The agreement’s speedy ratification process and entry into force marks a new direction for the global economy toward a more prosperous, secure and sustainable future. With 2016 set to be the hottest year ever recorded, the sense of urgency that the world must act is growing.
Latin America is extremely vulnerable to the impacts of climate change. Glacial melt in the Andes is likely to affect water supplies with serious consequences for millions of people that depend on agriculture and the supply of electricity from hydropower. Rising sea levels and more frequent and more intense hurricanes, floods and droughts are also already bringing upheaval, destruction and displacement across the region and are only expected to increase.
A 2015 survey by the Pew Research Center found that 77 percent of Latin Americans said that climate change is already affecting them. Meanwhile, the UN Economic Commission for Latin America and the Caribbean (ECLAC) suggests that the estimated costs of climate change in the region range from 1.5 to 5 percent of Gross Domestic Product.
What is the Paris Agreement?
The Paris Agreement seeks to limit the mean increase in global temperatures to well below 2 degrees Celsius and to pursue efforts to limit global mean temperatures to 1.5 degrees Celsius. A long-term goal to reduce greenhouse gas emissions aims to reach greenhouse gas emission neutrality in the second half of the century. This sends a clear message to governments and investors that the transition to 100 percent renewable energy and the phrasing out of fossil fuels by 2050 is required.
The agreement includes legally binding obligations for all countries to regularly prepare climate plans called Nationally Determined Contributions. These plans will be reviewed every five years by the UN to gauge progress toward achieving the long-term goals. This process begins in 2018 with a dialogue to review the current batch of contributions to be resubmitted by 2020.
Nearly all Latin America and Caribbean countries (except Nicaragua) have submitted a national pledge. Latin American countries’ contributions focus on renewable energy and energy efficiency, forest protection, sound agricultural practices, clean transport, waste management and the improvement of industrial processes. A number of the pledges also stress the importance of adaptation to the impacts of climate change such as improving costal defenses and watershed management.
For example, Brazil pledged to reduce emissions by 43 percent by 2030 compared to 2005 levels. Chile made an unconditional target of a 30 percent reduction of CO2 emissions-intensity of GDP below 2007 levels by 2030 and to 45 percent with further international support.
Yet according to Climate Action Tracker, a majority of Latin American countries’ national pledges, like those of others around the world, are considered insufficient. They do not currently correlate with the global temperature goal of the Paris Agreement, with estimates suggesting that they would result in roughly 3 degrees Celsius of warming this century—significantly above the stated goals of the agreement.
Ratcheting up commitments can reap further benefits
With the agreement entering into force this week and the 2018 facilitative dialogue not far off, pressure is mounting for all countries to scale up the level of ambition in their national climate plans. But in Latin America and elsewhere, there is little appetite to revise these pledges due to various factors related to slowing economic growth (and the fear that reductions could prove exorbitantly expensive) and forthcoming elections.
Since Latin America only represents 9 percent of global emissions, the spotlight is on the largest emitters—the U.S., China and the European Union—which will largely decide whether the goals of the agreement are achieved or not. Nevertheless, Latin American countries still need to ramp-up their own pledges for two reasons.
First, some Latin American countries alongside others from around the world played instrumental roles to secure the adoption of the Paris Agreement in 2015. This diplomatic triumph was based in part on these countries’ willingness to put forward voluntary emission reduction pledges. Peru was the first developing country to announce a voluntary emission reduction pledge in 2008, offering to reduce to zero the net deforestation of primary forests by 2021. Mexico also pledged to reduce its emissions by up to 30 percent compared with its “business as usual” scenario by 2020. Although the implementation of these voluntary measures is patchy, the act of putting them forward was essential in shaping the narrative at the UN climate negotiations that all countries should act.
Second, countries should focus on launching proactive agendas to implement the agreement and improving the current round of pledges. A focus on the agreement’s goals can provide a blueprint for cleaner and better development, which should in part focus on encouraging an aggressive expansion of renewable energy.
Latin America’s immense potential for renewable energy, which can attract investment, create jobs and reduce emissions, remains underutilized. At present, non-conventional renewables including solar, wind and wave power represent only 0.9 percent of the total power generation of the region. A massive expansion is necessary and seemingly possible.
The Inter-American Development Bank says Latin America can meet its future energy needs through renewable sources, including solar, geothermal and wind, which are sufficient to cover its projected 2050 electricity needs 22 times over. Meanwhile, the International Finance Corporation estimates that Latin America and the Caribbean represents $1 trillion of clean energy investment opportunities by 2040, of which $600 billion is expected to materialize by 2030, with Brazil, Chile and Mexico representing over half of the investment potential.
Progress is being made but it needs to accelerate. At a time when overall investment levels have dropped in Latin America, renewable energy represents one of the brightest spots for inbound flows of foreign investment. In 2015, renewable energy was the most important target of new investment announcements with Chile, Honduras, Brazil, Mexico, and Panama performing especially well.
This sector is making progress due to the abundance of the region’s renewable energy reserves, falling costs of technology, and strong regulatory and policy frameworks that look increasingly appealing to investors. The launch of national climate plans and related renewable energy targets also provides greater long-term certainty.
Chile established a goal of reaching 70 percent of its electricity from renewable sources by 2050 last year. Argentina has also established a renewable energy target calling for 8 percent of electricity generation to derive from renewables by 2018, and 20 percent of generation to derive from renewables by 2026. However, countries continue to be held back by vested interests in the status quo, fossil fuel subsidies, difficult investment climates, and a lack of capital.
Encouragingly, a growing number of organizations, including multilateral development banks, are attempting to bring their activities into line with the Paris Agreement to support countries in implementing their national climate plans, by mobilizing finance and technical assistance.
Last month, the Inter-American Development Bank Group launched a new initiative to support Latin American countries implement their national climate plans. The NDC Invest platform aims to offer countries a package of support to transform their national climate pledges into achievable investment plans and mobilize resources for their implementation.
Latin America is in a strong position to capitalize on the Paris Agreement, which can help build more sustainable, resilient and prosperous economies. The agreement’s entry into force this week brings that reality one step closer.
Guy Edwards is a research fellow and co-director at Brown University’s Climate and Development Lab. He writes here in a personal capacity.
This article was published here.