Major achievements in 2005
In 2005 as oil prices climbed to over US$ 60 per barrel and tensions
in the Middle East continued unabated, the UNECE Energy Security
Forum was called on to review the diversification of energy supply sources
for energy importing member States. The June 2005 High-Level Meeting on
Energy Security and the Caspian Sea Region in a Global Context concluded
with an agreement between Azerbaijan, Islamic Republic of Iran, Kazakhstan,
Russian Federation and Turkey on increasing exports from the Caspian
Sea region. The Statement issued by the high level representatives noted
that in order for UNECE member States to benefit from the increased oil
and natural gas exports from the Caspian Sea Region, multi-billion dollar
investments would be needed to expand energy production capacities
and provide for new energy transport infrastructure. Most importantly,
the countries of the Caspian Sea Region agreed to establish and maintain
a suitable investment environment, regulatory framework, facilitating
the transfer of technology, as well as to provide unrestricted access
of their energy products to the European market. Recognising the work
of the Energy Security Forum, the Russian high-level representative invited
the group to contribute its conclusions and recommendations on global
energy security issues to the next meeting of the Group of Eight G-8 that
is to focus on energy security and will be hosted by the Russian Federation.
A new CD-Rom based UNECE eBook entitled “Energy Security and the Caspian
Sea Region in a Global Context” was issued.
The need of the global energy markets for an internationally comparable evaluation
of energy reserves has led the Ad Hoc Group of Experts on Energy Reserves
and Resources to expand its scope from the classification of solid fuels
to include coal, oil, natural gas and uranium reserves. Bringing together
disparate partners including OPEC, OECD/IEA, Society of Petroleum Engineers
and the International Accounting Standards Board, the Group of Experts continued
to promote the widespread application of the United Nations Framework Classification
for Fossil Energy and Mineral Resources (UNFC) established as ECOSOC Resolution
2004/233. The expansion of work in this field will help to make all energy
commodities more attractive to foreign investors for exploitation. The
original UNFC has been adopted by more than 60 countries and by selected stock
exchanges worldwide.
Translating the global UN Framework Convention on Climate Change in practical
changes in specific countries, cities and factories is the focus of the
Energy Efficiency 21 Project and its related investment funds to be launched
in 2006. Clearly, in order to reduce greenhouse gas emissions under the
Protocol, energy policy reforms and the institutional framework for emissions
trading need to be further developed in UNECE member States. But most
importantly, very large energy efficiency investments will be needed to
reduce carbon emissions especially in Eastern Europe, South-eastern Europe
and the Commonwealth of Independent States (CIS). These countries have
the highest concentrations of carbon emissions that can be reduced at
a fraction of the costs elsewhere. And yet the energy efficiency market
in Eastern Europe is vast, estimated to be over Euro 200 billion by a
recent European Commission study. Comparatively few energy efficiency
investments have been launched in Eastern Europe until now due to policy
barriers, inadequate financial engineering skills in Eastern Europe and
the lack of appropriate financing mechanisms.
A new project on Financing
Energy Efficiency Investments for Climate Change Mitigation was approved
last year by the United Nations Foundation (UNF) and was endorsed
more recently by the French Ministry of Foreign Affairs and the French GEF
(FFEM). The Global Environment Facility (GEF) is the third co-financing
partner for this work through the United Nations Environment Programme
(UNEP), one of the GEF Implementing Agencies. The new project under
Energy Efficiency 21 will provide for the establishment of a public-private
partnership dedicated fund to finance energy efficiency investments in UNECE
transition economies.
With the support of 22 gas companies throughout the UNECE region,
Gas Centre’s
new Task Force on Company and Market Structure covering all UNECE
countries in Europe held its first meetings to look at gas markets
and gas industries as well as their implications for countries in
Central and Eastern Europe. A High-Level Conference on Gas Production
was hosted by Gazprom in the Novy Urengoy, Siberia. The Gas Centre
Database was restructured and updated to align it with the expectations
of member companies and wider developments in this field. The Gas
Centre Task Force on the Implementation of the EU Gas Directive and
the Task Force on Gas Transportation and Tariffs reviewed how Central
and East European countries and their gas industries can best prepare
themselves and benefit from the experiences acquired in Western Europe
and North America notably on the opening and liberalization of gas
markets.
Under Regional Advisory services, a new Regional Programme for the Rational
and Efficient Use of Energy and Fuel Resources in the CIS was launched following
approval of the CIS Economic Board. This is a result of the previous UNECE-CIS
cooperation on energy efficiency and energy security. A new project on Capacity
Building for Air Quality Management and the Application of Clean Coal Technologies
in Central Asia (CAPACT) was launched with funding from the UN Development
Account as an intersectoral project between the Committee on Sustainable Energy
and the Committee on Environmental Policy. This is designed to strengthen
the capacity of air quality management institutions to implement the UNECE
Convention on Long-range Transboundary Air Pollution. It will provide assistance
to participating governments on energy pricing policy reforms and promote
investment project finance. Energy efficiency projects were also approved
with UNDP and Global Environment Facility support in Belarus, Kazakhstan,
Kyrgyzstan, Russian Federation and Ukraine.
An expert review mission in the Russian Federation was held under
the new technical assistance project on Coal Mine Methane in Central and Eastern
Europe and the CIS with extrabudgetary support from the US Environment
Protection Agency (US EPA) and the United Nations Foundation. This
project is overseen by the new Ad Hoc Group of Experts on Coal Mine Methane
launched following the ministerial meeting on “Methane to Markets” hosted
by the US EPA in Washington DC. It will serve as part of the technical follow-up
to the commitments undertaken by ministers at that meeting. The economic,
social and environmental dimensions of coal in the countries in transition
continue to be addressed.
Major challenges for 2006
Major challenges include new initiatives to implement the mandates of
the Committee on Sustainable Energy and other UN bodies in the field of
sustainable development in the energy field, energy security, energy efficiency
for climate change mitigation, a classification system for energy commodities,
and intersectoral activities as called for in the Millennium Declaration
and the World Summit on Sustainable Development. The work programme
will be implemented increasingly with innovative Internet applications
to enhance communications and value-added information transfers within
and between UNECE member States in accordance with the recommendations
of the World Summit on the Information Society.
The Energy Security Forum will analyse and provide conclusions and
recommendations on emerging energy security risks and risk mitigation
in a global context to the 2006 Group of Eight G-8 Summit meeting
in the Russian Federation. The Energy Efficiency 21 Project will launch
its new phase 2006-2009 together with the development of an investment
fund to finance energy efficiency projects in Eastern Europe and the CIS
to reduce greenhouse gas emissions.
The Committee on Sustainable Energy contributed a Review of Progress
on Sustainable Energy Development in the UNECE Region to the UNECE
Regional Implementation Forum on Sustainable Development in December
2005 prepared jointly with the Committee on Environmental Policy.
This was in preparation for the UN Commission on Sustainable Development
(CSD-14) to be held at UN Headquarters in New York from 1-12 May
2006. The 2006 session will review progress in the following areas:
energy for sustainable development, industrial development, air pollution/atmosphere
and climate change. Intersectoral activities will also include
the CAPACT project in Central Asia, joint projects in timber and transport,
notably on wood as an energy source as a follow up to the UNECE Seminar
on Forests-Common Benefits, Shared Responsibilities, Multiple Benefits, and the “Blue Corridor” project
on use of natural gas as a transport fuel.