Powerful ‘dirty’ ministries are hurting Latin America’s climate aims

Courting Chinese investment to develop high-carbon sectors has big long-term costs, experts say

While the world is discussing the path towards a new global economy based on lower carbon emissions, it’s still business as usual for economic cooperation between China and Latin America, according to Guy Edwards, co-director of the Climate and Development Lab at Brown University.

By continuing to invest in carbon-heavy sectors, the two partners are showing little regard for recommendations set out in the Paris agreement and could constrain Latin American countries’ ability to meet promised emissions cuts, Edwards told Diálogo Chino.

“Latin American countries should be explicit with the Chinese about the type of investment they want to receive and how these investments must be in line with the Paris targets and the Sustainable Development Goals (SDGs),” Edwards said.

“So far, China has been maintaining exactly the same kind of relationship with Latin America: a focus on access to natural resources, fossil fuels, and building large hydroelectric projects,” he added.

Edwards, who co-authored the book A Fragmented Continent: Latin America and the global politics of climate change, laid the blame for this ongoing relationship with the region’s “dirty ministries” – those that do not prioritise climate action in striking energy, infrastructure and agriculture deals with their Chinese partners.

Failing to consider Paris targets and SDGs at the negotiating table with China is not going to do anything to make Latin American economies more resilient, Edwards added. Therefore, they must be more proactive in putting forward concerns about climate impacts.

Regional concern

The impacts of climate change are a major region-wide concern in Latin America, according to Walter Vergara of the World Resources Institute (WRI).

Speaking alongside Edwards on the low-carbon transition at the Wilson Center in Washington DC recently, Vergara said the impacts of climate change could generate economic losses of US$100 billion per year if modes of production in the region are not altered.

“The region has all the elements to decarbonise their economies. Low-carbon actions are the best way to guarantee sustainable economic development. A future with fewer greenhouse gas emissions is possible,” Vergara said.

Latin America needs to decarbonise electricity generation, transport, and land use by restoring degraded areas and putting an end to deforestation, he added.

In a conversation with Latin American journalists on the Climate Interview Program, Vergara also criticised the “false dichotomy” between economic development and taking measures to tackle climate change.

Stressing the region’s great potential for generating energy from clean sources, Vergara suggested Latin America could be the “Saudi Arabia of renewable energy”. More than half the electricity generated in the region is renewable, with 52% provided by hydroelectric plants. In 2015 alone, renewable sources supplied 14 gigawatts of electricity to the region’s grids. Vergara advocated greater diversification of clean sources instead of strong reliance on hydroelectric power plants, which often require clearing forests to create reservoirs.

Vergara told Diálogo Chino it was essential that foreign capital investment, especially from China (since it is the largest investor in the region), respects natural capital.

“Chinese investment should not be the exception,” Vergara said. “On the contrary, given the large flow of capital from this country to the infrastructure sectors, there is an urgent need for the countries in the region to require that these investments do not directly or indirectly increase carbon emissions, and not cause losses to biodiversity, soil, or water quality,” he added.

If these concerns are not voiced during the formation of partnerships, there is a risk that Latin American economies will end up paying even higher costs in the long run, Vergara said, adding that the loss of natural capital cannot be compensated for by the advantages of short-term financial investment.