Mr. Massimo Romano
Final Draft
United Nations Commission for Sustainable Development
New York, May 10-12, 2006
Mr. Massimo Romano ? Executive Vice President, ENEL Group (Italy)
2
Secretary General, Ministers, Excellencies, Ladies and Gentlemen,
Let me first thank Minister Alekshivili for the very much appreciated invitation
to this forum that represents a unique occasion for a discussion among
Governments, International Organisations, Multilateral Banks and Private
Sector on strategies and ideas for sustainable development.
Allow me to start with a brief description of Enel.
Enel is one of Europe?s 4 biggest electricity producers and distributors, with a
market cap of 45 billion Euros, over 31 million customers and 138 TWh of
electricity production worldwide.
Enel is fully committed to sustainable development as demonstrated by
its global leadership in ?renewables?. Let me just mention few figures:
· Enel has invested about 1,6 billion Euros in the 2001 to 2005 period
and plans to invest a further 2,3 billion Euros over the next 5 years;
· Company emissions have already been reduced by 20% in relative
terms since 1990;
· Our investments in ?renewables? encompass not only Italy, but also
Spain, Central and Latin America. In El Salvador, for example, we
embarked on our new geothermal projects in 2003 and, in just 3 years,
we will have reached a generation capacity of about 160 MW, with an
investment of 100 million US$, in full respect of the local communities
and with their wholehearted support.
3
· Enel is listed on the Dow Jones Sustainability Index and in the
Financial Times Stock Exchange for Good (FTSE4GOOD).
Furthermore, Enel supports initiatives such as the UN Global Compact, the
largest voluntary corporate citizenship initiative in the world which
encourages Corporations to commit themselves to a more sustainable and
inclusive global economy.
Having presented Enel, I would like now to give you a little perspective on
the following 3 points:
1. Energy and sustainable development
2. Private-public partnership for development
3. Climate change policies post 2012
1. Energy and sustainable development
The Millennium Declaration and the Millennium Development Goals
provide the international community with two basic principles (Goal 7 -
Ensure environmental sustainability and Goal 8 - Promote a global
partnership for development) that should inform all action toward
development, in all sectors , including energy.
As a player in the energy sector, ENEL reads these two goals as meaning
that every single player ? whether it is an international organization, donor,
lender, government or company, has to play its part and participate in
shaping a common, shared and feasible long-term global strategy , with
a firm commitment to the precise roadmap for its implementation.
4
Our view is that such a strategy needs to comply with the following
objectives:
· To fulfill the present and future energy needs of Developed and
Developing Countries (the World Bank estimates that two thirds of the
increase in world energy demand over the next 25 years will come
from the developing world)
· To guarantee the right price for investment i.e. at a price that proves
affordable for the consumer (at present 1.6 billion people in Africa and
South Asia have no access to electricity while nearly 2.4 billion people
still rely on wood, agricultural residues and dung for cooking and
heating) and remains sustainable for industry (which has a
responsibility towards all its stakeholders, including its employees)
· To guarantee security of supply and safety for consumer health and
the environment
· To establish a global, fair and firm commitment of all the countries for
tackling climate change effectively.
In such a framework, cooperation and partnership between the public and
private sector and the developed and the developing countries are, in Enel?s
view, the only keys to achieving those common objectives.
2. Private-public partnership for development
Cooperation between the private and the public sector towards sustainable
development can be implemented through two different mechanisms:
· Harmonized and predictable public incentives to foster investments in
renewable energy
5
· appropriate regulatory frameworks to attract investments in cleaner
production technologies.
As far as the public incentives are concerned, international financial
institutions must do their part by designing financing schemes that are
effective in promoting development in ?renewables?.
The World Bank?s announcement of a new program aimed at promoting the
use of clean energy in developing countries, where it is estimated that at
least 10 to 40 billion dollars per year are needed to cover the costs of for
climate change projects.
Governments have to contribute too by promoting the appropriate
regulatory and institutional framework and ?business climate?, and designing
appropriate mechanisms to effectively attract investment in ?renewables?
(e.g., guaranteed off-take and long-term premium prices to compete with
other commercial energy).
Enel is keen to continue its efforts in this direction, and to play its role in
promoting and disseminating the cleanest and most advanced technologies
within the appropriate regulatory and investment framework.
3. Climate change policies post 2012
As far as the existing international framework is concerned, Enel deems that
the Kyoto Protocol and the corresponding EU ETS mechanisms could
contribute to sustainable development , although they require some
improvement.
Enel is giving its contribution to the activity of the International Energy
Agency (IEA) on the identification of alternative approaches to overcome the
6
limits set during the implementation of Kyoto Protocol, following the mission
received by the Gleneagles G8 Summit.
In particular, we think that 4 major points should be considered in order to
improve the current Kyoto regulatory scheme:
1. Wider geographic and sector inclusion in the mechanism. The
Kyoto protocol covers just 1/3 of the world?s CO2 emissions, not
including important countries like the U.S., China and India. Of
course, we should consider that developing countries cannot afford the
same burden as the industrialized countries. We should imagine a sort
of asymetric convergence between developed and developing
countries. Alternative strategies are needed for a few simple reasons.
In the first place, the world?s biggest emitters ( USA, India, China) have
no obligations under the Kyoto Protocol; other major economies, such
as Japan and Canada have recently criticized Kyoto?s targets and
timetables. Secondly, the European Union itself will unlikely meet
Kyoto?s targets with the present measures, as it is shown by the most
recent projections by the European Environment Agency: at the same
time it is unlikely that, given Europe?s weak economic growth, stronger
measures are put in forth in order to achieve the climate treaty?s
targets.
2. Fair allocation rules of emission rights across nations. Allocation
rules should be technology-specific rather than country-specific,
thereby considering the structural differences among the different
countries (i.e., fuel availability and future growth plans).
3. Stable and long-term regulatory framework. In order to increase the
acceptance, clear and stable incentives should be offered to
participants.
4. Focus cleaner technologies implementation where most effective.
The use of the best available technology should be particularly pursued
in those countries with high specific emissions, in order to maximize
the contribution of such technologies to wards reducing global
emissions. The Developing Countries , constitute an important source
for achieving cost?effective emissions reductions, as the CDM
mechanism is already demonstrating.
In conclusion, we strongly believe that the more committed part of the
industry, of which Enel is surely a part, can prove an excellent ally to
government and
global efforts towards sustainable development and we invite the
international community to take advantage of its experience.
We are confident that if everybody commits firmly and seriously, we can
succeed in assuring a better future to this world.
Thank you very much.
May 10th, 2006
United Nations Commission for Sustainable Development
New York, May 10-12, 2006
Mr. Massimo Romano ? Executive Vice President, ENEL Group (Italy)
2
Secretary General, Ministers, Excellencies, Ladies and Gentlemen,
Let me first thank Minister Alekshivili for the very much appreciated invitation
to this forum that represents a unique occasion for a discussion among
Governments, International Organisations, Multilateral Banks and Private
Sector on strategies and ideas for sustainable development.
Allow me to start with a brief description of Enel.
Enel is one of Europe?s 4 biggest electricity producers and distributors, with a
market cap of 45 billion Euros, over 31 million customers and 138 TWh of
electricity production worldwide.
Enel is fully committed to sustainable development as demonstrated by
its global leadership in ?renewables?. Let me just mention few figures:
· Enel has invested about 1,6 billion Euros in the 2001 to 2005 period
and plans to invest a further 2,3 billion Euros over the next 5 years;
· Company emissions have already been reduced by 20% in relative
terms since 1990;
· Our investments in ?renewables? encompass not only Italy, but also
Spain, Central and Latin America. In El Salvador, for example, we
embarked on our new geothermal projects in 2003 and, in just 3 years,
we will have reached a generation capacity of about 160 MW, with an
investment of 100 million US$, in full respect of the local communities
and with their wholehearted support.
3
· Enel is listed on the Dow Jones Sustainability Index and in the
Financial Times Stock Exchange for Good (FTSE4GOOD).
Furthermore, Enel supports initiatives such as the UN Global Compact, the
largest voluntary corporate citizenship initiative in the world which
encourages Corporations to commit themselves to a more sustainable and
inclusive global economy.
Having presented Enel, I would like now to give you a little perspective on
the following 3 points:
1. Energy and sustainable development
2. Private-public partnership for development
3. Climate change policies post 2012
1. Energy and sustainable development
The Millennium Declaration and the Millennium Development Goals
provide the international community with two basic principles (Goal 7 -
Ensure environmental sustainability and Goal 8 - Promote a global
partnership for development) that should inform all action toward
development, in all sectors , including energy.
As a player in the energy sector, ENEL reads these two goals as meaning
that every single player ? whether it is an international organization, donor,
lender, government or company, has to play its part and participate in
shaping a common, shared and feasible long-term global strategy , with
a firm commitment to the precise roadmap for its implementation.
4
Our view is that such a strategy needs to comply with the following
objectives:
· To fulfill the present and future energy needs of Developed and
Developing Countries (the World Bank estimates that two thirds of the
increase in world energy demand over the next 25 years will come
from the developing world)
· To guarantee the right price for investment i.e. at a price that proves
affordable for the consumer (at present 1.6 billion people in Africa and
South Asia have no access to electricity while nearly 2.4 billion people
still rely on wood, agricultural residues and dung for cooking and
heating) and remains sustainable for industry (which has a
responsibility towards all its stakeholders, including its employees)
· To guarantee security of supply and safety for consumer health and
the environment
· To establish a global, fair and firm commitment of all the countries for
tackling climate change effectively.
In such a framework, cooperation and partnership between the public and
private sector and the developed and the developing countries are, in Enel?s
view, the only keys to achieving those common objectives.
2. Private-public partnership for development
Cooperation between the private and the public sector towards sustainable
development can be implemented through two different mechanisms:
· Harmonized and predictable public incentives to foster investments in
renewable energy
5
· appropriate regulatory frameworks to attract investments in cleaner
production technologies.
As far as the public incentives are concerned, international financial
institutions must do their part by designing financing schemes that are
effective in promoting development in ?renewables?.
The World Bank?s announcement of a new program aimed at promoting the
use of clean energy in developing countries, where it is estimated that at
least 10 to 40 billion dollars per year are needed to cover the costs of for
climate change projects.
Governments have to contribute too by promoting the appropriate
regulatory and institutional framework and ?business climate?, and designing
appropriate mechanisms to effectively attract investment in ?renewables?
(e.g., guaranteed off-take and long-term premium prices to compete with
other commercial energy).
Enel is keen to continue its efforts in this direction, and to play its role in
promoting and disseminating the cleanest and most advanced technologies
within the appropriate regulatory and investment framework.
3. Climate change policies post 2012
As far as the existing international framework is concerned, Enel deems that
the Kyoto Protocol and the corresponding EU ETS mechanisms could
contribute to sustainable development , although they require some
improvement.
Enel is giving its contribution to the activity of the International Energy
Agency (IEA) on the identification of alternative approaches to overcome the
6
limits set during the implementation of Kyoto Protocol, following the mission
received by the Gleneagles G8 Summit.
In particular, we think that 4 major points should be considered in order to
improve the current Kyoto regulatory scheme:
1. Wider geographic and sector inclusion in the mechanism. The
Kyoto protocol covers just 1/3 of the world?s CO2 emissions, not
including important countries like the U.S., China and India. Of
course, we should consider that developing countries cannot afford the
same burden as the industrialized countries. We should imagine a sort
of asymetric convergence between developed and developing
countries. Alternative strategies are needed for a few simple reasons.
In the first place, the world?s biggest emitters ( USA, India, China) have
no obligations under the Kyoto Protocol; other major economies, such
as Japan and Canada have recently criticized Kyoto?s targets and
timetables. Secondly, the European Union itself will unlikely meet
Kyoto?s targets with the present measures, as it is shown by the most
recent projections by the European Environment Agency: at the same
time it is unlikely that, given Europe?s weak economic growth, stronger
measures are put in forth in order to achieve the climate treaty?s
targets.
2. Fair allocation rules of emission rights across nations. Allocation
rules should be technology-specific rather than country-specific,
thereby considering the structural differences among the different
countries (i.e., fuel availability and future growth plans).
3. Stable and long-term regulatory framework. In order to increase the
acceptance, clear and stable incentives should be offered to
participants.
4. Focus cleaner technologies implementation where most effective.
The use of the best available technology should be particularly pursued
in those countries with high specific emissions, in order to maximize
the contribution of such technologies to wards reducing global
emissions. The Developing Countries , constitute an important source
for achieving cost?effective emissions reductions, as the CDM
mechanism is already demonstrating.
In conclusion, we strongly believe that the more committed part of the
industry, of which Enel is surely a part, can prove an excellent ally to
government and
global efforts towards sustainable development and we invite the
international community to take advantage of its experience.
We are confident that if everybody commits firmly and seriously, we can
succeed in assuring a better future to this world.
Thank you very much.
May 10th, 2006