Commitment to GREEN GROWTH

 

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Commitment to GREEN GROWTH

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Commitment to GREEN GROWTH Document for public consultation MINISTRY OF ENVIRONMENT SPATIAL PLANNING AND ENERGY

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Commitment to GREEN GROWTH CONTENTS B

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Introduction 1. 2. 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 4. 4.1 4.2 4.3 4.4 4.5 4.6 5. 5.1 5.2 Green growth at the centre of a new global paradigm Portugal: a greener economy – vision and goals Portugal’s green transition – areas of intervention Water Waste Agriculture and forestry Energy Transport The extractive and manufacturing industries Biodiversity and ecosystem services Cities and territory The sea Tourism Drivers of green growth Funding International Promotion Taxation Innovation Information Public Procurement From commitment to action Public discussion Supervisory structure 2 16 22 30 32 37 40 44 49 52 57 60 66 70 74 75 79 80 85 87 88 92 93 94 1

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Commitment to GREEN GROWTH INTRODUCTION 2

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It is essential to implement a post-troika vision for long-term development following the successful completion of the Financial Adjustment Programme (FAP), which was monitored by the troika. It should be kept clear that the post-troikai period is not just a follow-on from the FAP. A post-troika strategy means not only keeping up our essential, lasting commitment to fiscal responsibility, but also embarking on a new cycle of structural reforms and selective, productive investments in strategic areas such as knowledge, industrial policy and a green economy that sustainably foster growth and employment. The Memorandum of Understanding (MoU) with the ECB, EC and IMF was necessary but not sufficient for growth and employment. The post-troika period is therefore a time for moving on from the bailout phase to the sustainable growth and development phase. It is not acceptable that the design and implementation of structural reforms, aimed at solving problems that have accompanied us for decades, has to systematically start from scratch with each new legislature. No-one wants a false ideological plain or a sudden exercise in consensus and convergence that are not in line with the different parties’ manifestos. There certainly are, however, themes, namely in the area of green economy, for which it is desirable, essential and possible to generate political solutions that go beyond the short-term horizon and make demanding structural reforms more stable and predictable. It is important to involve in this convergence exercise not only the political parties but also social, economic and environmental representatives. Now that the MoU with the troika has been successfully concluded, the time has come for green growth. Firstly, we have to take action in light of the worsening signs of climate change, the deterioration and scarcity of water resources and the loss of biodiversity, as resources come under increasing pressure. The demographic effect is expected to increase energy consumption by 45%, water consumption by 30% and food consumption by 50% by 2030. The effects of climate change in Portugal according to the Fifth Report of the Intergovernmental Panel on Climate Change (IPCC)ii will be considerably higher than the European average, especially when it comes to the coastline and water resources. 3

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Commitment to GREEN GROWTH Secondly, there is an urgent need to overcome the contradictory situation that we have been in for decades: where natural resources are concerned, we have high potential for talent, resources and infrastructures but also considerable structural problems. That contradiction is more than evident when: > We have abundant, and diverse renewable energy resources. This places us in a favourable position to achieve a target of 31% renewables in final energy consumption by 2020iii (we have already passed 27%, 58% of which in electricityiv). But we are still highly energy-dependent (around 71.5% in 2013v, the lowest figure of the last 20 years) and energy intensity appears prominently in our GDP. > In 2013, Portugal’s climate policy was rated the third best in the world, according to the Climate Change Performance Index (CCPI)vi, but we were also warned that we were more vulnerable to the effects of climate change than the European average. > Portugal is one of Europe’s richest countries in biodiversity. The Natura Network and the protected areas cover one fifth of the countryvii, 25% of our municipalities and one third of the population. However, living in a nature reserve is often a burden and local residents are not benefiting enough from the economic value of biodiversity. > Infrastructures have developed substantially. Around 95% of the population has access to mains water supply and 80% to wastewater treatment. Even so, losses in the water supply system average 40%. Furthermore, operations are economically and financially unsustainable with high tariff deficits and debts owed by municipalities. There are also blatant inequalities between prices of services in inland and coastal regions. > The Portuguese coastal areas where 80% of the populationis concentrated has a high environmental and economic value. However, 14% of the coast is artificial, 25% is suffering from erosion and 67% is at risk of land loss. 4

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> We have high potential in the metal resource sector (possibly up to 1% of GDP), but, with the exception of the recent Semblana concession, no new mining licences have been issued for over 30 years. > Waste dumps disappeared many years ago, but 54% of urban waste is still sent to landfillsviii. Use of plastic bags is very high (466 per person per year). > We have considerable skills in the construction sector, but only 10% of its activity goes towards urban renewal. The European average is 37%. > Spatial planning policies and instruments have played an essential role in regulation of land use in recent decades. But the fact that we have many overlapping plans for the same area, communicating with each other inefficiently and changing slowly and in an uncoordinated fashion, has generated inefficiency and inequality, reduced transparency and competitiveness and made people wary of decisionmaking processes. Thirdly, we must harness economic opportunities and the chance to create jobs associated with green growth. First and foremost, because we have the talent, resources and infrastructures needed to compete and win on a global scale very soon. But also because demand for green goods and services has also been growing substantially worldwide. It is worth noting that: > Green economy already represents 4 trillion euros worldwide and is growing 4% per year. Green sectors accounted for 2.5% of the EU’s total GDP in 2010 and are expectedix to grow around 30% per year up to 2025. It is therefore one of the region’s most dynamic sectors. > Investment in clean energies totalled 300 billion dollars, with the EU and China responsible for 25% each. 5

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Commitment to GREEN GROWTH > Investment in energy generation infrastructures and networks is expected to reach 48 trillion dollars by 2035. Two thirds of which in emerging and non-OECD countries. Seven trillion dollars of this investment are expected to be for electricity grids, 6 trillion for renewable energy and 1 trillion for nuclear power.x > It will be necessary to invest 1 trillion euros in infrastructures in the EU by 2020 and 2.5 trillion by 2025. > Green jobs have shown remarkable resilience to the recession. They increased from 3 to 4.2 million in the EU between 2002 and 2011 and rose 20% during the recent European recession.xi In Portugal, green jobs increased by 7.3%, despite the recent recession. > If the EU sets the goal of increasing the productivity of resources by 30% up to 2030, as is currently being discussed in the interim review of the 2020 Strategy, this will contribute to a 1% GDP increase and 2 million jobs in the EU.xii The goals of green growth are wholly consistent with the major challenges facing Portuguese society and may even make a decisive contribution to meeting those challenges: growth, employment, lower dependency on imports, more intelligent taxation (higher taxes on what harms and pollutes and lower taxes on what produces and earns) and quality of life. Under the MoU and a post-troika period agenda, the government has been undertaking ambitious structural reforms in the areas of environment, energy, spatial planning, the sea, transport, urban renewal, housing, science and innovation. These reforms need now to be viewed over a much longer timeframe than a single legislature. It was in this spirit of non-acquiescence in diagnosis, reformism in solutions and optimism in results that the Green Growth Coalition was founded in February 2014. It combines the efforts of almost 100 associations, representatives of the business, 6

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science and financial sectors, public bodies, foundations and NGOs. The Green Growth Commitment is a direct result of the Green Growth Coalition’s discussions and spirit. The Green Growth Commitment wishes to lay the foundations for a commitment to policies, goals and targets that foster a development model that will reconcile essential economic growth with lower consumption of natural resources and social justice and quality of life for the population. Starting from the natural assumption of a need for lasting, budgetary responsibility, the focus is now on eliminating other structural constraints that have, in recent decades, prevented, a growth pattern for the Portuguese economy that is financially, socially, economically and environmentally sustainable . A new cycle of EU programmes, with funds that could be drivers of change and national recovery, is opening up new opportunities for public and private agents while driving up the competitiveness and sustainability conditions of the Portuguese economy. There has been growing awareness in recent years among economic and political actors of the potential of synergies between economic growth and sustainability and strategic choices in which the green component is an actual reality of the economic growth priorities. In this context, Portugal is in a privileged position and must make the most of its competitive advantages. It must aspire to be a leader of this new global trend making full use of its natural resources, infrastructures and talent to compete and prevail on a global scale. This framework provides an opportunity to promote an integrated, comprehensive vision of areas and sectors with green growth potential nurturing the ability to link research, development and innovation to production, products, services and processes and also to funding mechanisms. This would help decouple economic growth from the use of resources, foster energy and material efficiency and identify new economic opportunities. It is important to understand, given the cross-cutting nature of this issue, that this document complements and is in harmony with a significant number of existing or future sectorial or thematic plans aimed at generating joint accountability of public and private actors. 7

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Commitment to GREEN GROWTH This document is intended, on the other hand, to lay the foundations for an ambitious, lasting commitment benefiting from dialogue with political parties and with social, economic and environmental partners. The initiatives mentioned here reflect, therefore, a conceptual and quantitative determination while seeking to ensure enough flexibility during implementation to accommodate a variety of management options. The Green Growth Commitment sets 13 quantified goals for 2020 and 2030: 1 2 3 4 5 6 7 8 9 10 11 12 13 Increase green GVA 2000 million euros in 2012 to 3000 million euros in 2020 and 5100 million euros in 2030 Increase green exports 500 million euros in 2012, to 700 million euros in 2020 and 1200 million euros in 2030 Create green jobs 70000 people in 2012, to 95000 people in 2020 and 140000 people in 2030 Increase productivity of materials € 0.826 GDP / kg materials consumed in 2012 to 0.98 in 2020 and 11.9 and 20130 (ensuring the European objective of 30% growth by 2030) Increase the incorporation of waste in the economy 56% in 2012, to 68% in 2020 and 87% in 2030 Focus on urban renewal 8,7% of new works in 2012, to 17% of new works in 2020; 23% of new works in 2030 Improve energy efficiency energy intensity: 129 toe / M € GDP in 2012 to 134 toe / M € GDP in 2020 and 107 toe / M € GDP in 2030 Improve water efficiency 35% of total water in network unbilled in 2012, to a maximum of 25% in 2020 and 20% in 2030 Reduce CO2 emissionsO2 between 68 and 72 Mt CO2 in 2020, to 68-72 Mt CO2 in 2020, and 54 and 60 Mt CO2 in 2030, contingent on interconnections Increase share of renewable energy 24,6% of final energy consuption in 2012, to 31% in 2020 and 40% in 2030 Improve condition of bodies of water 52% of bodies of water upgraded from “low to god” to “good or higher” in 2012 to 72% in 2020 and 100% in 2030 Improve air quality 15 days with an Air Quality Index of poor or bad in 2012, till a maximum of 9 days in 2020 and 2 days in 2030 Enhance biodiversity 84 species and 48 habitats with favourable conservation status per bio geographic region in 2012, to 126 species and 96 habitats in 2020 and 158 species and 144 habitats in 2030 8

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In addition to these 13 quantified goals for 2020 and 2030, the Green Growth Commitment sets out 83 initiatives in 10 sectors and six drivers. They are described in detail in Chapters 3 and 4. The most important of these 83 initiatives are: 1. Broad restructuring of the water sector involving: > increasing the independence and competences of the regulatory authority by setting out new statues for ERSAR, legislating on itemised invoices and introducing new tariff regulations for upstream systems; > reorganising the Águas de Portugal (AdP) Group’s and multi-municipal systems’ areas by merging the nineteen systems into five to generate economies of scale and scope, promote balanced tariffs over extended regions and find solutions to the problem of chronic tariff deficits; > fostering more integrated strategies for managing upstream and downstream water supply and sewerage services as a way of maximising process operational synergies with significant benefits to consumers; > reorganising the AdP Group’s corporate structure to achieve reductions in operating costs (23% by 2020 and 32% by 2030 against current contracts). 2. Achieving ambitious levels of waste reuse and recycling by 2020: reducing disposal in landfills of biodegradable urban waste from 63% to 35% against the reference year of 1995; increasing the rate of preparation of waste for reuse and recycling from 24% to 50%; achieving a selective collection rate of 47kg/inhabitant/year. 3. Certification of sustainable forest management to help holdings and companies to adapt to environmental, safety and risk-prevention requirements: 450,000 ha of certified forest by 2020. 9

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Commitment to GREEN GROWTH 4. Increase renewable energy production (increasing the percentage of renewable sources in final consumption from 31% in 2020 to 40% in 2030) and foster self-consumption of energy, to reach 300 MW in 2020. 5. Reinforce energy grids in Europe, promote renewable energy export projects to meet European third -country targets and position Portugal as a gateway for LNG into the EU (the Iberian Peninsula’s current LNG terminals can replace 50% of Europe’s gas imports from Russia). 6. Promote electric mobility by extending the public network and making it more competitive, favouring charging at home and in the workplace and implementing sustainable mobility in public administration (through the introduction of 1,250 electric and plug-in hybrid vehicles for public administration use, as well as car-pooling systems by 2020). 7. Extend the use of public transport in city and inter-city travel by improving public transportation and introducing dissuasive measures against the use of private cars when public transport alternatives are available (such as city tolls to be used to fund public transport and high-occupancy lanes reserved for vehicles with more than one passenger). 8. Promote the sustainable use of metal resources – which may reach 1% of GDP and create 25,000 jobs by: > increasing mapping, knowledge and research of mineral resources; > promoting and attracting private and international investment to the sector and setting up a one-stop mining store; > drawing up a sectorial mining plan that establishes the location of geological resources, identifies limitations imposed by spatial management instruments and other legislation 10

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while expanding knowledge, strengthening risk analysis and reducing associated context costs. 9. Implement TEEB (The Economics of Ecosystems and Biodiversity) initiative in Portugal to quantify and remunerate the economic value of ecosystems services. 10. Create and introduce a natural.pt brand of products and services developed with resources from classified areas, drafting rules on membership and monitoring processes, joint management and international promotion. Fifty percent of companies operating in protected areas should have joined the natural.pt brand by 2020. 11. Significantly increase the share of urban renewal in construction works. This can be done via the Exceptional Urban Renewal Framework (RERU) which offers a seven-year exemption for buildings aged over 30 years from compliance with a number of rules that made restoration technically and financially impossible. Through the new EU funds which are part of Portugal 2020 totalling almost 1 billion euros (which can be maximised by interaction with other sources of funding), finance urban renewal and regeneration work in disadvantaged areas, abandoned industrial areas, social housing, public buildings and energy efficiency in private housing. 12. Within the framework of the ongoing spatial planning reform, ensure rational, efficient land use and limit urban expansion. Municipal master plans must contain all the planning rules. Eradication of land eligibility for building, simplification of procedures, introduction of a new economic and financial framework and encouragement of inter-municipal planning solutions. Maintain the current 5% of man-made landscapes until 2030. 11

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Commitment to GREEN GROWTH 13. Establish new classified marine areas (10% of total area by 2020), assuring sustainable exploration of live marine resources. 14. Strengthen our ports’ competitive capacity to attract traffic sailing in our EEZ and place Portugal on the route between Europe and the rest of the world. 15. Extend geo-tourism, eco-tourism and scientific tourism initiatives with potential for inclusion in the UNESCO European Geoparks network. 16. Set up a green growth fund by reformulating existing environmental funds and performing integrated management of highly substantial funding in the area of energy efficiency, water management and waste treatment (over 1 billion euros in European funds) with a strong catalysing effect. 17. Perform a green tax reform in the framework of a neutral taxation system in order to: diversify sources of revenue, foster eco-innovation and eco-efficiency in the use of resources, reduce dependency on energy imports, encourage more sustainable production and consumption patterns and boost entrepreneurship, employment and the economy. 18. Foster pilot disruptive technology R&D&I projects with a potential impact on sustainability and efficient use of resources. 19. Set up an ecological public procurement programme and ensure that sustainability criteria are included in all public procurement for the acquisition of goods and services. 12

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20. Ensure that the new iGeo portal publishes cartographic and georeferenced information so that it can be used or included in other information systems. This would include architectural heritage, natural heritage, geology, protected and conservation areas, municipal master plans and land use charts. In short, this is a strategic plan that is sufficiently detailed to ensure ambitious, stable, predictable policies but also open enough to accommodate different implementation models. The aim of this Green Growth Commitment is to make Portugal a global role model for green growth. It therefore sets short- and medium-term targets that are demanding and ambitious but still achievable with a will to reform and everyone’s involvement. It is up to us to play our part. 13

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