Israeli Climate Change Policy Faces Grim Reality

UNCLAS TEL AVIV 002536

SENSITIVE
SIPDIS

STATE FOR OES/ENV, NEA/RA AND NEA/IPA
AMMAN FOR ESTH - BHALLA
EPA for International - Metcalfe

E.O. 12958: N/A
TAGS: SENV ENRG KGHG OECD IS
SUBJECT: Israeli Climate Change Policy Faces Grim Reality


1. (SBU) Summary. Israel's Environmental Protection Ministry (MEP)
admits that its evolving climate change policy will not be able to
reduce the country's CO2 emissions anywhere near the degree that
climate change advocates recommend. Studies project a full doubling
of Israel's emissions from today until 2030. Even a full-scale
conservation and conversion effort may still yield a 30 percent rise
in output. GOI plans a substantive delegation going to the Climate
Change summit in Copenhagen, though acknowledges that its
contribution may disappoint. End Summary.


2. (U) In early November, Israeli Environment Minister Gilad Erdan
received the final report commissioned from McKinsey and Company on
the country's future greenhouse gas emissions. The report projects
that the current 71 million tons of CO2 Israel produces will rise to
142 million tons by 2030 in the "business as usual" forecast, a full
100 percent increase. The new data will form the basis for the
National Plan which the MEP is preparing. The McKinsey data are
even more grim than a previous study done by an Israeli firm, which
last spring forecast a 63 percent increase in GHG emissions over a
year 2000 baseline by 2025. At present, Israel's per capita
emissions data place it between Japan and the UK, about half the US
per capita rate, according to IEA figures.


3. (U) The news disappoints the increasingly vocal environmental
lobby, but MEP officials defensively note that the countries able to
score major reductions in CO2 output from 1990 or 2000 levels had
major smokestack industries (steel, automobiles, heavy
manufacturing) that were dismantled or renovated, whereas Israel has
none of these. Israel has less high-polluting industry to give up.
The bulk of projected emissions growth in Israel will occur because
of growth in population, which is increasing by 1.3 percent
annually, rising living standards, and rising energy consumption -
particularly for water desalination.


4. (U) MEP plans to tackle the challenge through both short-term
investments and long-term social policies. At present 55 percent
of Israel's GHG emissions come from electricity generation, 18
percent from transportation, 10 percent from garbage and waste
treatment, and 5 percent each from agriculture, cement, and building
sectors. The government's goal of producing 10 percent of its
electric power from alternative sources (chiefly solar) by 2020 may
be bumped up to 25 percent by 2030. Other potential cuts could be
realized by improving lighting efficiency nationwide, moving to
electric cars, and making homes and offices more thermally efficient
to save on energy. Longer term behavioral modifications in
Israelis could potentially net energy savings through greater use of
public transportation, using 15 percent less water, turning air
conditioning thermostats 2 degrees higher, and consuming less meat.
McKinsey estimated that together these actions could hold the
emissions rise to only 91-97 million tons - still 30 percent above
today's level but nearly 70 percent less increase than would
otherwise be generated.


5. (SBU) The McKinsey report included emissions from the Occupied
Territories in the Israeli data. This added 6 percent (8 million
tons) to the total. Should the PA component be subtracted, Israeli
emissions growth might decline further from the projected level, due
to the impact that greater demand from an on average younger, lower
standard of living Palestinian population is having on the energy
use forecast.


6. (U) Yossi Inbar, Director General of MEP speaking at a Water
Technology conference November 18, defended the country's growth of
energy use by noting Israel's 4 to 5 percent GDP growth rate over
the past few years (although this year growth will slip to under 1
percent). This growth rate exceeds that of the OECD average, and on
top of the population growth rate substantiates growing energy
consumption. The prospective doubling of Israel's economy by 2030
while emissions increase only 30 percent implies significant
improvement in energy efficiency. Energy use for desalination will
have a major impact. Israel's energy constraints are clear, Inbar
said: it has no hydroelectric possibilities, nuclear is unadvisable
given the region's politics, and the country has no coal or oil
deposits, and only recently discovered some natural gas offshore -
which will take 2-3 years to tap into. He was guarded about
Israel's ability to ramp up solar and wind to 25 percent of
consumption, observing that it requires 2 hectares of land per
megawatt of concentrated solar thermal power. He doubted that 200
square kilometers of Israel could be dedicated to energy
production.


7. (SBU) Comment: MEP officials acknowledge that Israel's incipient
national plan may not be impressive compared to others to be
unveiled in Copenhagen, but it is realistic and reflects Israel's
unique economic niche. Israel features a developing country growth

rate, but with a developed nation's living standard and rate of
energy use. GOI incentives to promote private-sector investment in
alternative energy production are generating commercial interest
here. For example, the GOI's long-term guarantee of higher feed-in
tariffs for solar-generated electricity have attracted attention
from Arava Power/Global Sun Israel, which is planning several
projects in the Arava region (Arava Power has approached OPIC for
financing). MEP officials underscore that Israel's overall
contribution to global GHG emissions is paltry compared to that of
other countries, about three-tenths of 1 percent of global CO2.
Nonetheless, they evidence some concern that OECD members will find
the Israeli climate change program disappointing.

Cunningham