COP25: A Latin American summit... held in Madrid
Madrid is currently hosting COP25, the Conference of the Parties to the UN Convention on Climate Change (UNFCCC). Yet this climate conference is closely associated with Latin America: Brazil was the original host for the summit, but those plans were changed. Chile then stepped in and, although it could not ultimately host, it still holds presidency of the conference. While the COP 21 brought an agreement on the Paris Agreement “rulebook” and the countries pledged to work toward keeping this century’s global temperature rise below 2° Celsius, in Madrid leaders are tasked with fleshing out the measures needed to reach the agreed climate goals. Garrigues, which has a broad presence in Latin America, has compiled this summary of the climate plans in place in the different countries in the region.
Chile
According to the UNFCCC, Chile is a developing country vulnerable to the effects of climate change. The country has therefore taken part in international discussions and processes on climate change, starting with the ratification of the UNFCCC in 1994 and of the Kyoto Protocol in 2002, and reaching a new milestone with its current presidency of COP25. Chile has been an active participant in the Kyoto Protocol’s Clean Development Mechanism, with 100 projects registered and CO2 emissions reduced by 29 million tons (carbon credits issued) to date. In addition, in the Paris Agreement (2015), Chile undertook to cut its emissions by 30% by 2030 through the promotion of clean energies, particularly those from renewable sources.
Addressing the issue from a different playing field, the country has strengthened institutional involvement and environmental regulations. For example, it created the Ministry of the Environment and Environmental Courts and rolled out several new green taxes, a system for assessing the environmental impact of projects and new framework legislation to encourage recycling. Moreover, a climate change bill is currently before the Chilean legislature, which would establish mitigation measures as well as adaptation actions and which would set the goal of a net zero carbon footprint by 2050.
In light of the above, the agreements that will be reached at COP25 will be particularly important for Chile, especially in connection with the market or flexible mechanisms that seek to boost voluntary cooperation between countries in cutting greenhouse gas emissions (article 6 of the Paris Agreement). This is because these mechanisms can act as a catalyst in national climate action, generating investment incentives by providing a carbon price signal to the private sector, which is key for internalizing and addressing both present and future climate change risks.
COLOMBIA
As a party to the United Nations Framework Convention on Climate Change (the Paris Agreement), Colombia has been working to fight deforestation, reducing this practice by 10% from 2017 to 2018.
Colombia’s goal is to demonstrate that a country can reduce the effects of climate change without sacrificing competitiveness. The Colombia Ministry of the Environment’s policy prescribes that the efficient use of natural resources must go hand-in-hand with economic growth. The ministry aims to demonstrate this through the implementation of the National Circular Economy Strategy, which calls for the transformation of traditional manufacturing systems and consumer habits in order to create environmental, economic and social benefits, by promoting the efficient use of materials, water and energy, assessing ecological resilience and ensuring the circular flow of materials.
As envisaged in the National Circular Economy Strategy, Colombia has set the following targets: (i) increase recycling and reuse of waste by 17% by 2030; (ii) reduce the list of water quality monitoring points with poor ratings from 29 to 20; and (iii) cut greenhouse gas emissions by 36 million tCO2eq.
Colombia has also ratified its commitment to the Energy Transition Coalition, a regional initiative that aims to increase the weight of renewable energies to 70% of installed electricity capacity in Latin America and the Caribbean by 2030.
PERU
Accordingly to publicly available information, at the COP25 in Madrid, Peru hopes to announce the progress reached in the ninth year of its 2011-2021 National Environmental Action Plan. This plan lays out strategic actions and activities by key institutional players in collaboration with larger society, in order to meet the goal, by 2021, of reducing the country’s greenhouse gas emissions by 47.5% and improving the environmental performance of 100% of medium and large mining and energy companies, thereby helping to resolve the main environmental challenges and thus improving the quality of life of Peruvians through sustainable development.
The Peruvian delegation also aims to present the Nazca Ridge National Reserve, an innovative marine conservation proposal (touching on one of the key issues for COP25) to protect this 5,200 km2-long undersea mountain range located off the coast of Peru and to raise the percentage of Peruvian waters protected by the country from 0.5% to 7%, bringing it much closer to the 10% target the country undertook before the United Nations.
In terms of legislation, the country took a decisive step forward with its new Framework Law on Climate Change, issued in 2018. The Ministry of the Environment expects that the law’s implementing regulations will be approved in the last quarter of 2019, once the dialog channels the ministry has created for indigenous populations to participate in the lawmaking process have been wrapped up. In July 2019, the Peruvian government approved the new Regulations on Environmental Protection in the Electricity Industry, which aim to foster and regulate environmental management in the generation, transmission and distribution of electricity, thereby reducing the negative environmental impacts of these businesses.
BRAZIL
The fires that ravaged the Amazon during 2019 were one of the most concerning environmental events for the international community as a whole, which has asked Brazil to present a detailed plan for making good on its commitment to fight climate change. Brazil’s biggest challenge for COP25 will be to recover its privileged position as a country with major potential to attract environmentally sustainable investments in the agricultural, technological, manufacturing and renewable energy industries.
Brazil’s agricultural industry accounts for nearly half of the South American giant’s exports and approximately 21% of its GDP, which means the country is required to present, at COP25, data evidencing the sustainability of this industry, as well as the use of low emission technologies and compliance with forest legislation. In that regard, the industry itself has been urging the Brazilian government to take on environmental commitments to avoid undermining its leading position in the international market.
MEXICO
The Mexican government will participate in the negotiations taking place during COP25, seeking to move forward in its multilateral agenda and strengthen its position as a regional leader in the fight against climate change. As part of the country’s commitments, it plans to review and update its nationally determined contributions (NDCs) through its General Law on Climate Change. In keeping with the international commitments assumed under the Paris Agreement, by 2030 Mexico will have to unconditionally reduce its greenhouse gas emissions by 22% and its black carbon emissions by 51%, with respect to the baseline. Mexico is currently revising its NDCs in order to present an updated document in 2020.
In the context of COP25, the Mexican government’s key objective is to strengthen the international climate scheme by finalizing the pending issues under the Paris Agreement Work Programme (PAWP).
Within the country, the Secretariat for the Environmental and Natural Resources (SEMARNAT) recently launched a pilot emissions trading scheme (no economic impacts). To achieve the national targets for reducing greenhouse gas emissions, Mexico’s General Law on Climate Change envisages the creation of an emissions reduction system to be set up in two progressive phases: an initial phase, consisting of the pilot emissions trading scheme, and an operational phase to start at the end of the transition period from the pilot program. Set to run for 36 months starting on January 1, 2020, the pilot program will apply to any plants operating in the energy and manufacturing industries whose annual emissions were equal to or higher than 100,000 tons of direct carbon dioxide in 2016, 2017, 2018 or 2019.
In the energy industry, the oil and gas exploitation, production, transmission and distribution sub-industries and the electricity generation, transmission and distribution sub-industries will be subject to compliance with the program. The manufacturing sub-industries participating in the system include automotive production, cement and lime, chemicals, food and drink, glass, iron and steel, metallurgy, mining, petrochemicals, pulp and paper. The pilot program will be split into two stages: the pilot phase, between January 1, 2020 and December 31, 2021, and the transition phase from the pilot program to the operational phase, between January 1 and December 31, 2022. Before the pilot phase starts, SEMARNAT will publish a cap on the annual number of emission allowances it will issue during the pilot program, along with the quantity of free emission allowances for each participant during the three compliance periods. The free emission allowances will be deposited in participants’ Monitoring System accounts by October 24 of each year, starting in 2020.