Climate Change and Latin America: The Long Way to Copenhagen

Mauricio Cárdenas
Mauricio Cárdenas
Mauricio Cárdenas Visiting Senior Research Scholar, Center on Global Energy Policy - Colombia University, Former Minister of Finance and Public Credit - Republic of Colombia, Former Brookings Expert

October 23, 2009

Only a few regions in the world are more affected by climate change than Latin America. Yet, the region is not speaking with a strong voice, in part because a common perspective is lacking. The impact of climate change is already apparent through more frequent and severe tropical storms, as well as greater incidence of diseases like dengue fever. The melting of Andean glaciers and the subsequent floods and droughts are affecting agriculture and health. In fact, between 2001 and 2005 climate-related disasters had an impact on 7.5 percent of the population in lower-middle-income countries, up from 1.5 percent of the population in 1976-1980; while in higher-income countries this figure remains very low. Thus, it is imperative that Latin America considers global climate change negotiations in Copenhagen as a top priority.

To make matters worse, the last 20 years of deforestation should be a matter of concern. Emissions from land-use change and forestry represent a quarter of greenhouse gas emissions in middle-income countries and 50 percent in low-income countries. In Latin American alone, 686,000 square kilometers of forest were lost between 1990 and 2005. By a large margin, Latin America is the world’s region where more forests have been destroyed since the United Nations Framework Convention on Climate Change was adopted in Rio de Janeiro in 1992. Although there is some hope based on the recent actions adopted by Brazil and Mexico to curb deforestation, this remains Latin America’s top environmental challenge. The region is still a long way to reverse the trend and begin making positive contributions by gaining and not losing forest areas.

Widespread deforestation can bring problems in other areas apart from the environment. The U.S. Congress is considering a border tax on goods produced in countries that do not observe environmental standards. Although many question these measures as disguised protectionism—the idea is appealing to some politicians who worry about the costs U.S. firms will face resulting from the new climate change legislation. Keeping out competitors who do not adopt similar environmental practices seems to be the logical thing to do. Others worry about the lack of enforcement mechanisms in international agreements. Here again, tariffs seem to be the magic bullet. This should be a serious concern for Latin America—a region that depends heavily on trade with the U.S.—mainly because the track record in terms of emissions control is not favorable to the region.   

But U.S. legislation also provides opportunity. The proposed U.S. Senate legislation—as well as the bill that was passed by the House this past summer—includes provisions regarding international offsets to control costs (the estimates indicate that without offsets, carbon prices will double). This is a key mechanism that could allow Latin America to tap additional resources needed for climate change mitigation and adaptation. But how offsets will work is far from clear at this point. One of the few things that is known is that international offsets will have less value than domestic ones—1 unit of reforestation in the U.S. will count the same as 1.25 units abroad. Foreign governments should oppose this provision, which is at odds with the fact that the environment is truly a global public good.

Latin America will not be heard in the U.S. Congress or in international deliberations in Copenhagen unless it forms a solid bloc and pushes for greater equity in the allocation of commitments and resources to deal with climate change.

Finally, the costs of limiting environmental degradation can be significantly reduced if clean technologies are developed. Innovation in the North will be insufficient to prevent an environmental disaster unless those technologies are readily available in the South. Coordination and cooperation is critical if Latin America wants to play a role in the development of technologies that use renewable sources of energy. The region is in a unique position to supply biomass and geothermal energy. There is no compelling reason for duplicating efforts at the national level, when a regional solution could be more effective. A regional laboratory, funded in part by the U.S. would be the right way to go. This will allow countries of the hemisphere to find ways to produce wind, solar, and cellulosic biomass energy more efficiently.

Although countries from the Amazon Basin have already agreed to meet prior to Copenhagen, it is urgent that Brazil, Colombia, Costa Rica, Mexico, and Peru establish a broader and more formal subgroup for cooperation on climate change. Failure to do this will result in isolated and improvised measures by individual countries, rather than through more effective efforts, with a global impact.

Members of this subgroup should commit to price carbon explicitly, through a carbon tax or a cap-and-trade scheme, in accordance with universally agreed-on targets for combating climate change. They would also commit to greater efficiency in energy use. Members would support a global investment regime to help develop and share new technology on alternative energies, and reverse deforestation trends. All this can be done under the premise of differentiated responsibilities between developed and developing countries, as stated in the Rio Declaration.