THIS WEEK: NAFTA renegotiation begins, Argentina renewables auction, Colombia climate change law

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Feature: NAFTA Renegotiation and the Planet

The first round of talks for the renegotiation of the North American Free Trade Agreement (NAFTA) began this week as negotiators from Mexico, Canada and the United States gathered in Washington, DC. The outcome of the renegotiation will have significant repercussions on the climate, environment and people. Given the priorities of the current US administration, discussions related to energy may focus on oil and gas – ignoring climate change implications. In this context, experts from Mexico’s Center for Environmental Law (CEMDA) and the Center for Economic Research and Education (CIDE) point to opportunities for Mexico and Canada to work with US states and cities to advance on climate and energy goals and move toward the target, announced during the 2016 North American Leaders Summit, of achieving 50 percent clean and renewable energy in North America by 2050. (El Universal, 8/13/2017)

NRDC Latin America Project’s Amanda Maxwell describes how the renegotiation of NAFTA should set a high bar for protecting people and the planet and lays out three priorities for doing so: eliminating the Investor-State Dispute Settlement Mechanism; including climate change considerations; and ensuring strong and enforceable environmental and labor standards (in Spanish).

Climate Change

In addition to the ongoing national political and economic crisis, people in southern Venezuela have experienced strong flooding this past week due to intense rains after three years of drought and extreme heat. The unusual weather also caused the country’s principle hydroelectric dam, Guri, to overflow and contribute to the flooding. Members of the Venezuelan legislature took to social media to post updates of the flooding in their regions, specifically in the state of Bolivar. (Efe via Huffington Post 8/7/17; Venezuela Grita via YouTube 8/6/17; El Colombiano 8/6/17)

Colombia’s Minister of Environment and Sustainable Development, Luis Gilberto Murillo proposed a new law this week to lay the groundwork for how the country will fight climate change and meet its climate commitments under the Paris Agreement. The bill outlines the institutional arrangements, instruments, and responsibilities of the government, and establishes guidelines for climate change management. The minister also noted that the proposal aims to attract private investment in the country’s climate change efforts by creating “tradable quotas” or an emissions trading market. (Semana 8/11/17)

Subnational governments in Latin America are also taking climate action. The Mexican state of Baja California created a State Climate Change Council to manage efforts to reduce greenhouse gas emissions and contribute to the national climate change goals. Officials noted that Baja California has assumed the challenge of reducing per capita emissions from 5.39 million to 4 million tons of CO2, which they estimate should save the state 24,676,000,000 pesos (approx. US$ 1.4 billion). (El Vigia 8/16/17)

Clean Energy

Latin America is steadily undergoing an energy transition and boosting renewable energy development. Since 2004, the region has seen an 11-fold increase in investment in renewable energy, nearly twice the global rate. Three of the world’s top ten renewable energy markets are in the region: Chile, Mexico, and Brazil. Chile which recently launched operation of Cerro Pabellón, South America’s first geothermal plant, is leading the way. In response to severe droughts that limited hydroelectric output and a lack of domestic fossil fuel resources, Chile has increasingly turned to its abundant solar, wind and, now, geothermal resources to power its economy. The growing clean energy sector has helped bring down energy costs and brought reliable energy service to remote rural communities. Chile has in place an ambitious target of producing 70 percent of its electricity with non-fossil fuel sources (including large hydro) by 2050, but officials believe the country will surpass this goal and be closer to 90 percent. (New York Times 08/12/2017 English and Spanish)

Generating Green Energy in a Chilean Desert Daily 360 | New York Times (Ernesto Loñdono, Veda Shastri and Kaitlyn Mullin)

As part of its efforts to promote renewable energy, Chile has adjudicated the program “Development of Solar Photovoltaic Technologies for Desert and High Radiation Climates”. The primary objective of the program is to develop solar technologies with improved durability and performance adapted to the unique and extreme conditions of the Atacama Desert. The ten-year program aims to reduce the levelized cost of energy to US$ 25 / MWh by 2025 and help develop a local services and production industry. The winning consortium includes both national and international institutions bringing private co-financing. Chile, through its Production Promotion Corporation (CORFO), will provide a subsidy of up to 70 percent of the cost of the program, up to a total of 8 billion pesos (approximately US$ 12 million). (El Mostrador, 08/14/2017 2017).

Argentina is also taking steps to expand its renewable energy sector. On Thursday, the government launched the latest renewable energy auction under its RenovAr program. The Renovar 2 auction seeks to award 1,200 MW from wind, solar, biomass and other clean energy projects. The World Bank is providing US$250 million dollars as guarantee and, as in previous rounds, bidders must demonstrate they are “financially solid”. Bidders must also have a minimum net worth of US$250,000 per MW of power offered. Auction terms and the official resolution can be accessed here and bids will be reviewed between October 19 and November 23. (El Cronista 8/17/2017)

Transportation

Chile’s transportation sector is looking towards a cleaner future. The Metro system in Santiago will be powered 76 percent by renewable energy as of early 2018. The state-owned company signed an agreement with Latin American Power and Sunpower to provide them with the energy. The solar-PV plant located in La Higuera and known as El Pelícano will provide 42 percent of the power, while the San Juan Aceituno wind farm in Freirina will supply 18 percent. The distribution company should supply the remaining 16 percent. Rodrigo Azócar, Metro president, highlighted that these kinds of efforts contribute to the country’s goal of generating 20 percent of national electricity with renewables by 2025. Currently, renewable generation represents 17 percent. (La Tercera 8/15/17)

Chile is also a potential economic winner as the world transitions towards more electric vehicles. Several European countries have pledged to stop allowing the sale of fossil fuel-powered vehicles –Holland and Norway in 2025, France and the U.K. in 2040—and other countries like China have planned enormous infrastructure projects to support electric transport. This shift could lead to a tripling in the demand for lithium by 2022 and high global price for copper. Chile is among the world’s few countries with a huge supply of lithium, which is found in the country’s northern desert. The head of Antofagasta Minerals, one of Chile’s leading copper mining companies, underscored the potential growth of copper demand by noting that “a conventional car requires 20 kilos of copper, but an electric one needs 80 kilos.” (El Mercurio via Revista Electricidad 8/14/17)

In Guatemala, people are also considering a future where more electric vehicles help improve the environment and air quality. Economics could help incentivize people to buy these cleaner cars. Presently, car owners pay a 25 percent tax on imported fossil fuel-powered cars, but only five percent for electric vehicles. The electric company Empresa Eléctrica (Eegsa) is working with current vehicle owners to measure how much they are paying for each battery charge, and is planning to create stations throughout the capital city over the next five years. (Prensa Libre 8/13/17)