Armenian case features the Global Environmental Outlook (GEO 5)

The Armenian case portraying the transition to universal water metering and volumetric water pricing was highlighted in Chapter 11 “Europe” of the fifth Global Environmental Outlook (GEO-5), launched on the eve of the Rio+20 Summit by UNEP.

GEO-5 is the most authoritative assessment initiated and coordinated by the United Nations Environment Programme (UNEP). The main goal of GEO is to keep governments and stakeholders informed of the state, trends and outlook of the global environment. Over the past 15 years, GEO reports have compiled and examined a wealth of data, information and knowledge about the global environment; identified potential policy responses; and provided an outlook for the future. The assessments, and their consultative and collaborative processes, have worked to bridge the gap between science and policy by turning the best available scientific knowledge into information relevant for decision makers. The GEO-5 report was produced over two years in a process that involved more than six hundred experts worldwide, who collated and analyzed data from every continent to build up a detailed picture of the world‘s wellbeing. The GEO-5 was launched on June 6, 2012 in Rio de Janeiro, Brazil and twelve other locations worldwide. The report is available at http://www.unep.org/geo/geo5.asp

GEO calls attention to the need for the measurement of our natural capital as a key precondition for better management and mentions as a positive example Armenia’s reform of measuring water consumption. The report points out that “soon after the reforms took place, average water use decreased three to four times compared to the use based on flat-rate calculations. The massive process of introducing individual metering became a trigger for a chain of water sector improvements, all backed by a legal, regulatory and institutional framework that enabled private sector involvement accompanied by investment and management efficiencies. As a result, the quality and reliability of water delivery improved.” Even being an economic instrument without an environmental target, metering and meter-based pricing has resulted in environmental co-benefits.

Given this positive result, are there other areas where Armenia could potentially offer a positive example by addressing some of its own needs? Under current conditions, Armenia urgently needs to speed up efforts to secure its energy supply and sustainability. This can be supported by improved energy efficiency (especially in buildings where the potential to reduce energy consumption is 40%, equivalent to reducing greenhouse gas emissions by 944,000 tCO2e per year), better and more widespread use of indigenous energy resources, including particularly renewables.

Currently, there is a broad range of policies and incentives practiced throughout the world that can reduce production costs and speed up commercialization and market creation. Among others, these include appliance standards, building codes, energy efficient building tax reductions, renewable energy loan guarantee programs, clean energy funds, support for research and development and education at all levels, etc. Specific to renewable energy are the renewable portfolio standards (RPS) and feed-in tariff incentive schemes. RPS schemes are quota-based, and retail suppliers are obliged to supply a certain portion of electricity from renewable sources. RPSs are practiced in the UK, Belgium, USA, etc. Wider spread in most EU countries is the feed-in tariff scheme, also called “advanced renewable energy tariff”, which is based on a mandated price of electricity sold into the electric grid from renewable source and that guarantees access to a grid provided by utilities. The advantages include geographic distribution, local acceptance and participation, lower administrative costs, etc. Used as examples in GEO-5 are two pricing models for feed-in tariffs: a market-independent fixed price, applied in Germany, and a market-dependent premium price model, practiced in Spain. Another interesting example is in Bulgaria, where a special fund is created for farmers or individual land owners to rent their land plots for installing renewable energy generating facilities. Finally, the good news in regard to renewables is the rapid transformation in solar generation driven by expanding global investments in advanced solar technologies and the drastic cost reduction in solar costs.

While there is no lack of bright ideas that could be a part of Armenia’s energy future, the main barrier rests in establishing a clear vision and strategic planning implementation for speeding up the development and deployment of new energy technologies; ensuring that these innovations are feasible and worth an investment to lead towards accelerating the process of energy modernization; and can catch up with EU trends and provide yet another positive example.

Naira Harutyunyan, GEO-5 co-author, PhD Candidate and PFA Fellow
Laszlo Pinter, GEO-5 co-author, Professor
Central European University
Dep. of Environmental Sciences and Policy
Nador ut 9, H1051, Budapest, Hungary