On February 2, the Embassy of Argentina in the United States and the World Resources Institute hosted an event at which Argentina’s minister of environment and sustainable development, Juan Cabandié, presented the country’s latest climate strategies and updates to its Nationally Determined Contributions under the Paris Agreement. A panel also discussed Argentina’s climate and energy goals, their role in regional and global efforts, and opportunities for cooperation. Lisa Viscidi, director of the Energy, Climate Change & Extractive Industries Program at the Dialogue, spoke about how the Biden administration could engage with Argentina, and with Latin America and the Caribbean more broadly, on areas such as clean energy, climate change adaptation, and conservation.
COMMENTS BY LISA VISCIDI:
“I think that the renewed focus on climate change in the United States provides a great opportunity for the US to increase cooperation with Latin America. The Biden administration has made it clear that climate change is going to be an integral part of foreign policy. The administration might be tempted to focus mostly on other regions of the world first, particularly Asia, home to the fastest-growing emitters (China and India), and Europe, home to some of the countries that are most committed to partnering and tackling climate change. But I want to argue that the climate team should start with Latin America, and that there are actually a lot of issues on which both the US and countries in the region could benefit from cooperation, including clean energy, climate change adaptation, and conservation.
First, it’s important to acknowledge that some Latin American countries have really been leaders on clean energy and the energy transition in many ways. For example, South American countries pioneered the concept of renewable energy auctions, which has been very successful, and Brazil is a leader in biofuels. But in spite of this, in general I think that Latin America needs to do a lot more to accelerate the energy transition. There is a great need to reduce demand for fossil fuels and put more sustainable, low-carbon energy systems in place for the future. This requires capital and the deployment of new technologies, and this is going to be a big challenge for Latin America, especially following the severe economic contraction resulting from the pandemic. I think the US is very well positioned to help fill this gap.
Now, the US cannot oblige its private companies or its private banks to invest in and lend to Latin America the way that China does, but the US can make targeted investments through, for example, its development credit agencies. These investments, coupled with technical assistance on policy and regulatory frameworks, could help incentivize private sector investment. I think that would be the approach the US could take. Many Latin American and Caribbean countries really need to step up their deployment of modern clean technologies – smart grids, electric vehicles, and energy storage are just a few examples of the technologies that need to be introduced on a mass scale to move toward low-carbon economies. The US government could better position its companies to provide some of those investments, and this, in turn, would also help the US economy.
To give one example in Argentina, many companies have been awarded contracts to develop renewable energy projects, but projects haven’t come online on time, in large part because they have been unable to access financing. I think this is one example of how loans, or equity investments through the Development Finance Corporation, our development credit agency, which now has an expanded mandate and more tools at its disposal, could help to crowd in private sector investment if the right policy incentives for renewables are in place.
I also think it’s important to talk about adaptation because, in some ways, Latin America and the Caribbean is the most vulnerable region to climate change. We are already seeing more severe hurricanes, especially in the Caribbean and Central America. Drastic changes in rainfall patterns in the Andean region and the Amazon region are already a serious problem. I think the US should use foreign assistance to help these countries adapt to climate change, particularly through organizations like the US Agency for International Development (USAID) and US contributions to the Green Climate Fund. The US can help to improve systems for projecting extreme weather events and help develop plans to prepare for natural disasters and changing weather patterns with resilient infrastructure. I also think climate resilience and the energy transition really go hand in hand. Both require countries to build more sustainable infrastructure and invest in new technologies.
In addition, helping countries to adapt to climate change would help stem the flow of migration from some countries where climate change is already affecting people’s livelihoods and causing them to leave their country for the US.
Finally, it’s important to mention conservation. About half of Latin America’s greenhouse gas emissions come from land-use change tied to practices like agriculture and deforestation. This is very different from the rest of the world, in which energy is the source of about two-thirds of emissions. Deforestation and land-use change are huge issues for Latin America, and if deforestation in the Amazon continues, for example, and we reach the tipping point at which the forest starts to convert to savanna, this could affect rainfall patterns as far as the US. This means that ultimately the US will benefit from offering assistance to countries to fight deforestation.
In conclusion, cooperating on all these issues brings benefits for Latin America and the Caribbean, but it also very clearly serves the strategic interests of the US. I think that’s a really important message that we need to keep in mind when we’re talking about US bilateral cooperation with Argentina as well as with other countries.”
What are some specific areas in which you see potential for technical cooperation between the US and Argentina?
“I think there are many different areas in which the US and Argentina could cooperate. We’re going to have to see where exactly the priorities are for the new administration. President Biden just issued an executive order a few days ago which outlines a broad climate plan, including for foreign policy. The order basically takes some of his campaign promises and directs different agencies of the government to develop and implement plans to fulfill them. So it’s going to be the responsibility of organizations like USAID to come up with those plans, and what they can do also depends on funding from Congress.
To give some examples, biodiversity is a very important area for USAID and there is already program funding there for that topic. Programs for conservation are also already in place and there’s also a lot of potential there. I think there’s also going to be an increasing focus on clean energy. In my view, there could be opportunities in renewable energy, but I also think it would be very important to look for opportunities in clean transport, which is a crucial component of climate change mitigation.”
Full recording of the event available here:
- Let’s Work With Latin America to Fight Climate Change (Op-ed)
- Political Transition: United States-Argentina Relations, Energy and Climate, and a Discussion of the Incoming Biden Administration (Presentation)
- La inauguración de Biden y lo que significa para el cambio climático (Interview)
- Joe Biden’s Presidency: Implications for Latin America & the Caribbean (Analysis collection)