By Guy Edwards.
As Latin American and Caribbean countries increasingly court Asia and especially China as a major trade and investment partner, there is remarkable potential to explore opportunities on environmentally sustainable activities which are crucial to global efforts to confront climate change. However, to date, the rapidly expanding trade ties between the region and countries such as China have focused primarily on high-carbon activities such as mining and fossil fuel extraction.
Currently, Latin America, the Caribbean and China account for roughly 36% of total global greenhouse gas emissions. With this in mind, a new discussion paper produced by the Climate and Development Lab and E3G looks to explore opportunities for low carbon development in four areas of Chinese-Latin American relations.
There is remarkable potential for China and Latin America and the Caribbean (LAC) to cooperate on renewable energy. China’s growing domestic renewable energy market and influence in exporting technology presents excellent opportunities to invest in clean energy. The conditions for renewables in Latin America and the Caribbean are encouraging, with over a dozen countries having established renewable energy targets, such as Chile’s Non-Conventional Renewable Energy Law which aims to produce 20 percent of the country’s electricity from renewable sources by 2025.
Urbanization, along with priority of improving air and water quality are currently at the top of the Chinese Government’s domestic agenda. China and Latin America and the Caribbean countries could benefit substantially from by sharing experiences on long-term sustainable urban planning. Across Latin America, cities are attempting to reduce emissions and adapt to climate impacts while improving the lives of citizens. These efforts include Quito’s Climate Action Plan and Mexico City’s Green Plan.
Environmental and carbon footprint
Attempts to reduce the environmental and carbon footprint of Chinese-Latin American activities could have multiple benefits, as many countries are working toward meeting their voluntary emission reduction goals. For example, China recently announced that it would peak CO2 emissions by 2030 at the latest, and increase the share of non-fossil energy carriers of the total primary energy supply to at least 20%. Peru, Brazil, Chile and Mexico have also pledged to reduce greenhouse gas emissions.
Climate finance architecture
The ongoing evolution of the global financial architecture is likely to have far-reaching implications for Chinese-LAC relations. “For example, China is working with the other major emerging economies known as the “BRICS” (Brazil, Russia, India and South Africa) to establish a New Development Bank (NDB) with $50 billion in initial capital to fund infrastructure projects.” The NDB will finance infrastructure and “sustainable development” projects in the BRICS countries initially, but eventually other developing countries will also be eligible to apply for funds. This is particularly relevant for Latin America and the Caribbean where countries need to develop their energy infrastructure, improve access to energy while developing plans for low carbon development.
How the New Development Bank interact with or work alongside the Green Climate Fund for instance, will have implications for how the region’s countries seek to attract finance for implementation of their “Intended Nationally Determined Contributions” (INDCs).
China is making positive progress on the green finance agenda, which is already generating valuable lessons for Latin America and the Caribbean that are facing similar challenges to China in building a financial system that supports the transition to a low carbon and sustainable economy.
The economic slowdown in Latin America and the Caribbean and in China is no excuse to undermine environmental or climate policies and attract foreign investments for short terms gains. Instead it presents an opportunity to set Latin America and the Caribbean on the path toward creating low-emission and resilient economies.
The newly created China-CELAC (Community of Latin America and Caribbean States) Forum has the potential to be a transformative platform to reverse what is thus far a high-carbon partnership between Latin America and China. The region could use the Forum as means to engage with China on taking action on climate change within their bilateral partnerships; ensuring that relations positively contribute to efforts towards an ambitious and equitable global climate agreement. In fact, this relation with China could prove pivotal to the efforts to respond to climate change in Latin American and Caribbean.
Guy Edwards is a research fellow and co-director of the Climate and Development Lab at the Institute at Brown for Environment and Society, Brown University. He is the co-author of a new book to be published by MIT Press this October with Professor Timmons Roberts called A Fragmented Continent: Latin America and the Global Politics of Climate Change. Follow Guy on Twitter @GuyEdwards.