The debate now shifts from the closed-off UN negotiating rooms to national legislatures responsible for domestic ratification. Some governments including those in Mexico, Argentina, Costa Rica and Brazil, are attempting to join the agreement in 2016.
The case for climate leadership in Latin America received a boost from the announcement that Mexico’s former Secretary of Foreign Affairs, Patricia Espinosa, will be the new UN climate chief. Espinosa’s celebrated handling of the 2010 Cancun talks well positions her to build on the formidable legacy of Christiana Figueres in encouraging greater global action on climate change. Having two consecutive Latin American women lead the UNFCCC can pressure governments in the region to prioritize the issue.
The Paris Agreement will enter into force once 55 countries, which account for at least 55% of total global emissions, complete their domestic ratification processes. It stands a good chance of coming into effect this year or next after the US and China, which together represent nearly 40% of global emissions, announced their intention of joining it in 2016.
The Paris Agreement sends a clear message to policymakers and investors that the phasing out of fossil fuels by 2050 is required and that all investments must be consistent with reaching net zero emissions this century. It includes binding obligations for all countries to regularly prepare national climate plans and strengthens the goal to limit the global temperature increase to well below 2 degrees and to pursue efforts to limit it to 1.5 degrees.
The domestic ratification process in Latin America creates an unprecedented opportunity to start a national conversation about the benefits of climate action and the implications for infrastructure investments. Focusing on the Agreement’s goals can provide a roadmap for cleaner growth especially renewable energy expansion and prioritizing electric transport in urban areas. At a time when weaker economic growth and recession blights the region, lawmakers must enable progress to improve economic performance and productivity by backing new engines of growth that are low in emissions and resilient to climate impacts.
As part of the Agreement, all countries are required to submit national plans. Nearly all Latin American countries set goals to reduce emissions and adapt to climate impacts. This process led to a more open policy design and in some cases, civil society and the private sector participated in debates about targets for the first time. However, this first generation of emission reduction goals is insufficient to limit the average global temperatures to well below 2 degrees. Latin American countries’ proposed reductions are also for the most part too conservative. Except for Brazil and Costa Rica, the plans are conditional upon developed countries delivering financial, technological and capacity building support.
Between 2016 and 2018 countries must upgrade their plans to bring them in line with the Agreement’s goals. Ratification along with a pathway for improving the national climate plans would send a firm message to developed countries that countries are serious about their implementation. The plans should also include more detail on the required finance providing better guidance to developed countries and investors on what is needed to support their implementation. Transparent reporting on progress will also be crucial to increase their credibility with citizens and companies.
Plugging the finance gap and a proactive private sector will be essential
Vast investment flows are needed to support Latin America to build essential infrastructure for sustainable transport, clean energy and water, and sanitation and waste collection services. The Inter-American Development suggests up to 5 percent of Latin America’s GDP or roughly US$250 billion will be required to meet future demand for infrastructure. National conversations should openly discuss the benefits of these investments, which can reduce emissions, create jobs and increase productivity.
In a positive step, the Inter-American Development Bank plans to increase the volume of climate-related financing to 30 percent by the end of 2020. Other banks including the Central American Bank for Economic Integration are also beginning to prioritize climate change.
More banks will need to follow suit especially those controlled by emerging economies, which are large global emitters and big lenders to developing nations. The New Development Bank will provide $811 million in a first round of loans for clean energy projects including $300 million to Brazil’s Banco Nacional de Desenvolvimento Economico e Social to help build 600 megawatts of renewable energy capacity. This clean shift should accelerate. Green finance still only makes up 20 per cent of total development bank financing in Latin America with most of it being channeled into heavily polluting projects.
Latin America’s private sector should also more proactively support the Paris Agreement. Its ratification and entry into force sends a strong message that the transition to a cleaner and more resilient economy is underway and business will have to decide whether it will shape this transition or be shaped by it. In a promising step last month, 26 Latin American companies supported the creation of the Pacific Alliance Green Growth Platform. Companies across Alliance members (Chile, Colombia, Mexico and Peru) stated their commitment to encouraging greater public-private partnerships to spur interest in building clean, innovative and resilient infrastructure.
Embracing cleaner engines of growth
Latin America’s huge potential for expanding renewable energy remains untapped. It is time to transform the region into a magnet for investment for renewables. Colombia's recent energy crisis exacerbated by drought reminds us of the risks of an over-reliance on hydropower. Short term fixes including bringing online more fossil fuels would be a mistake given the increasing competitiveness of renewables and the risk of fossil fuel assets becoming stranded.
Some countries have established renewable energy targets and are attracting record levels of investment. Chile´s investments rose by 151 percent to $3.4 billion in 2015 and in January this year the Chilean government established a goal of reaching 70 percent of its electricity from renewable sources by 2050. Some of the fastest growth in renewable generation capacity came in Central America and the Caribbean, which expanded at a rate of 14.5%. Despite these advances, a lack of capital, vested interests and fossil fuel subsidies continue to stifle further progress.
Latin American cities can play a fundamental role in managing climate risk and building a low carbon economy. This month, the Mayor of Rio de Janeiro, Eduardo Paes, penned a joint op-ed stating that reversing climate change begins with the world's great cities. Low-carbon investments in the building, transport and waste sectors can generate massive global savings with a current value of US$16.6 trillion in the period to 2050, according to the Global Commission on the Economy and Climate.
Beyond these savings, clean urban transport systems can also be more cost-effective. The World Resources Institute shows that the development of low-carbon transport infrastructure is likely to be more affordable than the current approach favoring road infrastructure. A cleaner path toward transport infrastructure can bring down levels of pollution but is also feasible with current levels of finance.
The domestic ratification process for the Paris Agreement opens an excellent space to hold national conversations about the benefits of advancing cleaner engines of growth. For the first time, companies, citizens, mayors and financiers can join the debate and pressure lawmakers to ratify the Paris Agreement and chart a new path toward a cleaner and more resilient type of development.
Article originally published by Nivela.