New hope for progress on forests, energy


For years, environmentalists in Latin America have watched with dismay as forests in the region have been picked apart by road construction, logging, mining, oil drilling, monocrop agriculture and more. While Latin America has the world’s largest expanses of tropical forest, its woodlands have been disappearing at an astonishing rate, with over 3 million hectares (11,600 sq miles) lost in 2013 alone. Scientists argue that if the trend continues unchecked, the impact on the world’s climate, not to mention on forest people’s livelihoods and biodiversity, could be catastrophic.

With similar frustration, environmentalists have seen fossil fuel use continue to grow in the region, despite Latin America’s possession of some of the world’s greatest potential in non-hydroelectric renewable resources. Given the region’s immense possibilities in solar, wind and geothermal, Latin America’s continued reliance on highly polluting fuels like oil, gas and coal for electricity generation has seemed like a huge opportunity wasted.

Small wonder, then, that environmentalists in the region celebrated when representatives of 195 countries this month capped the United Nations climate summit in Paris with an accord that commits nearly the entire global community to reducing greenhouse gas emissions. The accord, they say, will help cut the use of fossil fuels, boost the use of renewable energy and spur protection of forests. Environmentalists acknowledge they have little to go on besides expressions of intent from the world›s nations that could be minimally honored or even shelved. Nonetheless, they say, the Paris deal marks a very large step forward, including, for the first time in such an accord, the explicit mention of forests as a way to reduce greenhouse gas emissions.

“This is the first time in a United Nations agreement that forests have received an explicit mention as an important component in fighting global warming,” says Josefina Braña-Varela, the policy director for the Global Forest and Climate Program at the World Wildlife Fund (WWF). “It sends an important signal to country leaders that there is strong international consensus that reducing deforestation is crucial to reducing global greenhouse gas emissions, and therefore must take immediate action.”

A poll of more than 45,000 respondents around the globe conducted by the Pew Research Center from late March to late May of this year found that 74% of Latin Americans judged climate change to be a very serious problem, the highest percentage of any region in the world. Drought, an issue closely related to forest loss, registered as the biggest concern. Nonetheless, analysts say, the region continues to be stuck on a high-carbon path of oil and gas extraction as well as deforestation-intensive livestock and crop production. (See “Region brings contradictions to climate talks,”—EcoAméricas, Nov. ’15.) That has created a division in the region both between citizens and their governments and within governments themselves, as environmental ministries and forest agencies favoring low-carbon approaches face off against oil, mining, finance and trade ministries pushing traditional, carbon-intensive development.

The Paris agreement, scheduled to take effect in 2020, could change those dynamics, analysts say. By involving nations representing 96% of global carbon emissions—compared to only 14% of emissions under the existing Kyoto Protocol—it gives near universal backing, albeit thus far only in writing, to a radical shift toward renewable energy and forest protection. By calling for a robust system of monitoring, verification and reporting, with an external group of monitors, it helps ensure that emissions reductions will be transparently communicated. And by reiterating the need for US$100 billion by 2020 to help developing countries deal with climate change, it adds confidence that money will be available for developing-world efforts at mitigation and adaptation, many analysts say.

Experts say that when taken together, such provisions provide a measure of cover to political leaders willing to push key sectors such as energy and agriculture toward a lower-carbon pathway. “The fact that nearly every country has a target and is committed, that’s a game changer,” says Thomas Black-Arbeláez, executive director of the Andean Center for Economics in the Environment (Caema), a think tank in Bogotá.

For years, Latin America felled forests for beef, soybean and African palm production. But simultaneously, the region became a global leader in the use of Redd+, a mechanism that promotes the reduction of carbon emissions from forest deforestation and degradation by providing an economic incentive for woodland protection and sustainable management. Latin America and the Caribbean attracted nearly one-third of all money pledged globally for Redd+, or roughly US$2.4 billion during 2006-14. Most of that money flowed to so-called readiness funds used for such purposes as improving government’s institutional capacity in the forestry sector and granting land tenure to forest communities. Moreover, the overwhelming majority of it came from multilateral organizations such as the United Nations and the World Bank, and from donor governments including Norway, the United States and Germany. There is a lack of compliance markets where Redd+ emissions-reduction credits could attract private investment. The result is that at this stage Redd+ is still in its infancy, with a relatively small portion of funds flowing directly to forest-conservation work on the ground. Analysts agree that the mechanism has yet to generate anywhere near the funding needed to establish a powerful, region-wide incentive for woodland protection.

A similar problem of underinvestment affects the renewable energy sector. Latin America and the Caribbean have some of the world’s greatest and most diverse potential renewable energy resources, with huge potential in solar, wind and geothermal energy. But apart from energy from large hydroelectric plants, which account for 51% of the region’s energy capacity, other resources have been neglected. Over the last five years, Latin American governments have established numerous measures to advance renewable energy, including renewable energy targets, new regulatory systems, special power auctions, and tax breaks for alternative technologies. In 2014, Latin America’s solar market grew by 470% adding 625 megawatts of solar capacity, and wind power rose 326% with around 4 gigawatts of new capacity. But the amounts spent on renewable energy were dwarfed by fossil fuel subsidies worth around $500 billion per year. And fossil fuels such as oil, gas and coal still represent around 40% of energy capacity in Latin America and the Caribbean, while non-hydro renewables are still struggling, with geothermal at 3%, wind at 2% and solar at less than 1%.

While the Paris agreement offers an opportunity to alter those circumstances, it also dovetails with new technological advances that could speed the advancement of Redd+ and renewables. One of the biggest handicaps for attracting donor funds or establishing a trading market for Redd+ in the past, for example, has been the inability to reliably measure changes in forest cover and forest carbon in the interest of a pay-for-performance system. Over the last five years, however, scientists have revolutionized their ability to measure such differences using satellites and remote sensing from aircraft.

One such technology, the Light Detection and Ranging (Lidar) system employs a laser pulse to penetrate the forest canopy and generate high-resolution, three-dimensional images of the trees and plants below. Lidar has been used from airplanes to generate information that, when combined with field measurements, helped countries like Panama and Peru establish a baseline of their carbon stocks. It also has been used to track the rate at which carbon is being released into the atmosphere on account of deforestation and other land-use changes. New applications being developed by scientists will allow Lidar to be mounted on the International Space Station to generate such measurements across the entire tropics with even lower error than before.

“One of the major limitations to the development of cap-and-trade systems which can include Redd+ has been the ability to map, monitor and verify changes in the amount of carbon in forests and the associated emissions from deforestation and degradation,” says Scott Goetz, the deputy director of the Woods Hole Research Center and a key member of a team developing the Space Station application. “I think that will give people greater confidence to move ahead with pay-for-performance systems, including those that are market-based.”

Dramatic drops in the cost of renewable energy, meanwhile, could potentially cause a significant evolution in the way that energy is employed. During 2009-14, the costs of solar modules fell 75% and by one-third to two-thirds for utility-scale solar-energy plants, according to the International Renewable Energy Agency, an intergovernmental body that helps countries transition to renewables. Greater efficiencies in wind power, including taller towers and longer blades, are making that resource competitive as well. As a result, over the last two years, wind farms have won numerous open bids for power supply on the Brazilian market and are now seen as more competitive than natural gas in several countries, including Uruguay, Mexico, Brazil and Nicaragua, according to “Zero Carbon Latin America,” a report released in November by the United Nations Environment Program (UNEP).

That still leaves the problem of the fossil fuel subsidies, which analysts say must be eliminated to allow renewables to compete on an even playing field. There’s also the challenge of the greater variability of renewable power—the sun doesn’t always shine; the wind doesn’t always blow—which could be solved by creating regional grids across countries that would allow nations to share and coordinate their energy storage and production. But those modifications are well within the capacities of governments to carry out now, analysts say. And, if they do, and improvements in energy storage technology continue to be made, a new era in renewable energy could take shape.

“The time for renewables has arrived in Latin America,” says Walter Vergara, a forestry and climate expert at the World Resources Institute and lead author of the UNEP report. “They already are financially attractive. And if we eliminate some barriers, including the subsidies, the private sector will invest more and speed the transition to more sustainable systems that could allow Latin America to power all its economies with zero carbon.”

Those changes will not happen overnight. Major oil producers in Brazil, Mexico, Argentina, Bolivia, Ecuador, Colombia and Peru continue frenetic efforts to attract foreign investment for oil and gas production, both conventionally and, in Argentina and Mexico, by means of hydraulic fracturing, or fracking. New natural gas plants continue to be built on a large scale across the region. And the expansion of beef, soybean, and African palm operations continues to expand across carbon-rich woodlands in the Amazon, the Gran Chaco and Mesoamerica as market forces ranging from China’s growing appetite for meat to continued world demand for palm oil persist.

At the same time, resistance is building as economic players become aware of the stakes involved in having to decarbonize their productive processes under the Paris agreement. “Representatives of industry, energy, agriculture, and transport see that they are going to be forced to reduce emissions and they are not happy,” says Black-Arbeláez from his experience in Colombia. “They are meeting behind closed doors, lobbying and jockeying for position with the government to ensure that they don’t get hit with a higher reduction quota than other sectors and that their international competitiveness is not affected.”

On the positive side, there is also much creative discussion that will have huge implications for Latin America. Nations will have to decide how they put a price on carbon that will drive sectors into cleaner modes of production. Will they impose a carbon tax? A cap-and-trade system? A mixture of the two? And will they seek bilateral arrangements in which their national system can be linked with that of another country for international trading of emissions reductions, as Brazil and the European Union are contemplating?

“All the options are on the table,” says Black-Arbeláez. “The next five years will be a fascinating time as different sectors within governments negotiate and governments determine which systems are most flexible, cost effective and provide the most collateral benefits.” The results, he adds, “will have immense implications for climate change, development and the quality of life.”

Though Latin America generates only just under 10% of global emissions, its emissions from transportation and agriculture are rising. Given that trend, experts say it is crucial that the region begin moving away from carbon-intensive activities now.

The International Energy Agency forecasts a 33% increase in Latin America’s per capita energy-related emissions during 2005-30. Meanwhile, severe drought in Brazil, Colombia and Venezuela over the last couple of years has brought home the growing effects of climate change, as have intense rains and flooding in both Mexico and various parts of South America. By the end of the century, according to projections of the UN Intergovernmental Panel on Climate Change (IPCC), temperature rises could result in sharply curtailed production of corn, beans and rice; a severe cut in supplies of potable water and hydroelectric power due to drought and the disappearance of tropical glaciers; and sea-level rises that will bring more flooding and erosion to highly populated coastal areas, especially those vulnerable to tropical storms.

Under the Paris agreement, countries are expected to meet every five years to review their emissions-reduction commitments and consider the possibility of more ambitious reduction goals. Should Latin America take on greater targets and aggressively move to implement reforms across its economies, it might not only transform its resource-extraction economic model, but stave off the worst impacts of climate change on its own populations, doing its part in the process to save the planet.

- Steven Ambrus

Thomas Black-Arbeláez
Executive Director
Andean Center for Economics in the Environment (Caema)
Bogotá, Colombia
Tel: +(571) 341-3477
Josefina Braña-Varela
Policy Director of Global Forest and Climate Program
World Wide Fund for Nature (WWF)
Washington, D.C., United States
Tel: (202) 293-4800
Scott Goetz
Deputy Director
Woods Hole Research Center
Falmouth, MA, United States
Tel: (508) 540-9900
Walter Vergara
Senior Fellow
World Resources Institute
Washington, D.C., United States
Tel: (202) 729-7600