Lessons from state-level policy-making in the US Southwest for the transatlantic community
by Agata Hinc, Managing Director, demosEUROPA – Centre for European Strategy
Natural resources are becoming more and more precious on both sides of the Atlantic. Both their quantity and quality is decreasing and it is becoming more difficult and costly to reach and extract some of them. At the same time, the climate challenge remains to be addressed effectively at the global and regional levels, both as far as mitigation and adaptation efforts are concerned. Due to the recession, economic growth has become the number one priority for the United States and the European Union. What is important though, is not only the speed of growth, but also its quality and sustainability. Socially, economically, and environmentally sound development is the way to ensure the quality of life of the next generations in America, Europe and other parts of the world. This article is going to bring to attention a few examples of how developments to date in the US Southwest could be enhanced further within the transatlantic community and help address challenges globally, as well as at the regional and country level.
First thing’s first: EU & US policies
Challenge
The United States has the potential to switch from being an energy importer to an energy exporter, but at the same time it faces new challenges with regards to unconventional energy (specifically shale gas and shale oil) as well as air, water, land and forest management. A question appears about whether the US current institutional framework is strong enough to face these challenges. Namely, whether the Natural Resources Conservation Service (an agency under the supervision of the US Department of Agriculture) is equipped well enough and its cooperation with other departments and agencies is sufficient. Europe is rich with water and minerals, and is relatively well bio diversified, but it is short of conventional energy resources. This situation has made the European Union heavily dependent on energy imports. The European Union’s energy dependency is predicted to increase from 54% in 2011 to 65% in 2050 (this includes 84% dependence on gas imports and 93% dependence on petroleum imports). The European Union realizes that its domestic resources are poorly managed and that if the current pattern of resource use is maintained in Europe, environmental degradation and depletion of natural resources will continue. The EU has prepared a series of strategies, from “Thematic Strategy on the sustainable use of natural resources” in 2005 to “A resource-efficient Europe – Flagship initiative under the Europe 2020 Strategy” at the beginning of 2011 and “Roadmap to a Resource Efficient Europe” at the end of 2011. Still, the EU has no single commissioner, authority, or agency devoted to resources exclusively. Resources-related strategies are being prepared by DG Environment. As in the case of the US, this may prove not to be sufficient enough.
Southwest best practice
The State of Arizona created an institutional basis for water management over 30 years ago to secure long-term dependable water supplies for Arizona’s communities. The Arizona Department of Water Resources administers and enforces Arizona’s groundwater code and surface water rights laws, it negotiates with external political entities to protect Arizona’s Colorado River water supply, and it oversees the use of surface and groundwater resources under state jurisdictions. The Department has been serving its purpose very well. The current water use in the State of Arizona is comparable to 1957 levels while the efficiency of water use has increased by 70% relative to the same time period. The Arizona Department of Water Resources sees its role as supportive to other departments. It provides strategic vision for water management, it tries to find middle ground between investments necessary and water use, and it helps other agencies with water planning. Thanks to its Department of Water Resources, Arizona does not suffer because of its poor water resources and continues to develop.
Policy recommendation
Resources management should become an umbrella over other policies both at the federal level in the United States and at the European Union level. Arizona’s best practice, in addition to other good practices from the US Southwest – such as the Southern Nevada Water Authority - could be examples of useful practices under the umbrella. The challenge of resources management of tomorrow, both in the US and the EU will be strongly connected to such policies as: competition, industry, entrepreneurship, environment, market, services, energy and climate, and financial affairs. Resource management should become supplementary to above policies of America and Europe. More importance should be given to resource management, as one of the key challenges of the future, and supervision of this issue should be shifted up to federal department level in the US and to directorate general level in the EU. This institutional setup would help the allies not only to better manage their domestic recourses but also facilitate and enhance transatlantic cooperation on resources.
Putting your own house in order: Member states level policy-making – the case of Poland.
Challenge
Poland is a country relatively rich with natural resources, although it lacks a policy and institutional setup that would enable it to manage them effectively. The efficiency of the use of natural resources in Poland is very weak and the energy intensity of Poland’s National Product is very high. In 2007, Poland needed 2.4 times more energy per unit of GDP than the EU-27 average. Poland is currently reshaping its energy policy and looking at potential long-term energy scenarios that would be in line with the country’s modernization and growth agenda and at the same time take into account environmental and climate concerns. What is more, Poland faces a challenge of floods, which become more frequent and intense each year. There is a growing need for a new water management strategy in the country. As far as legal framework is concerned, Poland struggles with implementation of energy-, environment- and climate-related regulations of the EU and at the same time has troubles with preparing its own legal framework in these fields (e.g. shale gas regulations). There is a lack of a single stakeholder within the government who would be responsible for resources (including specifically energy and environment). This situation harms the process of an evidence-based policy-making and delays creation of an efficient policy that would help drive economic growth in Poland.
Southwest best practice
The Energy, Minerals and Natural Resources Department of New Mexico has an up-to-date vision – it wants “a New Mexico where individuals, agencies, and organizations work collaboratively on energy and natural resource management to ensure a sustainable environmental and economic future”. It has 5 divisions (Energy Conservation and Management, State Forestry, Mining and Minerals, Oil Conservation and State Parks), which manage all state renewable and non-renewable resources. The Department of Energy, Minerals and Natural Resources developed a permitting system for old and new conventional energy power plants and it works on renewable energy strategy, as (due to its climate conditions) New Mexico could successfully become an exporter of renewable energy. Not without reason the US Environmental Protection Agency chose New Mexico for one of its first feasibility studies of large-scale renewable energy production – so called “Project Chino”. The Chino Mine, chosen by the EPA, is one of the largest open-pit copper mines in the world, covering over 9,000 acres. The Chino Project proved that Photovoltaic projects can provide a viable, beneficial reuse, and in many cases, generate significant revenue on a site that would otherwise go unused. Furthermore, “based on the analysis, the developer-owned PV project becomes feasible with a PPA agreement at the rate of $0.055/kWh and above”.
Recommendation
Resource management in Poland should be conceptualized in an integrated manner. On that basis, both strategic visions and institutional support should be created (as in the case of the US State of New Mexico). The potential of shale gas, the need to transform its energy sector, and the uncompleted and unsustainable environmental regulatory framework, among other issues, should make Poland think the way states like New Mexico did and consider creating a new ministry that would cover both energy and resources, including specifically: (A) conventional and unconventional energy resources (coal, gas, oil); (B) metals and minerals; (C) air, water, land, forests; and (D) renewable energy sources (water, sunlight, wind).
Last, but not least: global dimension
Challenge
Resources management has a special meaning for emerging global players (like China) and for developing regions (like Sub-Saharan Africa). Its nature is case-specific though. China, on the one hand, faces both environmental difficulties and an increasing dependence on commodities imports. This country is the world’s second-largest oil importer, the biggest coal importer and accounts for two-thirds of global iron trade. It is also the largest greenhouse-gas producer.
Africa, on the other hand, is a continent rich with natural resources (including oil, diamonds, gold, iron, cobalt, uranium, copper, bauxite, silver and petroleum), much of which are undiscovered or barely harnessed. Africa’s energy resources have attracted investments to the continent. For example, China owns 40% of Sudan's oil production.In correlation thereof, , Africans do not see as much of a benefit of the above dynamic as they potentially could. African countries are also the most threatened by climate change.
Both emerging economies and developing countries will need more access to water, which would enable lowering their poverty rate and fostering prosperity. At the moment, 100 million people in China have no access to improved water sources and in Sub-Saharan Africa 300 million people live in water stressed environments.
Southwest best practice
The American Southwest has great expertise in water management, supply, treatment, and distribution. This expertise could be successfully used in regions short of water all around the world. The Central Arizona Project is one flagship example. This 336-mile long system of aqueducts, tunnels, pumping plants, and pipelines has been designed to bring about 1.5 million acre-feet of Colorado River water per year to 5.3 million people in Pima, Pinal, and Maricopa counties in the State of Arizona. Its construction started in 1972 and was completed in 1993. It was a $4 billion investment of the US Federal Government and now the State of Arizona is systematically paying it back to the federal budget. The Central Arizona Project generates 5 million MWh of electricity a year; it is the largest single resource of renewable water supplies in the state of Arizona. Delegations from all around the world (including China) visit Arizona to learn about the Central Arizona Project.
Policy recommendation
It is in the interest of Europe and United States to contribute to fighting poverty and stimulate sustainable development in poorer regions of the world. There is a potential for transatlantic cooperation on resource management between emerging global players and developing countries. There is a need for new ideas on projects for emerging and developing countries that would help address their development challenges (including access to water and adaptation to climate change). Initiatives like the Central Arizona Project could serve as a good example. There are at least two international forums that could serve as a platform for this cooperation. The first one is the United Nations Climate Change Conference. The upcoming Conference is going to take place in Warsaw in November this year (COP19) and climate adaptation is going to be one of its key focuses. Additionally, an effective implementation of international financial climate policy mechanisms (specifically Clean Development Mechanism and Green Development Fund) will also be discussed. Another platform for transatlantic cooperation in this field could be Rio+20 (United Nations Conference on Sustainable Development).
