Tackling the climate crisis means reducing greenhouse gas emissions, and in this regard, the transition to renewable energy is essential. Billions have been invested in projects to boost wind and solar power generation worldwide.
However, many projects are based on misplaced priorities. In Tierra del Fuego, the southernmost tip of Argentina (and, therefore, of the world), a 33-megawatt wind farm was proposed as a sustainable way to reduce dependence on gas and improve access to energy in the province. It would have been the Asian Infrastructure Investment Bank’s (AIIB) first funding for the country, amounting to USD 65 million. But it was cancelled earlier this year, not because of its social or environmental risks, but because the Argentine government failed to provide the guarantees required for its financing.
Our analysis revealed that the project had shortcomings in terms of the transparency of its public engagement. Although the bank stated that “meaningful consultations and stakeholder engagement were conducted with local communities”, and despite claims by those close to the project that public hearings and meetings had taken place, we found no official or public evidence to confirm that effective public participation had occurred.
The report was produced by the Argentine organisations FARN (Fundación Ambiente y Recursos Naturales), CAUCE (Cultura Ambiental, Causa Ecologista) and Fundeps (Fundación para el Desarrollo de Políticas Sustentables).
The wind farm project also raised concerns about potential adverse environmental impacts. The AIIB noted that the construction and operation of the eight turbines could have caused habitat fragmentation, as well as generating dust emissions and solid waste. Risks to wildlife were highlighted, such as the obstruction of migratory species and bird collisions, and that the project could have affected the nearby Tierra del Fuego Atlantic Coast Reserve, a wetland of international importance. Our report noted that any impact could have been exacerbated by the wind farms already operating in the region.
But in the end, it was the absence of a sovereign guarantee, rather than these legitimate environmental concerns, that prevented the project from going ahead. This guarantee would have covered investors against financial risk, placing the burden on the Argentine state.
The energy transition must be conceived within a participatory and transparent framework, with the aim of transforming the current energy system into one that is truly sustainable. Given the need to transform energy and financial systems, the energy transition is being driven in part by financial institutions and corporations, and this is how traditional energy and business models persist without reflecting the necessary transformations.
The urgency of the transition does not justify a model designed to maximise economic or financial gains that may generate high levels of public debt, which tends to exacerbate inequalities. On the contrary, it must form part of sustainable development, with the aim of transforming the energy system in a fair manner, respecting nature and guaranteeing the rights of communities.
The AIIB project must also be considered from a geopolitical perspective and in the context of China and the United States jostling for position in a strategic area. The province of Tierra del Fuego is the point on the continent closest to Antarctica, a region of unexplored natural resources and of great scientific and environmental value. Its geopolitical importance is reflected in a series of visits to the region by US military commanders and naval exercises in Ushuaia, the provincial capital, since the current Argentine president, Javier Milei, took office. China, for its part, has shown great interest in building a port in the region.
At the same time, the struggle for control and monopolisation of energy value chains is intensifying. This extends from the primary level of resources – whether fossil fuels or renewable energies – to associated services and technologies. Simultaneously, wars are being provoked, and rights, international norms, and spaces for dialogue and exchange are being ignored and trampled upon. Geopolitical competition between states and large corporations to secure the status of strategic suppliers remains paramount.
For the energy transition to be fair, it must take place with full respect for human, economic, social, cultural and environmental rights, as well as biodiversity. The processes to address it must be gradual, participatory and democratic.
The transition must promote decentralised and diversified models, not merely the replacement of one energy source with another, as proposed in The Energy Transition in Argentina, a book published in 2022 by researchers Maristella Svampa and Pablo Bertinat. If the transition is not approached holistically, it will not be socio-ecological. We must think about changing the energy model beyond simply reducing emissions. We cannot allow the energy transition to be dictated by the interests of international finance. International funding for renewable energy must be accompanied by social justice and clear channels of communication with local communities.
