James Painter, Reuters Institute for the Study of Journalism, University of Oxford, discusses the report, Summoned by Science, which argues that climate change and other issues such as biodiversity need to be brought out of the ‘environmental ghetto’ into the mainstream media. By linking climate change with topics such as health and the economy, journalists can potentially increase the salience of an issue, which despite its importance for global leaders, continues to punch below its weight in the global media and particularly in Latin America. [youtube]http://www.youtube.com/watch?v=aQyPkNj-SqI[/youtube]
In this interview with one of Latin America’s sustainable development heavy-weights, we discuss the prospects for the Cancun climate change talks and the involvement of Latin American countries, climate debt, the role of civil society and Ecuadorian climate politics. Yolanda Kakabadse is the current president of the WWF and the Latin America Network Director for the Climate and Development Knowledge Network. Previously the Minister of Environment in Ecuador, Yolanda also set-up the Quito-based Fundación Futuro Latinoamericano (FFLA). Yolanda has been granted numerous awards including by the UN for her contribution to the environment and development in Latin America. 1. Do you feel optimistic that Latin American countries can work together to push for an international agreement in Cancun this December? Hopefully, Cancun is going to be different to Copenhagen. The best scenario is that it does not become a moment for negotiations but rather an opportunity to become a platform for dialogue. Dialogue should focus on where there is agreement and understanding. This could help countries agree what they can negotiate later on and establish what is disturbing the negotiations and therefore what should be clarified. There is currently so much division between blocks that going into Cancun to negotiate could prove to be more divisive. Further confrontation should be avoided to maintain faith in the UN process.
Latino Cambio’s fourth interview in the series focuses on Brazilian engagement on climate change. We spoke with Dr. Paraskevi Bessa-Rodrigues,University of UNISINOS, Rio Grande do Sul, Brazil, who specialises on international relations and currently represents her university on the Brazilian Forum on Global Climate Change.

1. Brazil is a significant global trade and commercial power and has until recently been riding high on inflated prices for its commodities. With the new climate change paradigm challenging the business as usual status quo, is the government’s climate rhetoric a genuine attempt to kick start the transition to a low carbon economy?

In order for a governmental rhetoric to transform itself into public policy, consultation, negotiation, consensus and resources are needed in all segments of society. In a pre-electoral period such as the one Brazil is currently undergoing, this process becomes all the more intense. As we saw today in the media, President Lula did not announce the government´s position, as expected, on carbon emission cuts, as the percentages are still being negotiated. This demonstrates that we are in the middle of a process that will culminate during the next few weeks. The need for a unified position becomes all the more important as the Copenhagen meeting approaches. The Climate Change Conference is seen as an opportunity for Brazilian diplomats to negotiate the distribution of tasks, responsibilities, as well as forms of financing for mitigating the effects of the carbon economy among the industrialised and emerging countries. To what extent this will lead to a “low carbon economy” is left to be seen.

2.With all the hype over Brazil’s extensive new oil reserves, is there a risk that the Brazilian climate change discourse might lose traction in the face of greater interest in exploiting the oil bounty?

Oil recourses have attracted large media and (more importantly) political attention. The climate challenge has not been presented as aggressively to the wider public as the prospects for social and economic development that the new oil reserves are expected to create. But it is a subject that involves all areas of human activities, ranging from agriculture to public health, and from security to education. Oil resources should be part of a wider environmental as well as social and economic strategy and not a competing element.

3. The political situation in Brazil is currently focusing on potential candidates for the 2010 presidential elections. Given that the Copenhagen negotiations will be taking placing in less than an month, what evidence have you seen so far of potential hopefuls discussing global warming?

Indeed, one of the most prominent hopefuls is former environmental Minister, Marina Silva, now leading the Green Party. Her candidacy has forced the PT pre-candidate Dilma Rousseff to occupy herself more intensively with the environmental agenda. Among the measures taken is an expansion of fiscal benefits for those buying low energy consumption electrical appliances. It is predicted that Rousseff will head the Brazilian delegation in Copenhagen, a decision which could strengthen her candidacy for president, as well as her international image and hopefully counterbalance the influence of Marina Silva who is also expected at the event. It is interesting to note that on the day of Silva’s announcement of entry into the Green Party, the government also announced a historic decline in deforestation. The environmental agenda is here to stay, Silva’s presence acts as a catalyst for more rapid reactions from her adversaries in the political spectrum.

4. How are the Brazilian industry and business sectors responding to the government’s drive to push global warming up the political agenda?

It is not yet clear whether it is a response to a governmental drive or a policy apart, but there seems to be an increasing movement of Brazilian companies positioning themselves in front of the climate challenge. Last May at the World Summit on Business and Climate Change, more than 500 business leaders from 47 countries participated and among them 4 Brazilian companies. The Caring for Climate is another forum for CEO discussions with a Brazilian presence.

More recently, 22 of the largest industries in Brazil have signed an “open letter on climate change”. The signing companies adhere to a number of voluntary actions so as to diminish the negative impacts of climate change and make a number of suggestions to the federal government for the creation of a “stable and predictable system of governance to tackle the issues of climate change”. The Federations of Industries of various Brazilian States have created discussion groups for identifying the forms of adherence for reduction of CO2 emissions.

Nevertheless, NGOs such as Greenpeace and WWF consider the participation of the private sector in the process as being restricted with limited impacts as most of these companies have a hidden agenda pressuring the National Congress to adopt a more lenient stance on environmental issues.

5. The Brazilian Federal Ministry of Science and Technology leads Brazilian climate change policy. It also heads up the Inter-ministerial Commission on Climate Change, which was created in 1999 and is composed of 11 ministries, with the mandate to co-ordinate discussions on climate change. In your opinion, how effective has the Commission been at coordinating climate change discussions between these ministries and does it represent a useful model for those Latin American countries looking to replicate it?

The Ministry of Science and Technology has a central role in the construction of the national policy for climate change. The involvement of the major actors of the federal government, business community and civil society is a step towards the right direction. However, there is still a lot to be done, not only in terms of participation of the major stakeholders of society, but also in terms of having the right instruments to subsidise strategic decision making.

According to the Ethos Institute the last inventory on CO2 emissions in Brazil was published in 1994 and has become a point of criticism among environmentalists. The new inventory to be presented during the Copenhagen talks, although more up-to-date, contains 2004 data. The argument from the governmental side is that the data necessary for the inventory is complex and difficult to be obtained in a short period of time.

6. In 2000, the Brazilian Forum on Global Climate Change was created with the purpose of raising awareness of climate change with civil society and universities. As the University of UNISINOS representative in the Forum, what type of work are you involved in?

Apart from our institutional presence in the Forum, the university is developing a number of academic instruments in all levels of knowledge, research, teaching and dissemination. The creation of our new post-graduate courses are focusing on renewable energies, already existing courses such as Law, Public Security and International Relations, give increasing emphasis on the environmental challenges; applied research is increasing on systemic thinking in the areas of mining and petroleum; the interest in environmental studies, biology, geology is rising and a number of new open courses on climate change attract student and professional attention. All this make part of a wider context of involvement which is channelled back to the Forum.

7. How useful have you found the new Brazilian communication tools such as the Federal Ministry of Science and Technology e-democracy portal on climate change? Do they have much potent ial in the run up to Copenhagen to diffuse ideas and policies recommendations on climate change to a wider audience?

It is difficult to evaluate the impact of technological instruments recently launched for such a specific purpose. The expectations-capabilities gap is somehow present as we do not know how much of civil society’s contribution allocated on this site will be used for formal negotiations in the international fora.

8. The Brazilian media is arguably ahead of its regional rivals when discussing global warming and environmental issues such as Globo Amazônia’s dedicated site to charting developments in the Amazon. Would you agree with this statement and if so, how could the production and dissemination of climate change related news be improved in Brazil and Latin America?

It is interesting to mention that the UK Embassy in Brazil has conducted research about the presence of the theme climate change in the Brazilian Media. The research has examined about 1.000 articles from 50 Brazilian journals of national and regional circulation between 2005-07. Their findings demonstrate that although there is a rise in the presence of the theme “climate change” there is only a limited understanding of the systemic impacts of the topic. Therefore, there is limited association of the theme with the need for alternative models of development, production and consumption. Most of the material in the media does not offer a strategic and long term view, but rather limits itself on short term and specific issues. The link to the study can be found here.

9. Climate change has traditionally been a lofty pastime for scientists and diplomatic specialists. With the impacts of climate change likely to hit Brazil hard, to what extent is Brazilian civil society becoming involved in the debate?

Because of its size as well as its social and economic disparities, the involvement of civil society on climate change varies and its intensity differs among regions and segments of society. I have the impression that the term “climate change” has more of a scientific flavour which may give the impression to some that it is an issue to be handled by the “experts.” It is important that the discussion on climate change becomes more democratic not only in terms of access on reliable and concrete information, but also in terms of terminology understood by the masses so as to attract greater public to the discussion.

10. Brazilian research institutes and think tanks have played a key role in advancing environmental issues. Which Brazilian organisations working on global warming and its political implications should we be paying attention to?

Coming from the academic environment it is natural that I see the role of Brazilian universities and research centres as vital to the process of advancing environmental issues. But I do not see them working alone: I understand that a successful contribution of these centres will come through a triangular relationship including the government (in all of its levels, local, regional, state and federal) and civil society. The success of these centres will depend on their capacity to transform theory into concrete actions, be that in research, university teaching or even disseminating the environmental discussion to school children and local communities.

A very interesting model could be the one adopted by the Committees of the Hydrographic Basins, which contemplate such an interaction. In particular, the Committee of the Vale do Rio dos Sinos has become a national reference. Its project using bio-indicators for monitoring the levels of pollution in the Sinos River has been a pioneer in this area. Many other local initiatives with global applications proliferate which have to be monitored and brought to the attention of the wider public and policy makers.
In this interview we spoke with the World Bank’s Chief Economist for Latin America and the Caribbean, Augusto de la Torre. 1. With Latin America beginning to reverse the trend of punching below its weight, do you think the region can be a global leader on climate change, and if so through which political or economic space(s)? LAC has been “leading by example” for a long time. With respect to energy emissions, LAC is among the regions of the world with lowest emissions per unit of GDP (about half that of middle-income countries’ average), and its emissions per capita are more than 30 percent below the world average. Given its past record of low carbon development, its wealth of natural resources and its intermediate levels of income – when assessed on a global scale – many Latin American countries are well placed to take a leadership role in the developing world’s response to the climate change challenge. 2. In your report, ‘Low carbon, high growth: Latin American responses to climate change’, one of the key messages emphasizes the need to design policies and activities to tackle climate change, which are complementary to the region’s development. The report argues that there are numerous ways in which Latin American emissions could be reduced at low cost while simultaneously reaping considerable development co-benefits. Have you noticed any major or incremental changes in Latin American development thinking which is taking up this new climate-development discourse? Most Latin American and the Caribbean (LAC) countries are beginning to wake up to the dangers of global warming and thinking about how they should respond. Most concrete actions have to date been evolutionary, rather than revolutionary. But there have been some significant measures taken in some countries. The World Bank is supporting Mexico with a $500M Climate Change Development Policy Loan, a first of its kind, aiming at implementing its national climate change action plan. Many of the actions needed for reducing the growth in the region’s emissions are of a “no regret” nature: they would be socially advantageous regardless of their impact on climate change mitigation. In addition, adopting a low carbon development path would benefit the region’s long-term competitiveness to the extent that the world’s technological frontier moves in the direction of low carbon technologies. Most countries are assessing their climate change policies on the adaptation and mitigation sides, and some, like Mexico, are at a fairly advanced stage of developing an operational strategy. They are also leading forces among developing nations in the global climate negotiations. Taking advantage of these opportunities, however, requires an appropriate international policy environment in which a critical mass of high-income countries take a global leadership role. This is important not only to make such a global framework equitable, thereby lending it credibility, but also to generate sufficient incentives and momentum for the private sector to invest in low carbon technologies. For the world to benefit from Latin America’s efficient mitigation contributions, the international climate framework needs to be responsive – and welcoming – to the region’s potential contributions in the areas of forest conservation, renewable energy sources and environmentally sustainable biofuels. Countries in the LAC region are the world’s leaders in implementing incentive-based payment schemes for forest conservation. In 1996, Costa Rica passed the Forest Law 7575, which has recognized that forest ecosystems generate valuable ecosystem services and provided the legal basis for the owners of forest lands to sell these services. Brazil—the largest player in the global biofuels markets with about half of the global ethanol production— has developed the capacity to produce ethanol at a fraction of the cost of producing it in other countries. Because of favorable conditions for cultivation of sugarcane and the uniquely flexible industrial structure for sugarcane and ethanol processing, in periods of high oil prices Brazil’s ethanol industry has been competitive even without government support. Brazil, in fact may be the only country in which the ethanol industry has been able to stand on its own without government subsidy, and even in Brazil, this appears to have been the case only in 2004–2005 (but not 2006 when international sugar prices skyrocketed) and 2007–2008. (The Brazilian industry was also subsidized for many years to get to this point.) Elsewhere, biofuels production has not been financially viable without government support and protection. Biofuels producers in the European Union and the United States receive additional support—over and above farm subsidies and support to producers through biofuels mandates and tax credits—through high import tariffs. It is clear that from the perspectives of emissions, social costs and economic production costs, ethanol from sugar in Brazil is superior to alternatives. Reducing or eliminating the high trade barriers and huge subsidies currently in place in many countries would produce economic benefits for Brazil and its trade partners, and reduce GHG emissions. In assessing the impacts on overall emissions in producing biofuels in different countries, one relevant question is how much land must be shifted from other crops or converted to produce each gallon of biofuels. The ethanol yield per hectare from sugar in Brazil is about twice that of ethanol from corn in the US. This fact has led to the estimate that if the ethanol currently produced in the US were instead produced in Brazil,3 it would require only 6.4 million hectares, instead of 12.8 million, potentially leading to reduction in pressure for indirect land use change and substantial savings in emissions from this source. But the potential for Brazilian sugar-based ethanol to replace less efficient production from other sources is limited by the current high barriers to import of ethanol into the US and other high income countries. Reduction of these trade barriers to imports of Brazilian ethanol could lead to substantial savings in world cost of production of ethanol and a lower level of land use change. 3. Latin American countries have a number of similarities between them including a reliance on exporting primary goods; a strong record on renewable energy; abundant forest reserves and an interest in REDD; and a rapidly expanding middle class interspersed with persistent inequality. Are Latin American regional and subregional organizations, such as NAFTA, the Andean Community of Nations or MERCOSUR, taking advantage of these similarities and forging greater consensus on climate change in the region? Many international organizations – including the World Bank, the FAO, the Inter-American Development Bank, the UN Economic Commission for Latin America – have large work programs on climate change and are actively supporting efforts countries are making to evaluate their climate change policies on the adaptation and mitigation sides, and to develop and implement an operational climate change strategy. Some of these efforts are regional or sub-regional in scope. Under the auspices of the World Bank, we now have in place the first ever multi-country catastrophe insurance pool, the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which will provide participating governments from the region with immediate access liquidity if hit by a hurricane or ea rthquake. Pooling their risk will save the eighteen participating countries approximately 40% in individual premium payments. Exploratory work is underway for a similar facility for the Central American countries. We have also been working with countries of the region to establish or improve their agricultural weather insurance systems, and to develop the capacity to lay off some of the risk in international re-insurance markets, which will be helpful in mitigating the impacts of changing weather patterns on agricultural production. Unfortunately, in a number of countries, the infrastructure for monitoring weather has actually deteriorated over the years. This will need to be rectified, which will require investments, and the local insurance markets will need to be deepened. 4. Has the global financial crisis helped to push tackling climate change further up the political agenda, given the potential to save billions of dollars through energy efficiency programmes and to improve competitiveness? The global financial crisis has had ambiguous effects on the push to tackle global warming. On the one hand, it has diverted the attention toward the shorter term emergency. The urgency, immediacy, and staggering magnitude of the challenges posed by such crisis has competed with the no less daunting challenges of global warming. The capacity of political leaders and of national and supranational institutions to deal with major global threats is, after all, not unlimited. It would be, therefore, naïve to think that the world’s ability to tackle the colossal breakdown of financial markets and resulting economic contraction is free of tensions and trade-offs with the ability to proactively reduce GHG emissions. On the other hand, a number of factors (including the proximity of the Copenhagen Climate Change Conference and a clear change towards climate friendly policies in the U.S.) have helped keep the world’s attention on global warming issues, despite the global financial crisis. Moreover, it is feasible to reconcile efforts to deal with the financial crisis with efforts to confront global warming. Stimulus policies and programs can be designed and implemented with a “green” objective in mind, and some have in fact been designed that way in many a country, especially in public investments. A “green recovery”—that is, a virtuous interaction among job creation, growth resumption, and low-carbon-oriented public investments and policy actions—is a worthy option and arguably the only sensible option for the world community at this juncture. 5. One of the major failings to emerge from the global financial crisis was the inability to internalize systemic risk. Do you believe there are experiences to be gained from the crisis which may help to create greater risk management and resilience strategies for fighting global warming within Latin American governments, particularly finance and planning ministries? I doubt that such is the case. I would rather think that the reverse is more likely – namely, that regulation in different areas that the environment can learn from the latter about effective ways to induce a better internalization of externalities. 6. What potential links are being formed between the work being conducted on the economics of climate change in Latin America and more conventional macroeconomic and financial development topics? Let me focus on financial development. Financial markets are particularly important in responding to the challenges of climate change in several ways. Better insurance markets allow households to reduce their risk exposure from extreme events, which are expected to become more common as the world warms up. We in the World Bank are heavily engaged in providing assistance aimed at developing weather insurance markets in developing countries. Better access to short-term savings instruments likewise allows households to “save for a rainy (or excessively dry) day”, while longer-term financial instruments facilitate borrowing for investments that will be needed to reduce damages from catastrophes. Of course, development of financial markets provides many benefits even in the absence of considerations of climate change, illustrating the more general point that good policy to adapt to climate change is largely congruent with good development policy. Governments also need to be able to respond to weather-induced catastrophes, and new financial instruments are being developed to help them do so. One example is the Caribbean Catastrophe Risk Insurance Facility. Another is the World Bank’s Deferred Drawdown Option lending instrument, which is basically a pre-approved line of credit, which gives a government quick access to liquidity in an emergency. 7. The IADB reports that up to 98 percent of Latin American businesses are micro, small or medium-sized and are said to generate around 60 percent of the region’s employment. At a time when leading economists are calling for a green recovery to the financial crisis, what potential is there in Latin America to create green jobs for the millions of peoples involved in this business sector? Many green investments are consistent with stimulus objectives. The World Bank has recently analyzed the short-term employment generation potential of different types of infrastructure investments and has found that large highways and traditional thermal power plants, for example, generate very little short-term employment for the amount of money spent - in the hundreds to low thousands of yearly jobs for US$1 billion of investment. In contrast, the expansion of water supply and sewerage networks can generate upwards of 100,000 short term annual positions for the same amount of money and rural road maintenance, which gives small businesses and farmers access to markets and which often employ micro-enterprises, may generation 250,000 to 500,000 short-term positions for every US$1 billion of investment. Any major investment that begins with direct labor expenditures before high-value added content is added - such as small hydro facilities or the construction of dedicated bus lanes - will reach into the slackest part of the labor market and will generate the highest shares of direct employment. On the higher end of the value-added spectrum, LAC continues to be a leader in alternative and renewable energy generation, from its large hydro base to the growing use of geothermal, bagasse, wind and even solar. LAC's proximity to the US market and the region's own growing interest in renewable technologies has not been lost on the technology companies. A major integrated solar panel manufacturer in the US is now looking to relocate a part of its manufacturing to Mexico and we may expect that this trend of incorporating LAC into the supply chain for renewable technology will continue. 8. In recent years, Latin America’s carbon intensive sectors such as the mining, hydrocarbons and forestry sectors have helped to fuel the region’s economy aided by booming commodity prices. To stabilize greenhouse gas emissions concentrations to avoid dangerous climate change, over 50 percent of global mitigation potential would be located in developing countries. In the cases of industry, agriculture, and forestry, almost 70 percent of that mitigation potential is in developing countries. How is Latin America responding to this challenge and what synergies or conflicts exist between the trade and climate change regimes for the region? There are several ways in which trade policy can be improved to help address the challenges of climate change. First, all kinds of barriers to food trade could be more effectively disciplined. This would facilitate changing patterns of food trade as climate change alters production patte rns over the long term, as well as spread the effects of short-term supply shocks and ensure that consumers and producers respond appropriately. With a share of close to 11 percent of world agriculture and food exports, LAC is currently a major food-exporting region. But some countries may suffer large losses in productivity, leading to dramatic shifts in food trade patterns inside and outside the region. This issue is therefore of vital concern to the LAC region. One of the lessons of the recent precipitous increases in food prices is that when shortages arise, there is a tendency for countries to react with “beggar thy neighbor” trade policies that insulate domestic consumers and producers from international price movements, and in doing so, shift the adjustment costs onto others. This has included ad hoc reductions in import barriers and increases in export barriers, neither of which is effectively disciplined under current WTO rules. Many governments have also responded to the food crisis by focusing on measures to increase their degree of self-sufficiency in food production. In the future, as climate change makes food production increasingly high-cost in some countries, trying to maintain levels of self-sufficiency will likewise become increasingly costly. This underscores the importance of keeping the trade system open in order to give all countries confidence that they can rely on it to supply their food requirements. Second, barriers to trade in goods and services that help reduce emissions would ideally be eliminated. These are currently being addressed in the Doha Round negotiations, but progress has been limited. Of particular interest to LAC is the reduction of barriers to trade in ethanol. This is of greatest interest to Brazil which is the lowest cost producer in the world, but may be important for other countries in the region where ethanol can be efficiently produced from sugarcane. From the dual perspectives of efficiency and effectiveness in reducing emissions, it is in the world’s interest to ensure that ethanol is produced where this can be done most efficiently, rather than in countries where it requires large subsidies and high trade barriers. Ethanol can be produced in Brazil using about half as much land and at a far lower cost than production from, let’s say, corn in the US. Yet current biofuels trade policies and subsidies in high-income countries have generated huge distortions in agricultural markets, with adverse impacts on poor food consumers worldwide, and at best minimal reductions in carbon emissions. Finally, the WTO’s Committee on Technical Barriers to Trade is already involved in reviewing the increasing number of standards and labeling requirements targeted at energy efficiency or emissions control. It could also play an important role in ensuring that other trade policies – including tariffs levied on the basis of the producing country’s emission reduction commitments or environmental regulations – are not discriminatory and do not unnecessarily restrict trade.
For Latino Cambio’s second interview in the run up to the Copenhagen negotiations, we talked with the World Bank’s Lead Engineer for the Latin America Environment Department, Walter Vergara. 1. In 2004 you said ‘the political will for a strong support of adaptation efforts is still weak, and there is considerable confusion.’ In 2009 would you stick by this statement and if so why? Or if not what has changed? The political context has changed for the better and this is reflected in a renewed commitment by the international community. Yet, there is still a lingering lack of information and of course trying financial conditions that continue to impede further progress. On top of this, the challenge has only grown worse with time. 2. Various multilateral organizations including the World Bank, Inter-American Development Bank and CEPAL are working to increase Latin American capacity on climate change. Numerous organizations are also funding work programmes and projects such as the UK’s Department for International Development and the European Union’s EUrocLIMA Initiative. In your opinion how well coordinated are these efforts between the organizations themselves but also with national governments in Latin America? I think folks at all of these institutions want to do it right and are aiming at the best coordination possible; but, let's not underestimate the turf syndrome. We all need to fight for the best possible efficiency in delivery of the limited resources available under the best allocation criteria possible and this requires seamless coordination between institutions. 3. In the World Bank report, ‘Low Carbon, High Growth: Latin American Responses to Climate Change’ there is very little mention of the role of Latin American civil society. The bibliography also includes few if any references to research conducted by Latin American research institutes or think thanks. Why might this be the case? There is substantial work being undertaken by research institutions and some of these is reflected in the report and also in the recently released "Assessing the Potential Consequences of Climate Destabilization in Latin America". Some of the institutes providing first rate analytical and field work are indeed mentioned in these publications and a very limited list includes: IDEAM, the meteorological institute of Colombia, CAN, the Andean Community of Nations, EIA, the School of Engineering of Antioquia, EMAAP-Q, the water supply and treatment company of Quito, INE, the Institute of Ecology of Mexico, UNAM, the Autonomous University of Mexico, SMA, the Secretary of Environment of Mexico City, the Caribbean Community Climate Change Centre in Belize, INPE/CPTEC in Brazil and many others that I fail to list. 4. Much of your recent work at the Bank has investigated the impacts of climate change in the region such as water availability and the loss of biodiversity. Which impact is most likely to affect the greatest number of countries in the region and what is being done collectively to address it? In a recent article, we have tried to answer this question. There are very clear climate hot-spots in Latin America, that tower against other consequences of climate change due to its magnitude, irreversibility and economic and environmental impacts. A short list includes: the risk of climate induced dieback of the Amazon rainforest, the accelerated warming of the Andes cordillera, the collapse of the coral biome in the Caribbean and the subsidence of the coastal wetlands in the Gulf of Mexico. While there are other significant impacts in the region, these are in a category by themselves. 5. Latin America arguably has sufficient experience of low carbon development to lead the developing world in tackling climate change. In your experience how much dialogue is their between Latin America and other developing regions on climate change and low carbon growth? I am afraid not as much as there should be, in part because of the transaction costs involved in disseminating lessons and sharing experiences amongst a large number of mostly small to medium size projects. There should be concerted efforts to disseminate experiences. In the Latin America region of the World Bank, there is growing appreciation of the benefits of what you propose and in the field of adaptation; resources have been allocated to ensure that successful experiences with investments in adaptation are widely shared within our region. 6. As the region is the most urbanized in the world and a number of the impacts of climate change will hit these settlements the hardest, would you agree that the battle to fight global warming will either by won or lost by these urban settlements? The impacts in urban settlements are very serious and have the potential to affect a large population. But, I do not agree with the premise. It is akin to us thinking that the problem with the food system needs to be solved at the supermarket, while the food is actually produced and transported from elsewhere. I am convinced that the key to adaptation lies in an ecosystem-based approach and that success to adapt will be based on our ability to shield and protect the ecosystems that provide the economic and environmental services upon which we rely. But, of course, there can not be a successful adaptation strategy if that does not include a major drive to reduce emissions by the most energy intensive societies such as the United States and China. 7. The mismanagement of natural resources in Latin America has been a constant theme for hundreds of years. Given the region’s reliance on tapping into these resources for their development, do you think the sound and sustainable management of these resources is possible? And if yes how does climate change fit into this resource-development nexus? It is not only possible but absolutely necessary. I am gratified by the growing number of examples, where regional and local governments but also private companies have chosen to invest in the future, through, amongst other examples, avoided deforestation, conservation and restoration efforts, investments in long term basin management and improved efficiency in the use of environmental services. Much needs yet to happen and there are still a large number of battles to fight and eventually win, but progress is being made. 8. Taking into account Latin America is home to the Amazon rainforest and also abundant other forested areas, do you think there is a risk that national governments in the region resent these resources being framed as sources of cheap and easy abatement opportunities as opposed to real options for poverty reduction, reducing emissions and development? As recent assessments and data indicate, this key element of the global water and carbon cycles is being endangered by climate consequences. There is much at stake in the conservation of the Amazon rain-forest and there is a growing awareness that this is an asset on which the global community, the region and the local inhabitants, equally depend. Maintaining the rainforest ecosystem is probably one of the single actions that the global community can undertake to prevent the impoverishment of future generations. Conserving this ecosystem is a requirement for maintaining our biosphere. 9. In your recent publication, ‘Assessing the Potential Consequences of Climate Destabilization in Latin America’, you edit a number of papers which paint a rather depressing picture of how costly and spectacular the impacts of climate change could be in Latin America. For those actors in the region responsible for government planning and policy, what is the report’s key message and how was the report received in the region? The publication does paint a dire situation that is the reality we face today. The key message is that the region has much to lose from runaway GHG emission trajectories, such as we are experiencing today. This calls for political activism to induce energy intensive nations, such as the United States and China to aggressively reduce their emissions, for all countries in the region to improve the management of their natural resources and move to lower carbon development paths and for urgent support of strategies, that centre on ecosystem based adaptation. 10. Finally, let’s consider a scenario. If we jumped to 2100 and take a look at a Latin American region which has lead and participated in a number of international treaties to curb global GHG emissions and adopt a low carbon economy, what would be the key features of the Latin American economies? A zero carbon power grid, low carbon mass transport, built on the basis of cost effective Transit Systems and very efficient vehicle technologies, a massive effort at avoided deforestation and ecosystem restoration, all activities whose management and maintenance engage and employ our next generations.
In the run up to the Copenhagen climate change conference in December, Latino Cambio is running a series of interviews with Latin American citizens, regional and international researchers, policy-makers and scientists linked to the global warming debate. In this first interview we talk with Dr. Elizabeth Lokey, University of Colorado, who has recently published a book on Latin America, renewable energy and the Clean Development Mechanism (CDM). 1.Your book entitled, ‘Renewable Energy Project Development under the Clean Development Mechanism: A Guide for Latin America’, is described as the definitive guide to developing renewable energy CDM projects in Latin America. How would you sum up the scope of your book and its key messages? This book offers insight into the key challenges that renewable energy and other energy project developers face in Latin America. Each country in the region runs its electricity sector differently, which presents challenges to foreign developers. The book not only explores the challenges to earning CDM revenues, but also investigates the various electrical sectors and lessons learned from developers in each country. CDM challenges which have largely been discovered and overcome by a process of trial-and-error are addressed. These challenges are related to the UNFCCC process, as well as domestic policies and processes specific to the new Mechanism. 2.The book is arguably the most up-to-date analysis of CDM in Latin America and is the only work that focuses specifically on CDM opportunities for renewable energy. How has your work been received in the region so far and is the book also available in Spanish and Portuguese? I have received invitations to speak at various carbon conferences in Latin America, and much support from colleagues and friends. My hope is that the book will help guide project developers through the complex CDM process and allow for more renewable energy project development in the region. The book is not available in Spanish or Portuguese. If there is enough interest, then perhaps Earthscan will consider sponsoring a translation of the book. 3.Your methodology focused on interviewing project developers, policy-makers, NGOs and investors on the ground in the respective countries. As an example of a low carbon employment, do you think the CDM has proved helpful in creating low carbon jobs in Latin America and what is its potential? Most of the people I spoke with were related to the energy sector or governmental appointees, who helped operate the internal CDM-approval process. However, it is hard to say how much CDM has contributed to job creation. Many of the government appointed people interviewed in the Designated National Authority (DNA) offices previously had governmental posts in the country’s climate change or environmental office prior to the DNA office being established. Their positions were simply expanded to include the procedural parts of the national CDM approval process and a new position was not created. Other countries did have CDM-dedicated approval personnel and promotion offices which were instigated by the CDM. The number of new governmental posts varied from country to country. Within the industrial sector, the project developers interviewed were almost all in business before the CDM, and many had been trying to develop specific projects since the 1990s, before the advent of the CDM. In an ideal world, the CDM would provide a greater incentive to prompt large amounts of new renewable energy project developers. In reality, the CDM was just the icing on the cake for these developers, not the sole reason for their existence. Another category of people interviewed included carbon project developers that help project developers take their projects through the CDM process and commercialize the emission reductions that are generated. They owe the existence of their work completely on the CDM. Yet, there may be only a few hundred of these consultants spread throughout the entire region. 4.You suggest that the promotion of (non-large hydro) renewable energy CDM projects helps achieve the CDM goal of sustainable development. As the sustainable development benefits of the CDM are often the most challenged aspect, could you elaborate a little further? The book specifies non-hydro renewables because large hydro energy with dams, while mostly beneficial (except for the methane emissions from the flooded land) from a greenhouse gas standpoint, have left a scarring legacy throughout Latin America. Citizens in the region therefore have mixed feelings about hydro development. Due to global warming and seasonal fluctuations as a result of the Southern Oscillation, some hydro projects in countries like Chile are not always reliable. Sustainable development is never mentioned in the Kyoto Protocol. The definition used in the book is borrowed from the 1987 Brundtland Commission. According to this definition, electricity resources that are derived from renewable sources qualify since they will provide electricity for future generations with resources that are replenishable. Since these energy resources are not based on a finite fuel and do not contribute to the accumulation of gases, they contribute to sustainable development. 5.One of the major barriers to CDM projects, which you identify, relates to the openness of a country’s electrical sector. Are private or stated owned electrical sectors better for CDM development? The countries in Latin America are all in varying states of privatization, with some still dominated by a primarily state-owned electrical grid like Mexico, Costa Rica, and Uruguay and others with a completely privatised grid like Guatemala. The countries with state-owned grids tend to be those with little renewable energy CDM development because of restrictions placed on the state entities for earning these revenues. Private developers can certainly access CDM revenues, but typically there are so many barriers to market entry for independent power producers in these countries that they are the minority. The state is the entity with the greatest ability to benefit from renewable energy CDM projects. The CDM registration process relies heavily on a financial additionality test, which proves that the project relied on carbon revenues for its existence. State-run power producers are typically bound by law to develop the least-cost generation option for their constituents. This least-cost option, by definition, will not be financially additional, especially since the state can set the rate for cost recovery of the new capacity addition. States also produce future resource planning guides, which will mention large new capacity additions. If a project is mentioned in this future resource plan, then it could negate the project’s additionality since auditors could make the argument that the project was planned and would have been built even without the benefit of CDM revenues. Countries with open electrical markets that allow the participation of independent power producers that are not bound by the least-cost generation requirement or the resource planning process are more able to have success with the registration of renewable energy CDM projects. 6.You argue a country’s renewable energy legislation can be both a blessing and a curse for renewable energy development as it can provide additional financing or complicate the process of showing project additionality. This has created a perverse incentive for developing countries to do nothing to address climate change. Can you expand on this? One of the fundamental problems with the CDM is that it requires projects to prove that they wouldn’t have occurred in a business-as-usual situation. If a country puts in place a policy or incentive for renewable energy, the argument could be made that that project would have occurred without the benefit of the CDM. In Chile where there is a 10% Renewable Portfolio Standard, any projects that fulfil this requirement and also receive CDM revenues could be argued as not regulatorily additional. In Ecuador, where there is an aggressive feed-in tariff for renewable energy, photovoltaic energy systems receive a fixed energy payment of 52 cents (USD) per kWh. Can systems that receive this payment prove that they would not have occurred otherwise? The CDM Executive Board sought to clarify the issue of the perverse incentive in a decision in 2005 at its 22nd meeting which ruled that, “the baseline scenario need not take these policies (that lower emissions) into account . . .” There are still some concerns among project developers over how a CDM additionality argument can be constructed for a project that receives large government subsidies or is required to exist according to national law. CDM in its present form is problematic for instigating domestically-motivated reduction projects, although these types of projects are exactly what are needed in order to bring about significant reductions in emissions. 7.How effective are the various CDM actors (National CDM offices, Investment Promotion Agencies and Designated National Authorities) at working together to promote project development and sustainable development goals? The degree to which each country has support structure in place for CDM project varies dramatically. This support comes in the form of: industry associations that promote renewables or a particular industry in general; carbon brokers who seek CDM projects and occasionally make project developers aware of the opportunity for carbon finance; and governmental offices with CDM officials called Designated National Authorities (DNAs), who make the final decision whether or not a project fulfils the mandatory goal of promoting sustainable development. The degree of involvement of each of these actors depends on the country, its potential for CDM development and the emphasis the government has put on CDM. Some governmental offices in countries like Ecuador and Argentina can be very helpful in promoting CDM as a special promotion arm exists and is dedicated to helping educate project developers. Other DNA offices are less active or understaffed for the role because they have less resources. Some DNA offices serve as a hindrance to CDM because they charge a tax on each emission reduction created. This tax can vary between 3-6% in Ecuador, or as large as 15-35% as proposed by the Bolivian government. Because each DNA office decides what constitutes a project that promotes sustainable development, a complex and time-consuming domestic process can be required on top of the already complicated UNFCCC process. 8.Political instability is identified as a major turn off to potential investors in CDM projects. Do you think some of the current left leaning governments of Latin America and particularly the aversion to the CDM demonstrated by Venezuela risks jeopardizing Latin American enthusiasm for the CDM? The political environment of a country has a large bearing on the success of a project. However, some countries with relatively violent pasts like Colombia have been successful with the CDM because of promotional activities ands recent years of stability. Other countries, like Nicaragua, have had less activity. These countries tend to require a higher internal rate of return on projects because of the political and economic risks associated with the host country. Developers are hesitant to invest unless there is an outstanding opportunity. As an extreme example, Venezuela has not even set up a national Designated National Authority because President Hugo Chavez does not support the CDM as he claims it is a market-based mechanism. Other countries like Paraguay and Bolivia may have relatively little CDM development because there are few opportunities for emission reductions. These countries have very clean electrical grids already and new renewable energy projects would be displacing small amounts of fossil fuels and therefore create few emission reductions. Typically, it is the countries like Mexico and Brazil with large amounts of emissions that have the best opportunity to create reductions. This has led to an inequitable distribution of projects. 9.The melting of glaciers presents a major challenge to those looking to develop CDM hydro-power projects, particularly in the Andes. During your research how did this issue present itself? This issue was encountered in Chile where the melting of glaciers had become a significant issue for hydro developers. This issue certainly has implications for the hydro industry, and may decrease the number of new hydro applications in the country. Other CDM-specific barriers to large hydro projects also exist. The EU decided in 2007 that it would only allow CDM hydro projects from dams that were less than 20 MW, which greatly limits the participation of large hydro projects in CDM since the EU is the largest buyer of Certified Emission Reductions (CERs). 10.Finally, you put forward a number of solutions to overcome the barriers at the technical, social, financial, informational and institutional level within host countries and at the UNFCCC. Which are the most pressing in your opinion? For a post-2012 offset architecture, the most pressing issue is how to allow host countries to implement their own reduction targets while still allowing for cost containment for Annex I countries and permitting offsets to be generated from that country. Reconciling this previously mentioned perverse incentive issue is essential to the assimilation of non-Annex I countries into a system where they will eventually have binding reduction targets. For a post-2012 regime, the goals of the CDM need to be clear. If sustainable development is to be a goal of the CDM, then a clear definition of what constitutes sustainable development needs to be defined and consistently applied (as opposed to now where each country decides on this definition). If an equitable distribution of projects is part of this definition, then enhanced efforts to allow small-scale projects in regions like Sub-Saharan Africa and rural villages that have few emissions, and therefore the potential for few reductions, need to be made. A more streamlined approach for micro projects could help promote this type of development.