Input Paper „Georgia and European Green Deal“

Foto: Shut­ter­stock, artteam

Im Rahmen unseres Pro­jek­tes „Öst­li­che Part­ner­schaft Plus“ ver­öf­fent­li­chen wir eine zweite Reihe von Input Papers zum Thema Perspek­tiven und Prio­ri­täten des  European Green Deals (EGD) in der Ukraine, Geor­gien und Moldau. Die Autoren aus der Region (Nataliya Andru­se­vych, Manana Kochladze, Iuliana Cant­aragiu) ana­ly­sie­ren die Rolle der Euro­päi­schen Union bei der Unter­stüt­zung der Umsetzung des EGDs und for­mu­lie­ren ihre Hand­lungs­emp­feh­lun­gen an die Ent­schei­dungs­trä­ger in Berlin und Brüssel.

By Manana Kochladze, Demo­cra­tiz­a­tion and Human Rights, CEE Bankwatch Network

The European Green Deal (EGD) will funda­ment­ally change economic and political relations with the EU’s neigh­bour­hood. The Government of Georgia has not made yet any commit­ments with regard to the EGD.[1][2] The government’s approach to the country’s economic deve­lo­p­ment primarily involved extensive libe­ra­liz­a­tion and dere­gu­la­tion for decades. This changed only with the signature of the EU-Georgia Asso­cia­tion Agreement (AA) in 2014. Since then, Georgia has taken a few positive steps in the envi­ron­mental, energy and climate sector, but envi­ron­mental protec­tion and climate resi­li­ence are still consi­dered to be of secondary priority; economic growth takes top priority.

The current path of economic deve­lo­p­ment and its impact on health and the envi­ron­ment are chal­len­ging. The Global Alliance on Health and Pollution has reported that at least 140 out of every 100,000 deaths in Georgia are linked to air pollution, one of the highest rates in Europe.[3] World Bank estimates that the costs of envi­ron­mental degra­dation (air pollution, lead exposure, forests, agri­cul­ture land degra­dation, climate change impacts) were equi­va­lent to 15% of Georgia’s GDP in 2018.

Article 29 of Georgia’s Consti­tu­tion requires the government to ensure the protec­tion of the envi­ron­mental protec­tion and rational use of natural resources in the interests of current and future genera­tions. The Law on Envi­ron­mental Protec­tion provides for an envi­ron­mental planning system to ensure “condi­tions appro­priate for the sustainable deve­lo­p­ment of the country”. The law requires the deve­lo­p­ment of a sustainable deve­lo­p­ment strategy for the country. This requi­re­ment has yet to be met, as have those for a five-year national envi­ron­mental action plan and plans and policy documents for indi­vi­dual areas. The social-economic deve­lo­p­ment strategy “Georgia 2020” (2014)[4] acknow­ledges inef­fi­cient use of natural resources and extensive agri­cul­tural produc­tion, combined with low tech­no­lo­gical deve­lo­p­ment and inno­va­tion level. In 2015, government adopted the a national strategy to meet SDGs by 2030.[5]

The Asso­cia­tion Agreement between EU and Georgia and the Asso­cia­tion Agendas have fuelled numerous positive changes. The first step was enactment of a new Envi­ron­mental Assess­ment Code in line with the nEIA and SEA direc­tives (2018), addres­sing multiple failures in envi­ron­mental decision-making on projects and policies during (2007–2017), and rein­tro­du­cing public parti­ci­pa­tion in decision making. Several other laws and policy documents have also been adopted, including the Waste Code and Waste Manage­ment Strategy 0216–2030, the Forest Code (2020), envi­ron­mental liability legis­la­tion (2021), etc. The Third National Envi­ron­mental Action Program of Georgia (NEAP‑3) 2017–2021,[6] the key policy document in this area, was influ­enced by the EU-Georgia Asso­cia­tion Agreement and United Nations Sustainable Deve­lo­p­ment Goals. However, its imple­men­ta­tion is behind schedule both with respect to envi­ron­mental gover­nance and in key strategic sectors. This is due to inef­fec­tive gover­nance and insti­tu­tional model, inade­quate funding, only 0.4% of the state budget was allocated to envi­ron­mental protec­tion (around 60 million GEL). This was coupled with constant lobbying on behalf of the business sector to delay or abandon the new envi­ron­mental regu­la­tions. For instance, Georgia is behind schedule in in desi­gnated protected Emerald-network sites[7] under the Council of Europe’s Conven­tion on the Conser­va­tion of European Wildlife and Natural Habitats (Bern Conven­tion). The country needs to develop a national freshwater strategy due to abundant hydro­power deve­lo­p­ment plans.[8]

Georgia has been a full member of the European Energy Community since 2016. The adoption of the Law on Energy and Water Supply in line with the Third Energy Package (2019) was a breakthrough for further energy reforms. Renewable energy legis­la­tion was adopted in 2019 is in line with the EU’s 2009 rene­wa­bles directive. Legis­la­tion on energy effi­ci­ency adopted in 2020 twill enter into force after 2022. The trans­po­si­tion of the Large Combus­tion Plants Directive into Georgian law and the prepa­ra­tion of the Energy and Climate Action Plan (NECP) have been delayed. As the Clean Energy Package will be inte­grated into the Energy Community Treaty by the end of 2021, the ECT Secre­ta­riat has started to assist with the trans­po­si­tion and imple­men­ta­tion of energy reforms, including the Clean Energy Package.[9]

Georgia has no energy sector deve­lo­p­ment strategy or action plan for 2030 aimed at deco­u­pling energy use and economic growth. Unsus­tainable electri­city consump­tion and the country’s depen­dence on imported fossil fuels (70–75% of primary energy consump­tion) are not stressed in any strategy document. Sparsely available policy documents[10] promote increased energy consump­tion and the building of new genera­tion plants, including the large hydro­power plants that the vast majority of the public oppose. Meanwhile, cryp­to­cur­rency mining, which can be done at next to no cost thanks to low rates charged for electri­city, is nega­tively affecting both on the energy balance and on citizens’ lives in Abkhazia and Svanetia[11]. It is estimated that cryp­to­cur­rency accounts for at least 15% of Georgia’s total power load.[12] According to USAID, “Current and strategic decisions of the energy sector are not made on the basis of relevant and suffi­cient infor­ma­tion analysis and research. There is no proper system and proce­dures in place for providing expert research and profes­sional support for decision-making”.[13]

In April 2021, the Government of Georgia approved an updated natio­nally deter­mined contri­bu­tion (NDC)[14] under the UNFCCC and an imple­men­ta­tion tool for it. The NDC includes uncon­di­tional (35%) and condi­tional (50–57%) miti­ga­tion targets for the reduction of GHG emissions by 2030 compared to 1990 levels. It defines targets for a number of sectors (transport, construc­tion, energy genera­tion and trans­mis­sion, agri­cul­ture, industry, waste manage­ment and forestry). The National Adap­t­ation action plan will be elabo­rated with the support of the Green Climate Fund.

The transport sector repres­ents the biggest emitter and was respon­sible at least for 24% of GHG emissions (2015). The updated NDC predicts that emissions would rise up to 71% under the baseline scenario by 2030, with planned reduction of 15%. The country does not have “a single entity with respon­si­bi­lity for over­ar­ching national transport sector strategy and policy.”[15] This has resulted in the allo­ca­tion of a dispro­por­tio­nate amount to road infra­st­ruc­ture, with severe impacts on local commu­nities, reducing their incomes and forcing invol­un­tary resett­le­ment, and on the envi­ron­ment, including protected areas.

Despite promises to the contrary, no green economy policy, green economy strategy 2030 or green economy action plan for 2017–2022[16] were ever adopted. A technical report prepared for use in the deve­lo­p­ment of a green economy strategy that analysed three sectors of economy – construc­tion, agri­cul­ture and tourism – pointed out the potential for such a strategy to generate signi­fi­cant savings and addi­tional economic and envi­ron­mental benefits, including job creation.[17] Activity in this area is mainly supported by inter­na­tional donors, including the EU.[18]

The EGD has the potential to comple­tely eliminate the country’s reluc­tance to update existing economic models and to define new perspec­tives for Georgia’s deve­lo­p­ment. This would require the relevant guidance and skills support coupled with extensive awareness raising, trans­pa­rency and public invol­ve­ment in decision making to build the ownership and ensure a results-oriented approach. Georgia is expe­ri­en­cing stagna­tion in the deve­lo­p­ment of democracy and its economy [19] due to a political crisis[20] combined with Covid-19 pandemic. In this situation, EGD could provide a much-needed stimulus for further development.

The party currently in power is in the process of preparing a national plan for Georgia deve­lo­p­ment to 2030. If developed with wider public parti­ci­pa­tion and based on the “grow back better and greener” principle in line with EU legis­la­tion and the EGD, the plan may be able to serve as recovery tool to address immediate shocks and ensure the sustainable deve­lo­p­ment of the country. The EGD together with Asso­cia­tion Agreement provides new oppor­tu­nities for Georgia to make progress towards sustaina­bi­lity goals and to access potential financial sources, as well as further Georgia’s ambitions for closer inte­gra­tion with EU.

 

Recom­men­da­tions:

  • The EAP summit in 2021 should spotlight the EGD as a major topic, and the EU should continue to emphasize this topic on multi­la­teral and bilateral levels with the EaP countries to encourage co-ownership and enga­ge­ment on their part.
  • The Green Deal Roadmap and Strategy should be elabo­rated with the invol­ve­ment of all stake­hol­ders and ensure commit­ments in envi­ron­ment and climate sector in line with a long-term vision for the areas of energy, industry, trade, agri­cul­ture and transport.
  • The new envi­ron­mental action plan to be developed should be geared towards Georgia’s tran­si­tion to a climate-neutral, resource-efficient clean and circular economy in line with 2030 targets of the European Green Deal.
  • The capa­ci­ties of decision makers should be enhanced to promote the imple­men­ta­tion of already existing envi­ron­mental and climate legis­la­tion, as well as EDG inte­gra­tion into different economic sectors.
  • Ensure sustaina­bi­lity of the projects funded through EU-related financial streams, including those of inter­na­tional financial insti­tu­tions (e.g. EIB, EBRD and etc) and ECAs (e.g. KFW, ADFB , SACE and others).
  • The EU Taxonomy Regu­la­tion, estab­li­shing the framework for the EU taxonomy of sustainable acti­vi­ties, should be widely promoted and encou­raged vis-à-vis the EaP countries.
  • Promote EGD inte­gra­tion into different areas at different levels (coope­ra­tion among parlia­ments, local autho­ri­ties, deve­lo­p­ment of civil society, academia, cross-border coope­ra­tion. etc.).
  • Country stra­te­gies and action plans for zero pollution and zero emission systems should be defined for the agri­cul­ture, energy and transport sectors.
  • Provide support for and engage in syste­matic transfer of knowhow – new tech­no­lo­gies, inno­va­tive project models, internships and trainings for decision makers, experts, CSOs, businesses.

[1] 31 May 2021 on joint hearing of the Parlia­men­tary Commit­tees on European Inte­gra­tion and Envi­ron­mental Protec­tion and Natural Resources was mentioned that there are ongoing nego­tia­tions with the EU for Green Deal roadmap and strategy deve­lo­p­ment. The statement does not receive any follow up.

[2]   The European Green Deal and its Signi­fi­cance for Georgia, Ekaterine Mikadze, February 2021,

[3] GAPH, 2019, 2019 Pollution and Health Metrics: Global, Regional and Country Analysis,

[4] Social-economic Deve­lo­p­ment Strategy of Georgia “GEORGIA 2020”, Government of Georgia 2014,

[5] Sustainable Deve­lo­p­ment Goals National Document.pdf

[6] NEAP‑3 2017–2021,

[7] Network analogous to Natura 2000 outside of the EU.

[8] https://rm.coe.int/files04e-2020-georgia-svaneti1-candidate-emerald-site-nenskra-govt-rep/16809ce010

[9] New phase of EU4Energy Gover­nance project launched in Georgia, Moldova and Ukraine

[10] E.g. Georgia’s electri­city networks deve­lo­p­ment plan 2021–2031

 [11]Despite Bitcoin’s Dive, a Former Soviet Republic Is Still Betting Big , New York Times, 2019, November

[12] Georgia 2020 Energy Policy review, IEA

[13]  Energy Policy Concept of Georgia , November 2020, USAID

[14] Georgia Natio­nally deter­mined contri­bu­tion 2021,

[15]  Climate Decar­bo­niz­a­tion Scenarios for Georgia Transport Sector, Thomas Day, Sofia Gonzales-Zuñiga, Swithin Lui, New Climate Institute, January 2021

[16] Ministry of Economy and Sustainable Deve­lo­p­ment, 2017, Green Economy Policy and Strategy,

[17] Suppor­ting the Deve­lo­p­ment of a Green Growth Economic Strategy in Georgia, Technical Report, 2018, EaP Green

[18] EU-funded Projects Aiming at the Main Goal and Princi­ples of the Green Deal in Georgia

[19] https://freedomhouse.org/country/georgia/nations-transit/2020

[20]Defusing Georgia’s Political Crisis: An EU Foreign Policy Success? May 2021


 

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