environment

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By Paul Davies, Bridget Reineking, and Andrew Westgate

Since establishing the People’s Bank of China’s Green Finance Task Force in 2014, China has encouraged green financing mechanisms through a variety of pioneering initiatives. For example, the country has designated five green finance pilot zones, within which financial institutions are incentivised to provide credit and special funds for environmentally friendly industries.

However, investors have yet to take full advantage of these developments. The lack of uptake may in part relate to recommendations set out in the Green Task Force Final Report published in April 2015. In particular, recommendation 13 of the Report proposes imposing environmental lender liability on banks – the practical consequence of which is that banks and other financial institutions become liable for environmental pollution or damage caused by their borrowers. Although green projects are by nature less environmental risk-laden than other projects, they are not risk-free. As a result, investors have been hesitant to utilize the new financing mechanisms, and banks are equally hesitant to offer financing in the face of uncertain associated liabilities.

By Paul Davies, Bridget Reineking, and Andrew Westgate

President Xi has announced the creation of a new environmental bureau to oversee China’s state-owned natural resources. Establishment of the new bureau is one of the most notable outcomes of the recent meeting of the 19th National Congress of the Communist Party, and follows Xi’s pronouncement that building an “ecological civilization” in his country is necessary for the continued development of the Chinese people.

Currently, China’s natural resources are administered by a set of localized bureaus, which oversee natural resource assets without a centralized national monitor. Local governments are responsible for staffing and funding these bureaus, so economic agendas and industrial development have directed local environmental efforts for years. Frequently, local governments have stripped the protection bureaus of the ability to impose penalties or otherwise enforce environmental compliance measures. And even if the bureaus receive staff and funding, regional and local needs are generally at odds, often causing untimely and frustrating backlogs regarding the uses of resources and land. Without national coordination, even the best-intentioned regulators working for these bureaus have struggled to implement environmental policies.

By Paul Davies and Michael Green

In August 2015, the French government amended the French Energy Transition Law to include provisions rendering “planned obsolescence” a misdemeanour. In the latest wording of the provisions, article L.441-2 of the Consumer Protection Code (Code de la consommation) defines planned obsolescence as “… resorting to techniques whereby the entity responsible for the placement of a product on the market deliberately intends to shorten [that product’s] life span in order to increase its rate of replacement”. Interestingly, this is the French government’s second attempt to define planned obsolescence since introducing the provision two years ago.

Violation of the prohibition on planned obsolescence carries a potential two-year prison sentence and a criminal fine of up to €300,000. As an added deterrent, the law further provides that the courts may increase the fine to up to 5% of the annual turnover of the entity concerned (based on the average of the entity’s turnover in the three years prior to the date of the offence). The courts will therefore have the option of increasing a fine, provided the fine is proportionate to the infringing party’s gain (see Consumer Protection Code, art. L.454-6).

By Paul Davies, Bridget Rose Reineking, and Andrew Westgate

In recent months, teams of inspectors from China’s Ministry of Environmental Protection and the Communist Party’s anti-corruption commission have conducted a slew of surprise inspections of various industrial facilities throughout China. Estimates suggest that China has temporarily closed as many as 40% of the country’s factories at some point in the last year — sometimes for weeks at a time. The recent crackdown is the fourth in a series of region-wide inspections that began in July 2016, which together amount to some of the most dedicated and comprehensive efforts to enforce environmental compliance in the country’s history.

China’s somewhat urgent enforcement of environmental laws appears — at least in part — motivated by China’s 2013 pledge to reduce emissions from heavily polluting industries by 30% before the end of 2017. Earlier this month, the country ramped up environmental pledges at the 19th National Congress of the Communist Party, announcing an ambitious plan to reduce the concentration of hazardous fine particulate matter (PM2.5) from 47 micrograms in 2016, to 35 in 2035, reported Xinhua, the China’s official press agency.

By Paul Davies, Bridget Rose Reineking and Andrew Westgate

At the 19th National Congress of the Chinese Communist Party, President Xi Jinping asserted his country’s emerging leadership in environmental stewardship and pledged to build a “beautiful China”. In his speech to the 2,300 delegates and guests assembled for the Congress’s opening session, President Xi lauded China’s burgeoning role as a global marshal of environmental reform.

Xi’s speech follows major efforts to reduce energy consumption and conserve resources across China — such as green finance initiatives facilitating lending to firms in environmentally friendly sectors; programmes for the development of alternative energy sources; and efforts to strengthen and enforce environmental laws and regulations. President Xi pointed to these efforts and proclaimed that China’s pursuit of sustainable development is both paying off domestically, and setting an example globally. 

By Paul Davies and Andrew Westgate

On 18 October 2017, the 19th National Congress of the Chinese Communist Party will convene, after the week-long National Day holiday, marking one of the most important dates on the Chinese political calendar. Among the issues that National Congress members will surely discuss, is the importance of implementing strategies to further China’s green development. A crucial aspect of this discussion will be determining how funding can be channelled towards clean development.

China has achieved unprecedented economic growth over the last four decades, and is predicted to become the world’s largest economy before 2030, overtaking the United States. A by-product of this success however, has been severe damage to China’s ecology and environment, which the country is already taking action to address.

By Paul Davies and Michael Green

A new European Parliament briefing highlights the benefits of, and difficulties associated with, transitioning the chemicals industry to a circular economy.

The traditional economy typically involves purchasing and using a product, and then disposing that product when it no longer has utility (i.e. the “take-make-dispose” approach to resources). Conversely, a circular economy seeks to extend the life cycle of products by aiming to both extract and retain the maximum value of their component materials.

A greater emphasis on product re-use and mechanical recycling in the chemicals industry requires developing new solutions and manufacturing products intentionally designed for re-use. This presents a growth opportunity and a new source of competitiveness for European operators compared with raw material-rich regions, whilst providing the more obvious benefits of preserving increasingly scarce resources and injecting renewed value into waste products.

By Jörn Kassow and Eun Kyung Lee

Germany’s increasing shortage of natural resources and the corresponding mounting cost of extracting raw materials signals the need for alternative and innovative ways of collecting and recycling secondary raw materials.

One promising method of securing potential secondary raw materials is “urban mining”, which aims primarily at reclaiming raw materials in urban areas through the reuse of the materials and resources contained in disused products and buildings. Countries with a high demand for resources, but with limited natural resources of their own, can potentially benefit from urban mining.

The German Federal Environment Agency (Umweltbundesamt) recently published a comprehensive briefing titled “Urban Mining”. The briefing highlights the fact that while Germany is a large consumer of raw materials, it is also heavily dependent on imports of major industrial materials, a situation that generates economic and/or political dependencies, strong price fluctuations, and questionable environmental and social standards (such as inhumane mining conditions).

By Paul Davies and Michael Green

The first solar farm has successfully launched in the UK without government subsidisation. Clayhill Solar Farm, a 10 megawatt (MW) site near Flitwick in Bedfordshire, is capable of generating enough power for 2500 homes. Clayhill’s developer, Anesco, is a private company specialising in the design and development of solar and battery storage sites.

Renewable energy projects like Clayhill have become increasingly viable in recent years due to the falling cost of solar panels and batteries. In particular, cheaper manufacturing costs have enabled solar generation to become cost-competitive with electricity from fossil fuels. However, despite these favorable conditions, the Renewables Obligation subsidy scheme — one of the UK government’s main mechanisms for encouraging renewable electricity projects — closed to new applicants in March 2017.

By Paul Davies and Michael Green

Six Portuguese children are raising funds to sue 47 European countries, asserting that their right to life has been threatened because governments have allegedly failed to adequately deal with climate change.

With the support of lawyers from the Global Legal Action Network (GLAN), the children will ask nations in the suit to strengthen their emissions reduction policies, and to commit to keeping the majority of their existing fossil fuel reserves “in the ground”. The 47 countries targeted by the legal action are collectively responsible for approximately 15% of global greenhouse gas emissions, and include Europe’s “major emitters”, such as Germany, France, and the United Kingdom.

The children, who are between 5 and 14 years old, claim to have been directly affected by Portugal’s worst-ever forest fires in Leirria this summer, which resulted in more than 60 fatalities. Climate change is thought to have exacerbated the Iberian Peninsula’s extreme heatwave that extended the wildfire season from two months (July and August) to five months (June to October).