-up to the conclusions on
energy diplomacy issued by the Council of the European Union in July 2015, which stressed that
the EU’s foreign policy should also promote safe, sustainable, low-carbon energy technologies that
contribute to reducing greenhouse gas emissions, particularly technologies in the field of renewable
energy and energy efficiency;
suggests in particular stepping up the EU’s support for the transition to sustainable energy in the
SEMC, by treating it as a geo-strategic issue. Furthermore, the SEMC could be a springboard to
engaging in other parts of Africa, where there is also a growing need for reliable and clean energy;
believes that the EBRD – considering its experience in transition countries and its reputation – is
undoubtedly the best-placed institution to promote a new initiative to set up "Sustainable Energy
Funds" with selected SEM countries. This would involve the creation of public-private partnerships
between the government of the selected country, international energy companies operating in the
country and institutional investors willing to make a long-term investment. This would encourage
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investors to get into the sustainable energy sector in the southern Mediterranean, as a proper riskadjusted return would be guaranteed;
 recommends building close synergies between the new financial approach, potential financing
arrangements with the EBRD and the following instruments which are already in place:
 Facility for Euro-Mediterranean Investment and Partnership (FEMIP);
 European Fund for Strategic Investments (EFSI);
 European Investment Bank (EIB);
 Connecting Europe Facility (CEF);
 Green Climate Fund.
Overall, these financing mechanisms could reach hundreds of millions to several billion euros in
loans and guarantees for major energy investment projects across the Euro-Mediterranean region.
Such funding should also be channelled towards small and medium-sized projects geared to local
conditions;
 calls for the establishment of an integrated, optimised regional energy market;
 recommends support for capacity-building (human, governance and the legislative and regulatory
framework).
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