Climate Change was a central topic in President Obama´s recent State of the Union. In harbinger fashion, Obama’s SOTU gave a wealth of examples to demonstrate that climate change is an opportunity to innovate technologically and politically, and to reap significant and durable economic benefits.
During the 1950s of Soviet Sputnik satellites, he said, “we didn’t argue about the science or shrink our research and development budget” clearly referring to the rumblings of skeptics on human-induced climate change. Much to the contrary, the US response was substantial research and development budgets which after 12 years made the moon landing possible. Obama called for “that same level of commitment when it comes to developing clean energy sources.”
According to Obama, clean energy is good, lasting business: “Even if the planet wasn’t at stake, even if 2014 wasn’t the warmest year on record –until 2015 turned out to be even hotter—why would we want to pass up the chance for American businesses to produce and sell the energy of the future?” And private investment needs enabling public policy: the Obama Administration’s Clean Power Plan sets standards to reduce CO2 emissions by 32% from 2005 levels by 2030, and would enable 30% more renewable energy generation in 2030. California’s recent legal target is 50% of electricity generated from renewables by 2030.
U.S. clean energy investments have made wind energy cheaper than from conventional sources, and solar energy saves Americans tens of millions of dollars and generates better-paid jobs than those in the fossil-fuel industry. A top-seven indicator of a strong economy –including more jobs, less unemployment, lower deficit, fewer uninsured people, fewer troops in Iraq and Afghanistan, and marriage equality—is the “reinvented energy sector” with wind and solar power supply increasing from 26,000 MW a 96,000 MW during Obama’s tenure. For comparison, Latin America’s largest hydropower plant of Itaipú, along the Paraguay-Brazil border, has an installed capacity of 12,600 MW: that means a whopping eight Itaipús of solar and wind energy deployed in the US over the last seven years. We are talking megawatts and mega dollars: Bloomberg New Energy Finance estimates US$300billion went to clean energy in 2015. China accounts for one-third of it, aided by strong political support for solar and wind projects which help meet growing demand and reduce alarming air pollution levels. The US and Europe accounted jointly for about half as much investment.
However, one of the phrases I´ve personally scored on his speech was: ¨Rather than subsidize the past, we should invest in the future¨ This particular phrase made me think about our region…
What does this mean for Latin America and the Caribbean, given the region’s considerable endowment of solar, wind, geothermal and other renewable resources? Is there political support for this shift to clean energy?
Now at the center of political discourse in Paris, Washington and Davos more recently, climate change and clean energy have yet to be in LAC’s spotlight. At this stage, Uruguay’s wind and Chile’s solar deployment are well-targeted investments into the region’s future; both have domestic political support. Unencumbered, all LAC countries have a political opportunity to hone-in on their energy future policies to build strong economies by reducing climate and financial costs, creating jobs and increasing human welfare.
For all these reasons, I would like to see the challenges and opportunities posed by climate change discussed in government roadmaps and political campaigns –for instance, in races in Dominican Republic, Peru and Nicaragua this year. In the LAC region, it seems the mantra “no subsidizing the past and investing in the future” could turn out to be a win-win slogan both in business and at the polls.