Office of the State Comptroller and Ombudsman מדינת ישראל STATE OF ISRAEL ENVIRONMENTAL AUDIT 2008 Office of the State Comptroller and Ombudsman Office of the State Comptroller and Ombudsman

Office of the State Comptroller and Ombudsman Comptroller’s Audit The state comptroller of Israel participates in the European comptroller’s assignment of the organization EUROSAI, which deals with climate changes – global warming and its effects. This presentation will provide Israel comptrollers’ highlights in the frame of the planned auditing.

Office of the State Comptroller and Ombudsman PM Ariel Sharon speaks on the phone with Ilan Ramon in the space shuttle "Columbia" (21/01/2003) PM: I would like to know what you see from there which we do not see from here? IR: We see our earth – it is beautiful, really beautiful, but what is more interesting is that the atmosphere is very thin. This atmosphere that protects us and enables us to live is really thin... And I think that we need to protect it as most precious. PM: We heard what you said, issues that obligate all of us.

Regional climate changes Office of the State Comptroller and Ombudsman Regional climate changes • A regional warming trend started from the 70's. The average temperature is likely to increase by 1.5°C between the end of 20’s century and 2020; and by 3.5-5°C till 2100. A likely decrease of 10% in the precipitation till 2020, and decrease of another 10% till 2050. The Mediterranean Sea level has risen by 8.5 cm during the last 16 years. Water sources have become more limited and more salty, emphasizing the need for desalination

Greenhouse gas emission in Israel Office of the State Comptroller and Ombudsman Greenhouse gas emission in Israel The rate of CO2 emission was higher than 70 million tons in 2004. This is minor w.r.t. developed countries but similar per person. Most of the greenhouse gas results from burning of fuels for energy creation, electricity and transportation.

Israel's activity in the framework of the climate treaty Office of the State Comptroller and Ombudsman Israel's activity in the framework of the climate treaty Israel ratified the United Nations Framework Conversion on Climate Change – UNFCC in 1996. Israel signed on Kyoto protocol in 1998. While Israel is viewed as an undeveloped country by the treaty, its CO2 emission rate is similar to that of the developed countries.

Israel's activity in the framework of the climate treaty (cont) Office of the State Comptroller and Ombudsman Israel's activity in the framework of the climate treaty (cont) As an undeveloped country, Israel is not committed to any reduction of CO2 emission. Nevertheless, Israel would like to take part in the effort to reduce greenhouse gas. According to the clean development mechanism – CMD, local projects, which reduce emission, produce "rights of emission reduction” that are merchantable, and raise the economic profitability of the project

Air pollution aspects related to the State Comptroller Office of the State Comptroller and Ombudsman Air pollution aspects related to the State Comptroller

I) Auditing of Israeli Standards, Laws & Regulations Office of the State Comptroller and Ombudsman I) Auditing of Israeli Standards, Laws & Regulations The relevant legislation is too slow. Only in 2007, the law of protection of the environment was modified to include "the pollutant pays“. Fines were imposed on polluting entities, which amount up to 4 times the economic profit that could be obtained from the pollution.

I) Auditing of Israeli Standards, Laws & Regulations (Cont) Office of the State Comptroller and Ombudsman I) Auditing of Israeli Standards, Laws & Regulations (Cont) • Only in July 2008 the "clean air" law was ratified – the law defines the authority and responsibility in the field of air pollution of the minister for the environmental protection. The law defines maximal quotas of environmental air pollutants. It orders manufacturers to prepare and to execute programs for reduction of air pollution, and obligates factories to obtain a “certifications for emission”. Heavy fines and prison punishments can be imposed on the offenders of the law.

II) Auditing of Enforcement, Execution & Implementation Office of the State Comptroller and Ombudsman II) Auditing of Enforcement, Execution & Implementation Are the laws being enforced? are they effective?

III) Auditing of Implementation and Efficiency Office of the State Comptroller and Ombudsman III) Auditing of Implementation and Efficiency Until recently, there was no primary law that includes all aspects relating to the protection of air quality. Instead, there were various orders under the responsibly of different government offices (with potential conflicting interests), which did not provide a response to the full complexity of the problem. • The orders created multiple authorities, causing a delay and complication of any initiative on preventing air pollution. 12

III) Auditing of Implementation and Efficiency (Cont) Office of the State Comptroller and Ombudsman III) Auditing of Implementation and Efficiency (Cont) The new "clean air" law, leaves the responsibility of prevention of air pollution on the Environment Protection Office – a junior office with weak political power. From 2003 the office's budget has decreased to 0.08% from the state budget. 13

Budget growth of the Environment Protection Office 1990 - 2006 Office of the State Comptroller and Ombudsman Budget growth of the Environment Protection Office 1990 - 2006 14

III) Auditing of Business Aspects Office of the State Comptroller and Ombudsman III) Auditing of Business Aspects • Environmental issues generate a global market of about 570$ billion a year. In the next 5 years, the anticipated increase 5%-8% in under-developed countries and 1%-3% in the developed ones. Currently, the environmental industry in Israel manufactures at over 300$ million a year. Israel is viewed as generating a breakthrough in the development of novel environmental protection technologies. 15

Potential National Profit from Environmental Protection Investments Office of the State Comptroller and Ombudsman Potential National Profit from Environmental Protection Investments • Israel can become a world leading environmental technology center of excellence. New energy conservation projects can bring a reduction in electricity production costs, improvement of air and environment quality and reduction of dependency in foreign countries’ oil. Increase in environmental technology manufacturing and export will create more jobs. 16

Potential National Profit (Cont) Office of the State Comptroller and Ombudsman Potential National Profit (Cont) Technological infrastructure improvement, and increase in internal and external financial investments. Strengthening the status and reputation of Israel as an environmental technology expert, especially in countries where Israel has significant presence: India, China and former Soviet Union states. Advancement of strategic international partnerships including our neighboring countries, for the purpose of building mutual trust and economic ties. 17

Office of the State Comptroller and Ombudsman Summary • In spite of the technological and economic potential in environmental protection, the comptroller’s auditing suggests that Israel and the Israeli economy did too little for participation in the challenge outlines by the Kyoto protocol. Future opportunities still exist. The comptroller’s auditing attempts to be constructive and to lead to further advancement of environmental protection activities. 18