Addressing Climate Change and Achieving Environmental Protection in the Energy and Mining Industries

Context

The extraction of non-renewable geological resources such as oil, gas, metals and minerals is a major segment of the global economy. Much of the world’s population lives in countries that are rich in oil, gas and minerals. It is estimated that requirements for steel will grow by 90% between 2010 and 2030, for copper by 60%, and demand for aluminium will more than double. According to the United Nations Environment Programme (UNEP), the world relies heavily on natural resource exploitation, and demand keeps growing. These are because:

• Mineral extraction plays a dominant role in the economies of 81 countries, which account for a quarter of global GDP, half the world’s population and nearly 70 per cent of those in extreme poverty.
• The formal mining sector employs more than 3.7 million workers. Up to 100 million people make a living from artisanal mining. In the informal sector, 10-15 million miners are estimated to be engaged in artisanal gold mining in more than 70 countries, creating approximately 1600 tonnes per year of mercury emissions and releases to the environment.
• If current trends continue, the world will require 180 billion tonnes of material every year to meet demand by 2050, including for green technologies.

However, these benefits come at a cost. Many resource-rich countries, communities and NGOs have often spoken out against extractive projects that brought few, if any, socio-economic benefits for local populations. Questions have been asked why a global development model based on the ever-growing reliance on the extraction of finite natural resources have been adopted globally, at the expense of other more sustainable, carbon-neutral and equitable models of development. Oil, gas and mining companies are now being asked to disclose information on the social, environmental and climate costs associated with their projects.

Climate change, as we all know is the most complex, existential and urgent global issue to date. This is due to its potential impacts on both the environment and humanity. It, therefore, requires policies and measures to address those impacts. Climate change will also impact the extractives sectors in several ways, generating both threats and opportunities.

The impacts of climate change and its mitigation require changes to our ways of life, and our economic development approach into the twenty-first century and beyond.

Environmental Impacts of Extractive Industries

The central question is whether we can, or rather should we leave the extractive resources in the ground. On the one hand, certain mineral and metal resources are essential for green technologies such as renewable energies and electric mobility. With regards to a successful energy and mobility transition, it will be difficult to leave these resources in the ground until reliable technological options are available. When coming to this conclusion, it is essential to address a variety of pressing issues along the mineral and metal supply chain to make mining more sustainable. These include governance and management challenges as well as human rights and environmental risks. We shall come to these later.

On the other hand, fossil resources contribute heavily to global warming when they are extracted and when they are burned. Therefore, coal, oil and natural gas need to be unextracted in order to contribute to the long-term goal to decarbonize the global economy. However, central questions are still up for debate in deciding when, where and how much of them could be left untouched.

Greenhouse gas emissions, pollution and biodiversity loss are just some of the threats extraction poses to human health and the environment. Extractive activities can also fuel conflicts and threaten human rights if certain safeguards are not met or if they are poorly managed.

Decades of irresponsible mining and oil and gas exploration have produced devastating effects in many developing countries, on local environments and communities, and on the climate:

• Gas flares in Nigeria, Russia, Middle East, Kazakhstan and other areas of oil extraction burn constantly, emitting thousands of tonnes of toxic emissions. This results in high levels of atmospheric pollution, which damages crops, and causes severe health problems. Oil and gas pipeline construction damage the environment and exhausts scarce resources, such as land, fishing grounds or forests, which are critical for the livelihood of local populations.
• Pipeline construction in developing countries correlates with an increase of infectious diseases, including HIV/AIDS, and social problems such as prostitution and human trafficking.
• Oil refineries and oil depots continuously fail to live up to environmental, health and safety standards.
• Onshore and offshore drilling platforms and artificial islands in, for example, the Niger River Delta, the Amazon River, the Congo's rainforests, the Caspian Sea and the North Sea, have damaging impacts on biodiversity.
• Thousands of hectares of Canadian boreal forest are being cut down to allow for tar sands exploration in Alberta. The process of oil refining from tar sands produces three to five times more greenhouse gases than conventional oil.
• In the US, the process of extracting shale gas, known as hydraulic fracking has led to groundwater contamination with toxic chemicals, as well as high levels of radioactivity.

International and private financial institutions continue to co-finance the investments of major fossil fuel companies, despite their well-documented and destructive impacts on people and the planet. These investments undermine institutional commitments to social and environmental sustainability criteria, poverty reduction, development and renewable energy.

Uganda appears set to intensify energy, oil and gas, and other mineral exploitation to spur economic development, but this should not be at the expense of the environment in resource-rich areas. Uganda is attempting to attract firms that will invest responsibly in the oil and gas, energy and mining sectors and add value to the natural resources. Yet there is no doubt that some of the future contentious issues of this eventually huge change in the country’s strategic plans, regional mining status and economic fortunes, will be the socio-economic impacts and effects on the environment, of mining and mine-based industrial development.

Given that most of the mining and resource extraction plants and operations will be in the rural areas, and considering Uganda’s age and gender demographics as well as cultural practices, mining will mainly affect the women and children in those mineral-rich areas. As such, wide-reaching and impactful community-specific development initiatives that target the livelihood of women and children need to be made a mandatory part of resource developers’ and mining companies’ proposals for each resource and mine development, processing, extraction, refining and value-addition project. This will minimise resource-related conflicts in resource extraction areas more so for Uganda where more economic and developmental uses of land are being adopted and the cultural value-systems do not match the new economic realities.

In Uganda, the main local environmental impacts include the contamination of water, soil, and air by a variety of heavy metal toxins. When these toxins are present in water, soil, and air, they can have adverse health effects on people through drinking contaminated water, eating food grown in contaminated soil, and breathing contaminated air. One heavy metal toxin, in particular, is a large problem for districts in Uganda with a prominent mining sector. The processing of ores in mining tends to release mercury, and strict precautions must be taken to manage it as even trace amounts are harmful to human health.

However, mercury is used frequently in artisanal and small-scale mining in Uganda to assist with the extraction of gold. This poses a large problem as very few miners are aware of how mercury released into the environment can impact human health. It is estimated that about 150kg of mercury is released in the environment annually. If dumped into water bodies, mercury can transfer downstream and become present in areas even where there is no mining. Since mercury is a pollutant that persists in the environment, it bio-accumulates in the environment and increases its concentration in living organisms as it moves up the food chain. Other pollutants that can pose health concerns and arise from mining include arsenic and cyanide. Cyanide is also widely used in artisanal and small-scale mining methods in Uganda.

Climate Change Impacts

Energy and extractive industries are major contributors to climate change since they are responsible for extracting the natural resources whose consumption and extraction release carbon dioxide into the atmosphere. Even metallic mining such as silver and iron contribute to climate change given the energy needed to extract it, transportation to another country or region where it is processed and then sold.

Extractive industries affect more than the health of the planet. They affect the health of our communities too. Air pollution is impacting human health. Gas flaring from oil wells, and dust from mining sites is a significant source of air pollution. Artisanal and small-scale gold miners often use mercury to draw out pure gold from the ore, and in so doing are estimated to account for more than a third of all anthropogenic mercury emissions, or roughly 700 tonnes per year of mercury emitted to the atmosphere. But when much of the infrastructure of the extractive industry is concentrated near low-income communities, its effect on these communities and their residents becomes massive.

Globally, countries are experiencing extreme and damaging weather events. These climate vulnerabilities are increasing operating costs for natural resource extraction. Climate change has the potential to induce negative environmental and social shocks in communities, which can disrupt the needed labour force in extractive industries. Therefore, while many extractive industries may not publicly state the climate change risks, they will openly mention increasing costs of natural resource extraction today.

Addressing Climate Change and Achieving Environmental Protection

A ‘net zero carbon’ future presents some opportunities for the extractives industry. Low-carbon energy technologies require certain metals and materials, and these needs are higher than those for traditional fossil fuel technologies. This is likely to result in increased demand for certain minerals and metals in the future. Shifting to a net zero carbon future will also require large investments in new infrastructure — such as non-carbon power providers (e.g., hydro and nuclear), renewable power technologies (e.g., wind turbines and solar panels), zero emission buildings, hybrid/electric transportation vehicles and alternative transportation modes (e.g., rail). Minerals and metals will play a key role in the transition to a significantly lower-carbon future.

UNEP has outlined several actions to be undertaken by governments, operator and civil society to enhance sustainability in energy, mining and oil and gas sectors as follows

Governments

Governments must commit to strict waste management and mine tailings disposal policies, laws and regulations, which give authorities the power to terminate operations if proper waste management systems (e.g. terrestrial storage facility) are not in place. The must adopt coherent and cohesive legislation and principles, which clearly lay out the conditions for when an Environmental Impact Assessment (EIA) must be triggered. Furthermore, governments must commit to identifying and addressing governance, legal and regulatory harmonization problems by the means of Strategic Environmental Assessments (SEA). This would help avoid the so-called “pollution haven effect” – having extractive (and other polluting) industries move operations in jurisdictions with less stringent environmental regulations.

Governments must provide community grievance mechanisms and adopt and enforce the Polluter-Pays Principle (PPP) in order to hold polluters liable for damage to protected species or natural habitats. It is advised to adopt approaches and mechanisms, which could further facilitate a balance between extractive industry development and environmental preservation by complying with multilateral agreements such as the United Nations Framework Convention on Climate Change; African Convention on the Conservation of Nature and Natural Resources; Convention on environmental impact assessment in a transboundary context (ESPOO Convention); International Convention for the prevention of pollution from ships; and the Geneva Convention of the continental shelf (1958) amongst others.

It is the responsibility of governments to promote the Extractive Industries Transparency Initiative (EITI), Publish What You Pay (PWYP) and other transparency initiatives, particularly those which relate to environmental management and pollution. Governments must invoke the precautionary principle with large-scale and risky operations (e.g. offshore drilling), and enhance coherence between market-based standards, due diligence processes and certification schemes with legislation and regulation in both countries of production and countries of consumption to ensure environmental responsibility from source to destination (e.g. so called “conflict minerals”)

Extractive private sector

The players in the energy and extractive sectors must promote and adopt best practice and codes of conduct on tailings management, sustainable decommissioning and closure of disused mine sites. The must advance transparency and information sharing (e.g. EITI) – and particularly sharing information about their environmental performance and systems with affected communities.

It should be obligatory for private sector operators in this sectors to commit to effective utilisation of community grievance resolution mechanisms. Pledge to conform to the Polluter-Pays Principle, bounding to remedy fault-based environmental damage by paying for the costs associated with an activity, and to abide to guidelines on international best practice (e.g. IFC Guidelines). They must integrate and adopt (where applicable) the precautionary principle into internal processes and to mainstream environmental risk management into their supply chain due diligence.

Medium and large scale mining sector operators must adopt energy efficiency programmes (such as waste heat recovery units (WHRU), employee training, regular maintenance checks, energy efficient equipment, demand management, etc.). Ensure safe management of chemicals (notably cyanide) that are used for the recovery and processing of ores, and increase the recycling rate of minerals, and provide information and data on the availability of recycled materials

Civil society and international organizations

Civil society and international organizations should work to enhance awareness of the impacts from the extractive industry and the global economy through information sharing mechanisms and compulsory environmental awareness training for key stakeholders involved in the extractives space – industry/private sector and government. Provide further knowledge, data and support monitoring around environmental risks, impacts and benefits from the extractive sector, thereby increasing the connection between governments and industries to manage the coexistence of extractive and other land uses and make informed decisions and trade-offs.

Civil society and international organizations should encourage further transparency and access to information on environmental and social risks, and work with the government to manage and direct revenues from extractive activities towards sustainable development and environmental services. It would be imperative for these organisations to support research and promote best available technology in the production chain including for methane pollution reduction, water use and tailings. Addressing resource scarcity and stranded assets by providing more accurate scenarios on demand and supply that are ecologically viable and integrate societal needs and constraints, and engaging with companies to improve their indicators, mitigation hierarchy and monitoring systems, would be desirable.

The Role of Virtual University of Uganda, Kampala

Education is key in mitigating the effects of climate change and environmental impacts of energy, oil and gas and other extractive activities. The Virtual University of Uganda, Africa’s premier postgraduate only online licensed university has taken the lead in this regard. The university runs postgraduate degree courses in environmental management and sustainable oil and gas management (with a key module on Environmental and Cultural Impact of Oil and Gas Production).

The university’s Master’s programme in Energy, Environment and Climate Justice (awaiting accreditation) is the first of its kind in Africa. It is designed to give students a deeper understanding of the inter-relationships between the environment and topics such as energy systems, climate change, business strategies, and policy. It focuses on energy auditing, environmental auditing, assessment and management procedures, and low carbon strategies required by industrial and commercial bodies, governments and society. It also gives an overview of various policy developments that have driven and will continue to drive the energy transition, as well as how the private sector is responding.

Conclusion

The extractive industry – oil, gas and mining – drives economic growth across the world. As countries move towards low-carbon and energy efficient economies, somewhat paradoxically, the demand for the resources necessary for ‘green technologies’ (such as solar panels, wind turbines, electric vehicles) may rise.

Around the world the extractive sector is associated with a range of serious environmental challenges: land clearance and degradation; the use of dangerous chemicals; acid drainage from mine sites; the loss of biodiversity; intensive water use; pollution from poorly disposed waste; and dust and airborne pollution; as well as the contribution of mining to global climate change. These impacts almost never appear in isolation, and their cumulative, and even transboundary, impacts can severely affect entire landscapes and habitats.

There is increasing momentum in the private sector and government circles to improve environmental performance. Several major companies have committed to not operating in natural World Heritage Sites, and numerous voluntary standards on sustainable sourcing and environmental protections have been developed. Governments, meanwhile, are engaging with environmental experts to improve their policy and regulatory frameworks of the sector.

The consequences of climate change in this respect could be dire and it is possible to reduce the environmental impacts of mining. This will be crucial for Uganda as she tries to develop the energy, mining, and oil and gas sectors. It is imperative to conserve the ecosystem goods and services of the environment at the same time. For extractive activities to become more environmentally sustainable, certain measures can be taken. These include reducing the consumption of water, minimizing the production of mining waste, preventing the pollution of soil, water, and air, and conducting successful mine closures and participating in environmental remediation of disused mine sites.

References

Amnesty International (2016). This is What We Die For: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt. London

Amnesty International Aurora Energy Research (2017). The Carbon Price Thaw: Post-Freeze Future of the Great Britain Carbon Price. Oxford: Aurora Energy Research.

Balcombe, P., K. Anderson, J. Spiers, N. Brandon, and A. Hawkes (2017). ‘The Natural Gas Supply Chain: The Importance of Methane and Carbon Dioxide Emissions’. ACS Sustainable Chemistry and Engineering, 5(1): 3-20.

Climate Strategies (2014). Carbon Control and Competitiveness Post 2020: The Steel Report. Berlin: German Institute for Economic Research.

Dietsche, E. (2017). New industrial policy and the extractive industries. WIDER Working Paper 2017/161. Helsinki: UNU-WIDER.

Ferreira, F., C. Lakner, and C. Sanchez (2017). Against the Tide: A Look at the Countries where Poverty Has been on the Rise, Despite Falling Global Numbers’. Washington DC.: World Bank.

IPIECA (2015). The Paris Puzzle: The Pathway to a Low-Emissions Future. London: International Petroleum Industry Environmental Conservation Association.

IRP (2017). Green Technology Choices: The Environmental and Resource Implications of Low-Carbon Technologies - A report of the International Resource Panel. Nairobi: United Nations Environment Programme.

Lazarus, M., K. Tempest, P. Klevn?s, and J.I. Korsbakken (2015). Natural Gas: Guardrails for a Potential Climate Bridge. Stockholm: Stockholm Environment Institute.

McCulloch, N. (2017). ‘Energy Subsidies, International Aid, and the Politics of Reform’. WIDER Working Paper 2017/174. Helsinki: UNU-WIDER.

Nanivazo, M. and K. Mahrt (2016). ‘Growth and Poverty in the Democratic Republic of Congo: 2001 through 2013’. In C. Arndt, A. McKay, and F. Tarp (eds.) Growth and Poverty in Sub-Saharan Africa. Oxford: Oxford University Press for UNU-WIDER: 421-445.

OCI (2017). Dirty Energy Dominance: Dependent on Denial – How the US Fossil Fuels Industry Depends on Subsidies and Climate Denial. Washington DC.: Oil Change International.

OECD (2013). Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas. Paris: Organization for Economic Co-operation and Development (Second Edition).

UNEP (2009) Towards Sustainable Production and Use of Resources: Assessing Biofuels. A Report of the Working Group on Biofuels to the The International Panel for Sustainable Resource Management. Bringezu, S., H. Schütz, M. O′Brien, L. Kauppi, R. W. Howarth

UNEP (2010) Anthropogenic Metal Stocks: Scientific Synthesis. A Report of the Working Group on Global Metals Flows to the International Panel for Sustainable Resource Management. Graedel, T. E., Gerst, M. D., Dubreuil, A., Hashimoto, S., Müller, D., Pena, C., Rauch, J., Sinkala, T., Sonnemann, G.

UNEP (2011). Bridging the Emissions Gap: A UNEP Synthesis Report, Nairobi: United Nations Environment Programme.

UNEP. (2011). Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, UNEP.

USGS (2017). Mineral Commodity Summaries 2017. Reston, VA.: US Geological Survey, Department of the Interior.

Zenghelis, D. and N. Stern (2016). ‘The Importance of Looking Forward to Manage Risks: submission to the Task Force on Climate-Related Financial Disclosures’. Policy Paper. London: ESRC Centre for Climate Change Economics and Policy/Grantham Research Institute on Climate Change and the Environment.