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Home Diaspora Lawyers Ejenavi on Sustainable Development, Oil Exploitation & Prospects for Synergies Rather Trade-offs...

Ejenavi on Sustainable Development, Oil Exploitation & Prospects for Synergies Rather Trade-offs Across Divergent Goals

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The contemporary oil and gas industry is confronted with irrefutable global challenges and is at a critical juncture. These challenges cut across environmental, economic, political, or technological demands to tailor exploration and production activities in accordance with wide-ranging issues tied to the sustainable development paradigm. In essence, the modern-day petroleum industry must consider all interlocking and mutually reinforcing pillars of sustainable development articulated as: environmental protection, economic growth and social development. Although the concept of sustainable development has since evolved and expanded into the 17 sustainable development goals (SDGs), its core premise and principles remain consistent. Each goal and target of the SDGs remains inextricably linked to fulfilling one or more aspects of the 3 pillars.

In actualizing the aims of sustainable development, the oil and gas industry has to underscore and fulfil the core demands which include environmental protection, (expressed via GHG and CO2 mitigations, including biodiversity preservation), energy security, typified by reliability of products supplies or their affordability and economic growth. Post the Paris Agreement in 2015, which reiterates the imperative of the transition into a low carbon economy, the industry is placed in the peculiar position of bracing up to current signals regarding divestments of funds from the sector. Due to these daunting challenges, creating a nexus between oil exploitation and sustainable development becomes imperative for developing petro-states as they are more reliant on hydrocarbon resources for driving their development agendas.

Certainly, the petroleum industry contributes to sustainable development in multiple ways by creating synergies across goals like poverty eradication via direct and indirect employment generation, energy security, economic growth through the state’s generation of substantial tax incomes and other revenues, including prompting technological advancement and innovation from more advanced economies. However, the petroleum industry’s massive potential to impact on broad ranging factors positively or adversely as articulated by the sustainable development goals (SDGs), traversing economic growth, ecosystems management & protection including social development makes it a topical aspect of the sustainable development discourse. The obvious challenge being, how to generate more synergies across the SDGs rather than trade-offs.

Similarly, the pursuit of the goals or SDGs such as goal 14, affecting sustainable use of oceans, or goal 15 on terrestrial ecosystems, halting of deforestation and ensuring sustainable consumption directly and positively impacts goal 13, on forestalling climate change and its dire implications. Nevertheless, the causal links between energy generation via fossil fuels use and climate change makes it a nagging issue requiring the need for targeting its amelioration via the targets and indicators of SDG 13, which stipulates the integration of climate change measures into national policies, strategies and planning. It is also clarified that the burning of fossil fuels can produce around 21.3 billion tons of carbon dioxide (CO2) per year. Carbon dioxide is a greenhouse gas that increases radiative forcing and contributes to global warming. More so, the ability of climate change or its effects to severely heighten inequality or aggravate inequities against the poor or disadvantaged cannot be cursorily dismissed as this directly impacts upon the attainment of the SDGs. The world’s poor and vulnerable are most susceptible to climate change and have minimal resistance or adaptive capacity to cushion the shocks and harsh effects. Some of these harsh effects range from the exacerbation of hunger, poverty, or inequalities between people and across countries to the impairment of health and well-being goals.

Thus, the need to effectively incorporate climate action plans into petroleum development or projects planning as part of national policies will serve to anticipate or put in place adaptive or mitigative measures to counter its debilitating effects whilst impacting positively on several goals. Similarly, a failure of integration or effective management efforts to tackle goals 14-15, affecting the sustainable use of natural resources, aquatic or terrestrial eco-systems and biodiversity during petroleum exploitation not only poses threats to food security but can severely impact SDG16 relating to peaceful societies and regional stability. This is quite evident from examples of oil induced conflict in Nigeria’s Niger-Delta[2], Angola’s Cabinda region, or East and South Yemen.[3]

Also countering the challenges regarding the SDGs actualization anchor heavily on local, national and international collaboration, including broad-based expert and NGO participation. More so, this interaction between state, industry and community objectives with the SDGs allows for not just short, but medium to long-term collaboration to foster economic and social sustainability, including a green oil industry. The SDGs tactically modify the erstwhile states-focused approach to sustainability, to act as a value-triggering means of operationalizing sustainable development of the petroleum sector, via a more expansive network of actors, including a wide-range of local and international participants who can contribute to relevant spheres of oil sector growth to trigger a multi-stakeholder involvement which leaves no one behind.[4]

Notwithstanding the considerable benefits or synergies derivable across the SDGs during oil exploitation, the issue of trade-offs in the sustainability discourse or in the oil industry remains inevitable. Trade-offs therefore come into play in the sustainability discourse when a juxtaposition of positives or negatives is required in a selection amongst competing options and outcomes. Invariably, positive gains with respect to some goals will be preferred at the expense of other SDGs preceding the implementation of a development decision.

Undoubtedly, the oil industry has been the precursor of negative externalities and trade-offs.[5] Evidently, the trade-offs and sustainability dilemmas from oil industry operations, range from adverse environmental footprint, carbon trails or contrary climate impacts and social challenges. Although these problems have triggered calls for decarbonization, the need to maintain global energy security, access to affordable, reliable, sustainable and modern energy for all, as advocated by SDG 7, intensifies the necessity of more impactful solutions in the industry to forestall global or regional energy crises and unsustainable development. A case of multiple trade-offs is even more glaring where petro-rich developing states are concerned. This is because petro-states grapple with the prospect of extensive climate change adaptation and mitigations challenges or costs in tandem with urgent development needs. This creates a dilemma as to what priority actions to execute with limited funds; continued petroleum exploitation for: poverty eradication, energy security which in turn impacts food security, health, sustainable cities, economic growth or moderate and progressive steps towards climate change mitigations? This tricky issue is subsequently considered, as it weighs heavily on petroleum reliant developing states in their quest for sustainable development.

Sustainable Development and Petroleum Exploitation: Synergies with Climate Action Indicators

In furtherance of the preceding issues relating to integration of synergies and trade-offs during petroleum exploitation, especially as it impacts on developing states, it is absolutely crucial to consider steps towards achieving goal 13 relating to climate action. Indeed, a core aspect of operationalizing and reconciling sustainable development with petroleum exploitation relates to the area of climate action as articulated by goal 13 of the SDGs. Moreover, the global indicator framework for sustainable development stresses the need to “Integrate climate change measures into national policies, strategies and planning”.[6] It further clarifies that countries should communicate the establishment or operationalization of integrated policies, strategies or plans which increase their ability to adapt to the adverse impacts of climate change, foster climate resilience, low emissions, albeit in a manner that does not threaten food production.[7] Thus, concrete steps towards goal 13 envisages that states, especially petroleum producers, in view of the propensity for CO2 emissions from the oil industry should have specific national plans and strategies towards climate action and mitigations.

Climate action comprises climate mitigation, climate adaptation, carbon neutrality or decarbonization. Likewise, Climate mitigation is considered any action taken to permanently eliminate or reduce the long-term risk and hazards of climate change to human life or property.[8] Whereas, climate adaptation refers to the ability of a system to adjust to climate change (including climate variability and extremes) to moderate potential damage, to take advantage of opportunities, or to cope with the consequences. On the other hand, Carbon neutrality entails the eradication of carbon or CO2 emitting energy sources. It also means eliminating the annual zero net anthropogenic (human caused or influenced) CO2 emissions by stated timelines or dates. Thus, implying that every ton of anthropogenic CO2 emitted is compensated with an equivalent amount of CO2 removed (e.g. via carbon sequestration), or decarbonization. These possible steps towards climate action thus rely heavily on states’ adaptive capacity which is indicative of the potential to adjust in order to minimize negative impacts and maximize any benefits from changes in climate.[9]

Even though it might appear puzzling that a discussion regarding a sustainable oil industry accommodates the issue of decarbonization, as they may be considered antithetical terms. However, as earlier clarified, the SDGs are interconnected. The positive achievements in a green oil industry ultimately impacts climate change adaptation and mitigations holistically, whilst tackling inequality across states, especially in the interests of developing states, small island states and of course oil dependent developing states, cumbered with the task of poverty eradication, food security, or other significant development challenges. Furthermore, the significance of the UNFCCC and accompanying Protocols such as the Paris Agreement has likewise been to target departures from fossil fuel usage by 2050.

Following from these objectives, the Paris Agreement thus sets out a universal framework to ‘strengthen global response to the threat of climate change’[10] whilst proposing measures towards climate change mitigation and adaptation. Undeniably, these scenarios tending towards decarbonization raise obvious implications regarding the long-term sustainability of petroleum exploitation in oil producing states. These actions automatically imply more risks of trade-offs between climate responses and broader SD goals. Reason being that such climate responses which include a departure from carbon emitting fuels or energy sources to expedite peaking of global emissions,[11] can adversely affect energy security, ultimately attenuating goal 7 regarding access to affordable energy, with its accompanying distributional effects. More so, the prohibitive costs of extensive climate responses, especially for developing states, entail diverting scarce resources from poverty eradication, health, social welfare and indeed other developmental priorities like employment creation, resilient infrastructure and sustainable cities.

Similarly, on the extreme side, deep decarbonization climate responses could become antithetical to growth whilst imposing development limitations on under-developed states as these countries currently lack the political, economic, technological and other platforms for handling carbon departure without exacerbating poverty or impairing food and energy security, which unfortunately is contrary to the aims of Goal 13 and its accompanying indicators.[12] In order to forestall such a scenario of food and energy poverty and its attendant challenges in developing states, Articles 2.2 and 4.4 of the Paris Agreement  propose the implementation of the Agreement in accordance with the ‘principle of common but differentiated responsibilities’ which applies to states ‘in the light of different national circumstances’ and respective capabilities.[13]

The Common but Differentiated Responsibility (CBDR) principle interlinks or equates higher levels of development to global environmental challenges and increased contribution to the dilapidation of global environmental resources which encompass: atmosphere, water or land. CBDR proposes appropriate distribution of responsibility. It demands that developed states which enjoyed the liberty of developing with scant environmental restrictions over time, be accorded a greater share of the remedial responsibility.[14] Similarly, the UNFCCC provides, ‘parties should act to protect the climate system “on the basis of equality and in accordance with their common but differentiated responsibilities and respective capabilities”.[15] Likewise, differential responsibility in climate action which is articulated by the Kyoto Protocol and recognized by SDG 13 on climate action, essentially maintains substantive equality between developing and developed States, to optimize efforts at securing the gradual compliance of developing state parties.

Thus “grace periods” or delayed or less stringent implementation of treaty commitments are allowed in favour of developing states. The Kyoto Protocol also makes a distinction between proposed goals for developed and developing states by requiring “developed countries to reduce their emissions while developing petro-reliant countries like Nigeria only need to report their emissions.”[16]

Notwithstanding CBDR’s attractiveness to developing states it has been criticized on grounds of being an “outdated principle”[17] which fails to address contemporary challenges or changing realities of parties. It is however argued that, CBDR remains a lifeline for developing petro-states to plan and optimize poverty eradication efforts, including the ability to recoup the considerable expertise, technology or funds required to drive a low carbon economy and optimize mitigation or adaptation efforts. it is further advocated that, CBDR yet provides a platform for achieving fairer and equitable solutions to climate change problems as it pursues and indorses synergies, collaboration and reconciliation of principles to optimize the sustainable development goals in petro-states.

Likewise, a commitment to urgent oil sector reforms predicates the need to holistically tackle goal 8 relating to economic growth in the oil industry simultaneously with goal 13 relating to climate action. This is because, the significant environmental risks posed by Green House Gas (GHG) emissions and the need to mitigate climate change by stabilizing atmospheric temperatures to pre-industrial levels of 1.5⁰-2⁰C, has raised considerable support towards a carbon neutral future or a low carbon economy. As a result, petro-states in the long-run must promote awareness of climate risks, invest in alternatives and take practical steps towards policy and national planning to diversify their economies and emerge from petro-dependence as part of adaptation efforts envisaged by Goal 13 and its targets. However, in the interim, it is re-iterated that for developing states or non-Annex 1 countries[18] to the Kyoto protocol, especially those particularly vulnerable to the severe economic costs and implications of decarbonization, the over-riding priorities as echoed by the Paris Agreement and the SDGs remain poverty eradication, food security and provision of basic needs to citizens.

Moreover, as much as it is one thing to speak of synergies between goals 8, affecting economic growth in the oil industry and environmental protection in terms of climate action (goal 13), it is another matter altogether to achieve workable synergies that can inter-link climate responses to other SD goals to achieve sustainable development. However, such examples are becoming more evident through innovation in the oil industry. One example of such effective synergy within the oil industry and its impact on multiple goals was that of the Lead Campaign Initiative.[19] This initiative sought to eliminate the use of lead in petroleum products in over 100 developing countries. The campaign involved a collaboration between governments and oil producers. Its positive impacts ranged from diminished atmospheric pollution levels, lowered GHG emissions or ozone impairing substances, which minimized climate impacts, increased respiratory or health benefits from reduced urban air pollution and ultimately ensured the elimination of lead-related health expenses on household incomes.

However, certain unavoidable trade-offs relating to the implementation of this initiative included, the phasing out of vehicles or equipment reliant on leaded fuels. This phasing-out process of lead reliant machinery of course impacted heavily on the poor. Even though in the short term, the initiative appeared to exacerbate poverty, the medium or long-term environmental and social benefits of the initiative far outweighed the initial drawbacks to engender sustainable development.

 Conclusion

The pursuit of sustainable development in an oil industry context, especially regarding petro-reliant countries, is the only possible progressive step in the right direction towards poverty eradication and a green economy. For any petro-dependent state, the need for actualizing and optimizing more synergies rather than trade-offs across the SDGs is paramount in escaping an inevitable or irreversible plunge into an abysmal or endless spate of oil induced crises.

[1] Dr. Onome Lisa Ejenavi is a Law Lecturer.

[2] Obi, Cyril. “Nigeria’s Niger Delta: Understanding the complex drivers of violent oil-related conflict.”Africa Development 34, no. 2 (2009).

[3] Ross, Michael L. The oil curse: how petroleum wealth shapes the development of nations. Princeton University Press, 2012.

[4] See, UNDP and International Finance Corporation, “Mapping the Oil and Gas industry to the Sustainable Development Goals: An Atlas” Available at: http://www.ipieca.org/media/3093/mappingogtosdgatlaslr2017.pdf  Accessed at 15th March 2018.

[5] See, Ross, Michael L. The oil curse: how petroleum wealth shapes the development of nations. Princeton University Press, 2012.

[6] See Goal 13 of the SDGs, Targets 13.2 Report of the Inter-Agency and Expert Group on Sustainable Development Goal Indicators (E/CN.3/2017/2)

[7] See, Goal 13, Indicator, 13.2.1. Report of the Inter-Agency and Expert Group on Sustainable Development Goal Indicators (E/CN.3/2017/2)

[8] See, Intergovernmental Panel on Climate Change (IPCC), 4th. Report. Available at: http://www.global-greenhousewarming.com/IPCC-4th-Report-Mitigation-of-Climate-Change.html Accessed, March 20, 2018.

[9] See, Intergovernmental Panel on Climate Change (IPCC), 4th. Report. A successful adaptation can reduce vulnerability by building on and strengthening existing coping strategies. Available at: http://www.global-greenhouse-warming.com/IPCC-4th-Report-Mitigation-of-Climate-Change.html Accessed, March 20, 2018.

[10] See Article 2 of the Paris Agreement (COP 21, Paris, 30 November – 11 December 2015). Available at: https://sustainabledevelopment.un.org/frameworks/parisagreement Accessed at; 10 June 2017.

[11] Peaking Emissions refers to when global emissions reach a specific maximum level by a specific date before subsequently declining. 133 “Paris Agreement,” FCCC/CP/2015/L.9/Rev.1, Art. 7.9. 134 “Paris Agreement,” FCCC/CP/2015/L.9/Rev.1, Art. 4.

[12] See, Goal 13, Indicator, 13.2.1. Report of the Inter-Agency and Expert Group on Sustainable Development Goal Indicators (E/CN.3/2017/2).

[13] See Paris Agreement (COP 21, Paris, 30 November – 11 December 2015). Available at: https://sustainabledevelopment.un.org/frameworks/parisagreement Accessed at; 10 June 2017. Also see, the later section on Equity for more information on the CBDR principle.

[14] See, Principle 7, Rio Declaration 1992.

[15] UNFCCC, supra note 7, art. 3.1 (“The Parties should protect the climate system . . . on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead. . .”).

[16] See, distinction between Annex 1 and non- Annex1 or Annex II parties. Kyoto Protocol to the United Nations Framework Convention on Climate Change, art. 3, Dec. 11, 1997, 37 I.L.M. 22 (1998) (requiring that only the “Parties included in Annex I shall . . . ensure that their aggregate [GHG] emissions . . . do not exceed their assigned amounts,”

[17] See, US Submission on Elements of the 2015 Agreement at ADP <http://unfccc.int/files/documentation/submissions_from_parties/adp/application/pdf/u.s._submission_on_elements_of_the_2105_ agreement.pdf>.

[18] See, Kyoto Protocol (list of non-Annex 1 countries) available at: http://unfccc.int/parties_and_observers/parties/non_annex_i/items/2833.php . See also Art. 2 Paris Agreement 1/COP/21; See, Paris Agreement 1/CP/21. Nigeria signed the Paris Agreement on 22 September 2016, ratification and acceptance of the treaty was on 16 May 2017 and entry into force of the treaty occurred on 15 June 2017. Available at: http://unfccc.int/paris_agreement/items/9444.php, Accessed on 10 June 2017

[19] Lead phase-out: Eliminating lead through partnership,” IPIECA and OGP. 10 Peter Tsai and Thomas Hatfield, “Global Benefits From the Phaseout of Leaded Fuel,” Journal of Environmental Health Vol. 74, No. 5 (5 December 2011)11.

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