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Greening Argentina's G20

3/5/2018

 
By Guy Edwards
Picture
During the first few months of its G20 presidency, Argentina's government has focused on jobs, infrastructure, and food security. But, in contrast to the previous Chinese and German presidencies, it has de-emphasized climate change, jeopardizing the group's goal of ensuring sustainable economic growth.

When Argentina officially assumed the one-year presidency of the G20 in December, President Mauricio Macri’s agenda did not include climate change as a top priority. Unlike previous G20 presidencies, which linked economic-development goals to climate-related targets, Argentina’s decided to separate the issues.

Macri can be excused for assuming that a cautious G20 leadership is what his political fortunes require. He has, after all, suffered in the polls since undertaking a controversial reform of Argentina’s pension system. But if Macri believes that downplaying the importance of climate change is what his country needs, he is sorely mistaken. In fact, bringing bolder climate-change leadership to the G20 could benefit Argentina’s economy, while boosting Macri’s political standing, both nationally and on the world stage.

Argentina’s G20 agenda is what Macri calls a “people-centered” strategy for “fair and sustainable development.” During the official handover last year, Macri named jobs, infrastructure, and food security as the three priorities. He also said that Argentina would embrace the G20 presidency as an opportunity to play a greater role in promoting multilateralism.

It is curious, then, that climate change does not rank among Argentina’s top priorities. Perhaps no other issue is as unifying as the international challenge to combat global warming. And yet, when multilateralism is needed most, Argentina’s approach has been to sidestep it.

No political agenda that seeks to promote sustainable economic growth can dismiss environmental risks. Truly sustainable development requires completing the transition to a low-carbon and climate-resilient economy. For example, Argentina hopes to attract $26.5 billion in infrastructure investment through 2022. If it hopes to meet its existing international climate commitments, it will have to incorporate current and predicted climate impacts – as well as rapid technological advances, especially in renewable energy – into planning.

Pushing climate change up the G20 agenda would most likely benefit Macri politically. Last year, Latinobarómetro, an annual survey of public opinion in 18 Latin American countries, found that 71% of Argentines believe that the fight against climate change should be a high priority, regardless of the economic consequences.

Fortunately for Macri, climate policies can fuel growth. According to the OECD, combining climate policies, such as carbon pricing, with economic policies to increase investment in sustainable infrastructure could boost GDP by up to 2.8%, on average, in G20 countries in 2050. Argentina is already reaping some of these rewards: in 2017, the country’s clean-energy sector attracted $1.8 billion in investment, a 777% increase from 2016.

That is why previous G20 presidencies have made climate policy a cornerstone of the bloc’s agenda. In 2016, China used its time at the helm of the G20 to push countries to ratify the 2015 Paris climate agreement, which aims to limit the increase in global temperature to well below 2º Celsius above preindustrial levels. And in 2017, Germany established a working group on climate change, which it merged with another on energy to draft key climate-related policies. In delivering strong climate-change leadership, China and Germany were simply giving the bloc what its members were demanding.

As Argentina moves in the opposite direction, countries that have made climate change a high priority – including Britain, Canada, China, Germany, France, and Mexico – must help walk Macri back to the table. The onus should be on political leaders in Europe, where diplomats have privately questioned the Argentine approach.

Assuming Macri is receptive to revising the agenda of Argentina’s G20 presidency, urgent attention is needed on a number of issues. For starters, the G20 must push national, regional, and multilateral development banks to do more to support cleaner infrastructure. Shifting financing away from fossil-fuel projects is among the fastest ways to achieve reductions in global carbon emissions. When the Inter-American Development Bank, one of the world’s “greenest” banks, holds its annual meeting in Argentina this month, Macri should use the opportunity to encourage an increase in sustainable infrastructure investment.

Beyond the G20 agenda, Argentina can do more from a bilateral perspective. A good place to start would be reshaping engagement with the United States, especially by deepening ties to states, cities, and investors that have adopted a more enlightened climate position than the Trump administration, which has signaled its intent to withdraw the US from the Paris accord. For example, Argentina could find an ally in California Governor Jerry Brown, who will host the Global Climate Action Summit in San Francisco in September.

The clock is ticking on efforts to reduce global greenhouse-gas emissions. To avoid blowing past the 2º threshold, all parties to the Paris agreement will need to raise the level of ambition of their current commitments by 2020. Several meetings this year, including the G20 Leaders’ Summit, which will take place two days before the start of UN climate talks in Poland, will set the political tone. Argentina can use these opportunities to signal its intent to bring its commitments into line with the Paris accord, thereby potentially encouraging other countries to follow suit, while gaining the attention of investors keen to exploit Argentina’s low-carbon opportunities.

Early in Macri’s tenure, Argentina was a global leader on climate change solutions, and the country’s leaders were pursuing policies to diversify the economy away from fossil fuels. But today, with the power to drive the issue forward, Argentina is taking a back seat. It is not too late for Macri to integrate a stronger climate agenda into his G20 leadership. His cautious approach is not a good bet for him, much less for a world engaged in a struggle it cannot afford to lose.

This article was published originally by Project Syndicate

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