The climate change talks this month in Durban, South Africa, generate a platform to continue advancing in the short and medium term. On the one hand, after two weeks of negotiations, delegates of 194 countries agreed on a set of measures that could force all major greenhouse gas emitters to adopt a binding plan of action by 2015 to slow global warming.
On the other hand, the international community recognized the urgent need to do more to reduce greenhouse gas emissions, to keep the rise in the average global temperature below two degrees Celsius and to help developing countries adapt to the inevitable effects of climate change.
What Does this Really Mean for Latin America and the Caribbean?
Although Latin America has a clean energy matrix and contributes proportionally less to climate change compared with other regions, it is one of the most affected by the impacts of these emissions. Several countries of the region demonstrated strong leadership in becoming part of the global solution required to steer the world towards low-carbon development.
Brazilian President Dilma Rousseff said that climate is a fundamental issue for countries and humanity. Brazil has already agreed on some ambitious voluntary targets to reduce emissions by 39% by 2020. Many other Latin American countries also assumed voluntary commitments, notably Mexico, Colombia, Chile and Costa Rica.
According to a World Bank study entitled Low Carbon, High Growth: Latin American Responses to Climate Change, thanks to its clean energy matrix and innovative policies to promote low-carbon growth, Latin America produces just 6% of global greenhouse gas emissions in the energy sector and 13% if deforestation and agriculture are taken into account. Latin America’s relatively low level of emissions is largely due to the widespread use of clean energy produced by hydroelectric plants.
Nevertheless, this situation may change over the next 25 years with the growth of the transport and manufacturing sectors. If current regional trends continue, CO2 emissions from energy consumption will increase by an estimated 33% per capita (surpassing the global average of 24%) by 2030. Should this occur, the citizens of Latin America, especially those living in conditions of extreme poverty, will be greatly affected by the impacts of climate change.
Towards Green Growth
Latin America has shown that is capable of furthering “green” growth or development, which does not mean anything other than to generate clean energy alternatives that are also economically viable and generate job opportunities in advanced industries.
“Economies that manage to become greener will be more competitive in the future,” said Ede Ijjasz-Vásquez, World Bank director of sustainable development for Latin America and the Caribbean. He added that much of the research on the topic indicates strong synergies among economic efficiency, efficiency in the use of resources and limited environmental impact.
For example, increased energy efficiency often saves money; reducing deforestation has both social and environmental benefits; and better public transport systems can reduce congestion and local pollution, benefiting citizens’ health, productivity and quality of life. Moreover, the expansion of renewable energy outside the power grid can help cover service demand among underserved rural populations.
A World Bank study in Mexico found that between 2008 and 2030, CO2 emissions could be reduced by about 15 million tons if the country improved the efficiency of residential, commercial and industrial lighting.
Alternative Financing Sources
Although several countries of the region expressed concern about the amount of funds available to adapt to the effects of climate change, the region can take advantage of international mechanisms to finance low-carbon technologies and develop new comparative advantages.
The Durban Conference made some progress with the technical details of the Green Climate Fund, which was initially agreed upon at the Cancun Conference last year. The goal is to raise US$100 billion for this fund by 2020. Latin American countries could use this fund to help adapt to climate change impacts and reduce their emissions.
In addition, at the Durban Conference, the SIDS-DOCK initiative, also launched in Cancun in 2010 and which supports clean energy efforts of the world’s small island developing states, received US$15 million from Japan to add to the initial US$14.5 million pledged by Denmark. Some of the projects supported by this initiative are already underway. These focus on funding alternative energy feasibility studies in Caribbean nations and the interconnection of the region’s electricity markets.
“This initiative will not only help increase energy independence and build resilience for these nations, but it will also allow them to lead – to demonstrate innovative mitigation strategies in the face of resource constraints,” said Andrew Steer, World Bank special envoy for climate change.
To assist developing countries in accessing financing for low-carbon investments and to enable them to take advantage of carbon markets after 2012, the World Bank launched two new financial initiatives: the Carbon Initiative for Development (Ci-Dev) and the third phase of the BioCarbon Fund.
Many observers believe that the Durban agreement represents a step forward; however, many tough negotiations lay ahead before a global agreement can be reached.
The World Bank will continue to mobilize funds from all sources and to support the region in its transition toward more ecological growth, preparing plans for low-carbon development that help the poor escape from poverty, increase their capacity to adapt to the effects of climate change and reduce greenhouse gas emissions.
To complement these alternative sources of financing, the World Bank launched a new climate change website as well as the Apps for Climate competition for the creation of software applications to help solve the development problems that climate change poses.
The World Bank currently finances 200 climate change projects in Latin America and the Caribbean for some US$5 billion.