The Ministry of Environmental Protection and Agriculture Taking Steps to Promote a Green Economy in Georgia – The FINANCIAL

“The Ministry of Environmental Protection and Agriculture has plans to promote a green economy in the country. We have received several regulations in the current year, which apply to waste management, air pollution and the protection of other environmental issues.”
The Ministry of Environmental Protection and Agriculture plays an important role in shaping the green economy. Projects implemented at the executive level assist the business sector in promoting environmental activities; public-private partnership is the most important in this regard.
In an interview with The FINANCIAL, Levan Davitashvili, Minister of Environmental Protection and Agriculture, spoke about the achievements and challenges in terms of the green economy in our country. In addition, he noted the future plans that are on the agenda of the Ministry to promote the development of green business in Georgia.
Q. What is the impact of Georgian business (emissions) on the environment?
A. Naturally, any business has an impact on the environment. Both in Georgia and in the world there is no economic activity that does not have an impact on the environment. The biggest impact factors in Georgia are the transport, construction and industrial sectors. But of course, from the point of view of the environment itself, climate change also affects the environment and it is very important to take care that businesses are responsible, are greener, and have less of an impact on the environment.
Q. Can you provide the number of deaths per year associated with pollution in Georgia?
A. Unfortunately, statistics on the number of deaths due to environmental pollution are not produced in Georgia, although there are some studies by the World Health Organization, on which the country relies, but in the future these statistics need to be improved for more accurate information. We are working with the Ministry of Health to do this, but it is also very important to monitor pollution in general, which affects human health, and in this regard the country is doing a lot for better, more comprehensive information, and at the same time to make it available to the public.
Q. Which businesses have the worst impact on the environment?
A. The businesses that have a relatively greater impact on the environment are primarily the construction and industrial sectors, at the same time in the industrial sector we can distinguish the metallurgical sector, mainly steel and ore processing. The transport sector also has a significant impact, as mentioned above, as one of the main polluters. Accordingly, our policy is to make the activities of these businesses more accountable in order to reduce the impact on the environment.
Q. What is the Ministry of Environmental Protection and Agriculture of Georgia doing to promote green business?
A. Promoting green business is certainly very important; it is also part of the sustainable development plan that every country has for 2030. This is one of the responsibilities of Georgia in the Association Agreement with Europe. Therefore, we are in constant communication with business to implement green principles in the country, but this is not limited to talking; we are also working with the UN Economic Commission, the European Commission, on a specific strategy to encourage different directions of green economy in the country: the principle of circularity; organic agriculture, etc.; and using renewable energy to make our environment and economic development greener.
Q. What have been your main achievements in green business development in the period of 2019/2021?
A. 2019-2021 has been important for the development of the green economy and green businesses in particular. Georgia is working intensively with the Green Climate Fund, which provides funding for various green initiatives in the country. Through the Green Climate Fund, we have launched a new project in the public sector that allows us to prevent and monitor natural disasters. We have also started to develop specific economic sectors, including sustainable forestry. This is a new, important project funded by the Green Climate Fund. We have also made progress in our relationship with the Green Climate Fund in the sense that one of the private, commercial banks, TBC, has already managed to obtain accreditation as an implementing partner.
The Energy Development Fund, which is part of the Ministry of Economy, also managed to be a direct implementing partner. Apart from the international organizations that are already represented in the country and help the country to use the resources of the Green Climate Fund, if Georgian actors were to be more directly involved in all this, I am sure we would be able to have more financial access in this regard. The introduction of sustainable public procurement principles in cooperation with Europe, which took place with the Procurement Agency, can also be considered an achievement of the period of 2019-2021. This is a very important part of promoting green business in public procurement. This is one of the tools that will give green business even more motivation in the future. We have also reached an agreement to create specific monetary mechanisms to encourage green business decisions.
In particular, we want to introduce a state system regarding carbon emissions, in which our Swiss partners will help us; there is already an agreement on that. An agreement was also reached with the National Bank to issue green bonds specifically. Hence much was done in the country in 2019-2021 to encourage green business initiatives in the country; to create specific monetary instruments. In the following period, I think we have created a good basis for making all this large-scale.
Q. How would you evaluate the overall ‘green business’ situation in Georgia?
A. I think that the urgency of green business in the country has been recognised; the responsibilities of businesses have started to be made public. This is very important and is probably the result of the constant communication that the Ministry has with the private sector. However, it can still be said that green business in Georgia is at an early stage. There is a lot to be done to make our enterprises more environmentally responsible and use technologies that have less of a negative impact on the environment, reduce emissions, use renewable energy sources and so on. I believe that steps have been taken, certain regulations have been defined at the policy level, and there is a certain legal framework and basis for business to develop in this direction, although all this will probably take time with significant cooperation between the private and public sectors.
Q. What are the main challenges you see in terms of green business development in Georgia?
A. I think that there are two important challenges for businesses to develop green areas in Georgia: first of all access to finance. In general it is not only an obstacle for the development of green business, but also one of the challenges in all sectors of the economy is insufficient financial resources. By this I mean the general capital shortage in the country because virtually every business initiative in our country is mainly financed by bank credit resources. The capital market is still in its infancy.
Here, state, grant or other types of co-financing are of great importance, which encourage this or that direction. This way we will have to work with donors in the development of green business in order to provide more financial resources to the business and introduce new technologies that will be more sustainable.
The second part is also no less important, it is the general lack of competence and lack of knowledge. We are working intensively on this. We have the Environmental Information and Education Center, which is the main communications agency in talking to the private sector. We also have problems with perception, because business is not fully aware of green priorities, but at the same time there is already a lack of competence in the case of perception to implement all this. Three of these important challenges should probably be singled out: these are access to finance; there is the problem of perception and awareness in general; and then competencies and qualifications.
Q. When companies try to become sustainable, what is the hardest part for them? How are you supporting them?
A. In order for business development to be more sustainable and greener, they need access to new technologies. This as I mentioned is largely related to the investment opportunities of the business, which are often limited. We can still say that more sustainable and newer technologies around the world are more expensive than outdated technologies. Perhaps with technological progress this situation will change, but today we understand that an important role here is played by the state in general and also the international community to motivate businesses to use new, more sustainable approaches in running their businesses and therefore compensation must be provided.
Among them, we mentioned that the monetary mechanisms that are necessary to introduce this will help businesses to become greener. Also, the regulations that we have already adopted or should adopt in the framework of the association with Europe stipulate that their activities should be generally more sustainable, less waste-generating, more focused on renewable resources. Consequently, waste management, recycling, and technologies in general need to be more sustainable and of course we will need investments and financial resources to achieve all of this.
Q. What role does public-private partnership play in the development of green business?
A. I think it is important for the public and private sectors to work together to get the results we all want. For the development of businesses it is necessary to stand by the state and vice versa. In order for the state policy to be implemented and for us to achieve the indicators that are set in the various plans and declared, to achieve the indicators, it is necessary for the business to consistently follow and fulfil the state policy. Consequently, public-private partnerships are very important. A concrete example I can give you is that the state together with the company Nitrogen, which is the largest chemical enterprise in the country, and which accounts for a large part of nitrogen emissions – 5% of the total greenhouse gases in the country, has managed to reduce this as a result of private-public cooperation.
In particular, Georgia has received a grant from the German Government, which serves to prevent and eliminate these types of emissions. By installing new technologies we can reduce these emissions. Of course, the readiness of the company to co-finance and make relevant investments was of great importance here. The grant assistance is half a million Euros, however, a total of more than one million Euros will be implemented in the project and we will have a significant reduction in all our contributions related to greenhouse gases as a result of a successful private-public partnership.
Q. What kind of fines or limitations have been imposed on companies found to be having a negative impact on the environment?
A. Appropriate sanctioning policies are very important to get better results in terms of environmental impact. There should be sanctions and fines that will have a deterrent effect. We often faced a problem when the legislation was not adequate. Although we fined companies, we could not get results because companies often chose to pay fines that were not commensurate with their performance.
Consequently, we have actively started working on a new package of legislation in 2020, in which we have worked closely with civil society, the population and also Parliament, and adopted new sanctions on air pollution, which is a very big and very important decision. In case of the recurrence of large fines, the Department of Environmental Supervision has the right to take a tougher step against such polluting enterprises, in particular to suspend their activities, which of course already has a deterrent effect. I am sure that within 1 year it will give us a significant result in the elimination of the same air pollution.
Q. Do you think that existing law is effective in terms of protecting Georgia from environmental offenders?
A. In March of this year, Parliament adopted a new law on environmental responsibility. This is a completely new European approach to the implementation of environmental responsibility in general. It is fully in line with the requirements of the European directive. The Ministry has done important work on this and I think that one of the biggest and most visible achievements is the adoption of this new legislation. Although with the passing of the legislation we have a fairly large agenda of enactment and the need to increase capacity in the Department of Environmental Oversight, with the recruitment of numerous new, competent staff. All this will be done in order to implement the principles introduced by this legislation. It is the unified position of the Government that we have priorities in this direction and therefore budget funding is provided for this in the coming years. This implies that the polluter pays. According to the principle, environmental responsibility is managed in the country. In particular, there will be financial guarantees and responsibilities to eliminate these problems if there are facts of pollution and significant impact on the environment.
Our constant monitoring will allow us to determine exactly which enterprise is responsible for this or that pollution. All sources of emissions will be constantly monitored electronically in the enterprises, which will in fact be transmitted live to the Department of Environmental Supervision. Accordingly, the identification of the violator is already guaranteed and further steps are defined on how to eliminate this violation and pollution in general.
Q. What does the Ministry of Environmental Protection and Agriculture in Georgia do in order to improve the environment and reduce pollution? What are the main projects that you have implemented in this direction?
A. In order to maintain a clean environment in our country, the main tool of the Ministry of Environment and Agriculture is the Environmental Assessment Code, which establishes completely new principles in the country and sets requirements for businesses in relation to the environment. The new Code of Environmental Assessment is developed in accordance with European directives, which provides for the involvement of the general population in environmental decision-making; the participation of experts and civil society. It is a transparent process consisting of screening, copying and decision-making stages, as it is in Europe. Therefore, when launching any new activity, it is very important to have a full environmental impact assessment; to hold public hearings, assess all critical aspects – the impact on water, nature, air, biodiversity, etc. And of course to mitigate the measures and only then make a decision. That is, to give the right of activity to this or that business operator. This is the main tool headed by the Ministry. However, we have mentioned that in addition to this there are other legislative decisions that complement and impose certain responsibilities on existing operators. A number of legislative initiatives are in the plan. These are key policy areas to ensure that pollution is avoided in the country. Also as for the atmospheric air, in large agglomerations, in urban settlements we already have automatic stations everywhere that constantly monitor air pollution and this information is also public and the population can see it online. That is, monitoring is one of the most important priorities along with policy refinement.
Q. Does the Ministry of Environmental Protection and Agriculture in Georgia have other green plans it intends to carry out over the next few years?
A The Ministry of Environmental Protection and Agriculture has plans to promote a green economy in the country. We have received several regulations in the current year, which apply to waste management. Georgia has a waste management code based on European approaches. In order to implement this code it is very important to introduce the principles in practice that provide waste prevention and recycling. Consequently, enhanced obligations for manufacturers were determined for several sectors; 7 directions for the main pollutant actors, such as the use of residual oils, residual tires, electrical equipment, barriers, packaging materials, etc.
 
According to the main pollutant sector, specific manufacturers have been identified. They should ensure that they will remove their waste from nature. Specific indicators have been defined for the following years about what to achieve. This is very important for the encouragement of a green economy. Residuals should be presented as a new row and this is a very important element of a circular economy. The Ministry intends to enact these standards and establish such organizations that ensure the monitoring and achieving of these indicators, as well as the creation of a circular economy in the entire country, financially supported by the Swedish Government. We have invited the best leading experts who have worked on a circular economy in the world. The country will be one of the first of those who will have a plan for a circular economy. This is very complex and the main principle is that we use our country’s natural resources optimally. We will avoid excess generation of waste and use raw materials already formed. This relates to various industries including processing and agriculture. I think that these initiatives should be implemented in the next few years to speed up the economy’s green principles in the country.
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