Author: George Mangion - Senior Partner PKF Malta
Published on Business Today: 7th April 2022

During the 30-hour papal visit to Malta in the weekend, we were regaled with a perfectly choreographed programme that most locals will treasure for ever.

There were the usual evangelical incantations and prayers for the faithful but nobody could miss the warnings issued by Pope Francis to the political class.

Naturally his words have also to be taken in the shadow of the atrocious Ukrainian invasion and now the revelation of a massacre by Russian soldiers of civilians fleeing bombardments in Bucha, Ukraine.

The pope insisted: “We must fight greedy nationalisms and populism that lead to tragic wars. We must fight infantile autocracies and dictatorships. We have to fight injustice and famine. In his words, we must go for weapon disarmament and the money saved on weapons must be invested in developing countries...”

The invasion of Ukraine, which started ominously on 24 February, has now grown into a full scale war resulting in a widespread public aversion of everything associated with Putin‘s autocratic administration.

At the same time, the Bucha atrocity has caused global public opinion to temporally forget the threatening curse of climate change. But we cannot lower our guard against this global menace. The BBC this week reported the stern advice issued by members of the Intergovernmental Panel on Climate Change (IPCC).

There is no excuse - we must act globally. The IPCC has prescribed a rapid shift from fossil fuels over the next eight years. Perhaps the sanctions against the purchase of Russian hydrocarbons as a punishment for the Ukraine invasion may turn global attention to seriously invest in alternative sources of renewable energy and green hydrogen.

Solar, wind and other clean sources generated a mere 38% of the world’s electricity in 2021. For the first time wind turbines and solar panels generated 10% of the total. The wind and solar alternatives are now a real solution and with proper investment can offer a way out of the multiple crises that the world is facing, whether it’s a climate crisis, or the dependence on fossil fuels.

This year could be a real turning point. The share coming from wind and sun has doubled since 2015, when the Paris climate agreement was signed. The IPCC report says that some countries are moving ahead of others in switching to wind and solar structures.

At the top of the list are the Netherlands, followed by Vietnam which also saw spectacular growth, particularly in solar energy, which rose by over 300% in just one year. This spectacular drive has resulted in a fall in both coal and gas generation.

The IPCC says that rapid cuts in carbon from cars, home heating and almost every aspect of our lives will be needed over the next decade. They will also suggest the widespread use of carbon removal technology to limit dangerous warming. While planting trees is an important approach to this problem, technology is also being used to capture CO2 directly from the air.

Steve Oldham, CEO of Carbon Engineering, said, “Even if all the other measures that we’re taking to avoid emissions, electric cars, renewable energy, those types of things, even if those succeed, you still need carbon removal.”

Malta has not escaped the dire effects of climate change. There exists an undeniable fact pointing to the increase in carbon dioxide concentrations and other greenhouse gases, such as methane and nitrous oxide caused by daily activities - mainly due to the explosion in car ownership, more travel by sea and air, not to forget emissions from heavy industry. There is undeniable evidence that carbon dioxide has been on the increase during the past two decades.

Readers may expect this to be another article extolling the benefits of clean air resulting from an ideal solution costing millions - of efficient plants generating green energy. Yet, seriously, between 1990 and 2007, we have seen greenhouse gas emissions increase by almost 50%. It is time to start reducing such emissions in order to mitigate the effect of climate change but it is unreasonable to expect governments to get focused in this quest and dig deep into their pockets to reduce the impact of climate change.

We also have the problem of a gradual rise in sea levels. It is estimated that over this century, we will encounter sea-level rise of between 0.18m and 0.69m. In the case of Malta, this is of some concern since the east coast will be particularly hit, especially low areas such as Sliema, Gżira and Msida, among others.

It goes without saying that a sudden sea-level rise will particularly impact our economy - so dependent on tourism. The plus side of climate change is our geographical location. Malta enjoys good exposure to rays of the sun yet it has not succeeded in increasing the production of electricity from the use of photovoltaic panels to reach the 10% EU threshold.

But it is not all doom and gloom since the new Abela administration has promised a plethora of 1,000 initiatives in its political manifest for the next five years. To start with, it promised to grant a 30% subsidy on capital investments, rising to 40% for businesses in Gozo or investments in the environmental, renewable energy, digital, social, and educational sectors.

There are tangible fiscal incentives for companies that create green jobs: up to 75% of salaries paid for a period of time. Given the drive to render homes more carbon-neutral, there is a target to render all social housing carbon-neutral by 2030. A free energy audit is granted for micro and small companies, with tax credits if they implement audit recommendations.

The jewel in the crown is the super energy ministry pioneered by minister Miriam Dalli. It pledges to invest €700m investment in ‘green lungs’ projects and giving more weighting to carbon-neutrality when deciding on building permits.

The penny has dropped on land reclamation. Officially the State is declaring this to be “needed” and such projects will move ahead, including land sites for clean energy production.

The energy ministry will be working with the private sector to develop offshore renewable energy projects – floating wind and solar farms – and possibly attract investment from Qatar to start using the exclusive economic zone to produce green hydrogen.

In the words of Pope Francis, may the winds that buffet the island of Malta bring us joy and prosperity.

Author: George Mangion - Senior Partner PKF Malta
Published on Business Today: 7th April 2022
Get in touch: info@pkfmalta.com