Glasgow Summit Ends Amidst Climate of Disappointment

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Climate Change

One of the family photos taken after the laborious end of the 26th climate summit in Glasgow, which closed a day later than scheduled with a Climate Pact described as falling short by even the most optimistic, lacking important decisions to combat the crisis and without directly confronting fossil fuels, the cause of the emergency. CREDIT: UNFCCC

One of the family photos taken after the laborious end of the 26th climate summit in Glasgow, which closed a day later than scheduled with a Climate Pact described as falling short by even the most optimistic, lacking important decisions to combat the crisis and without directly confronting fossil fuels, the cause of the emergency. CREDIT: UNFCCC

GLASGOW, Nov 14 2021 (IPS) – Developing countries will surely remember the Glasgow climate summit, the most important since 2015, as a fiasco that left them as an afterthought.


That was the prevailing sentiment among delegates from the developing South during the closing ceremony on the night of Saturday Nov. 13, one day after the scheduled end of the conference.

Bolivia’s chief negotiator, Diego Pacheco, questioned the outcome of the summit. “It is not fair to pass the responsibility to developing countries. Developed countries do not want to acknowledge their responsibility for the crisis. They have systematically broken their funding pledges and emission reduction commitments,” he told IPS minutes after the end of the 26th Conference of the Parties (COP26) on climate change in Glasgow.

The 196 Parties to the United Nations Framework Convention on Climate Change (UNFCCC) ignored the public clamor, which took shape in the demands of indigenous peoples, young people, women, scientists and social movements around the world for substantive measures to combat the climate crisis, even though the goal of containing global warming to 1.5 degrees Celsius is barely surviving on life support.

The Glasgow Climate Pact that came out of the summit finally mentions the need to move away from the use of coal. But it had to water down the stronger recommendation to “phase out” in order to overcome the last stumbling block.

In addition, COP26 broke a taboo, albeit very tepidly, after arduous marches and counter-marches in the negotiating room and in the three drafts of the Glasgow Pact: there was a mention of fossil fuels as part of the climate emergency. And it also stated the need to reduce “inefficient” subsidies for fossil fuels.

But the summit, where decisions are made by consensus, avoided a strong stance in this regard. It also avoided moving from recommendations to obligations for the next edition, to be held in Egypt, and those that follow, while the climate crisis continues causing severe droughts, devastating storms, melting of the polar ice caps and warming of the oceans.

In a plenary session that was delayed by several minutes, the final declaration underwent a last-minute change when India, one of the villains of the meeting – along with Saudi Arabia, Australia and Russia – asked for the phrase “phasing out” of coal to be replaced by “phasing down”, a change questioned by countries such as Mexico, Liechtenstein and Switzerland.

A paradoxical fact at the close of COP26, where civil society organizations complained that they were left out, was the decision of several countries to endorse the final text even though they differed on several points, including the fossil energy face-lifts.

“Today, we can say with credibility that we have kept 1.5 degrees within reach. But its pulse is weak. And it will only survive if we keep our promises. If we translate commitments into rapid action,” said conference chairman Alok Sharma, choking back tears after a pact – albeit a minimal one – was reached by negotiating three drafts and holding arduous discussions on the fossil fuel question, right up to the final plenary.

COP26 chair Alok Sharma blinked back tears during his closing speech at the climate summit, expressing the tension of negotiating the Glasgow Climate Pact, due to the hurdles thrown in the way of a consensus by the big coal and oil producers. CREDIT: UNFCCC-Twitter

COP26 chair Alok Sharma blinked back tears during his closing speech at the climate summit, expressing the tension of negotiating the Glasgow Climate Pact, due to the hurdles thrown in the way of a consensus by the big coal and oil producers. CREDIT: UNFCCC-Twitter

The South is still waiting

Lost amidst the impacts of the climate emergency and forgotten by the industrialized countries, the global South failed to obtain something vital for many of its nations: a clear plan and funding for loss and damage, an issue that was deferred to COP27 in Egypt.

Mohamed Adow, director of the non-governmental Power Shift Africa, said the pact is “not good enough…There is no mention of solidarity and justice. We need a clear process to face loss and damage. There should be a link between emission reduction, financing and adaptation.”

The final decision by China, the United States, India and the European Union to turn their backs on a global fossil fuel exit and deny climate support to the most vulnerable nations left the developing world high and dry.

“There are things that cannot wait to COP27 or 2025. To face loss and damage, the most vulnerable countries need financing to battle the impacts on their territories,” Manuel Pulgar-Vidal, global climate and energy leader for the non-governmental World Wildlife Fund, told IPS.

Climate policies were, at least on the agenda, the focus of COP26.

The summit focused on carbon market rules, climate finance of at least 100 billion dollars per year, gaps between emission reduction targets and needed reductions, strategies for carbon neutrality by 2050, adaptation plans, and the working platform for local communities and indigenous peoples.

But the goal of hundreds of billions of dollars per year has been postponed, a reflection of the fact that financing for climate mitigation and adaptation is a touchy issue, especially for developed countries.

The corridors of the Blue Zone of the Scottish Events Campus, where the official part of the 26th Climate Conference was held in the city of Glasgow, were emptying on Saturday Nov. 13, at the end of the summit, which lasted a day longer than scheduled and ended with a negative balance according to civil society organizations. CREDIT: Emilio Godoy/IPS

The corridors of the Blue Zone of the Scottish Events Campus, where the official part of the 26th Climate Conference was held in the city of Glasgow, were emptying on Saturday Nov. 13, at the end of the summit, which lasted a day longer than scheduled and ended with a negative balance according to civil society organizations. CREDIT: Emilio Godoy/IPS

Offers and promises – on paper

One breakthrough at COP26 was the approval of the rules of the Paris Agreement, signed in the French capital in December 2015, at COP21, to form the basis on which subsequent summits have revolved. By 2024, all countries will have to report detailed data on emissions, which will form a baseline to assess future greenhouse gas reductions.

The agreement on the functioning of carbon markets creates a trading system between countries, but does not remove the possibility of countries and companies skirting the rules.

Industrialized countries committed to doubling adaptation finance by 2025 based on 2019 amounts. In addition, COP26 approved a new work program to increase greenhouse gas cuts, with reports due in 2022.

It also asked the UNFCCC to evaluate climate plans that year and its final declaration calls on countries to switch from coal and hydrocarbons to renewable energy.

Apart from the Climate Pact, the summit produced voluntary commitments against deforestation, emissions of methane, a gas more polluting than carbon dioxide, and the phasing out of gasoline and diesel vehicles.

In addition, at least 10 countries agreed to put an end to the issuing of new hydrocarbon exploration and exploitation licenses in their territories.

Furthermore, some thirty nations agreed to suspend public funding for coal, gas and oil by 2022.

 Demonstrations demanding ambitious, substantive and equitable measures to address the climate crisis continued throughout the 14-day climate summit in Glasgow, which ended on the night of Saturday Nov. 13 with disappointing results for the global South. CREDIT: Emilio Godoy/IPS

Demonstrations demanding ambitious, substantive and equitable measures to address the climate crisis continued throughout the 14-day climate summit in Glasgow, which ended on the night of Saturday Nov. 13 with disappointing results for the global South. CREDIT: Emilio Godoy/IPS

Finally, more than 100 stakeholders, including countries and companies, signed up to the elimination of cars with internal combustion engines by 2030, without the major automobile manufacturers such as Germany, Spain and France joining in, and a hundred nations signed a pact to promote sustainable agriculture.

All of the 2030 pledges, which still need concrete plans for implementation, imply a temperature rise of 2.8 degrees C by the end of this century, according to the independent Climate Action Tracker.

The climate plans of the 48 least developed countries (LDCs) would cost more than 93 billion dollars annually, the non-governmental International Institute for Environment and Development said in Glasgow.

In addition, annual adaptation costs in developing countries would be about 70 billion dollars, reaching a total of 140 to 300 billion dollars by 2030, according to the United Nations Environment Program (UNEP).

But the largest disbursements are related to loss and damage, which would range between 290 billion and 580 billion dollars by 2030, and hence the enormous concern of these nations to obtain essential financing, according to a 2019 study. And their disappointment with the results of the Oct. 31-Nov.13 conference.

During his presentation at the closing plenary, Seve Paeniu, a climate envoy from Tuvalu, an island nation whose very existence is threatened by the rising sea level, showed a photo of his three grandchildren and said he had been thinking about what to say to them when he got home.

“Glasgow has made a promise to guarantee their future. It will be the best Christmas gift that I can bring home,” he said. But judging by the Climate Pact, Paeniu may have to look for another present.

IPS produced this article with the support of Iniciativa Climática of Mexico and the European Climate Foundation.

 

Indigenous Peoples Want to Move Towards Clean Energy Sovereignty

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Climate Change

At an event in the so-called Green Zone, Canadian native leaders and the non-governmental Indigenous Clean Energy launched a global hub of social enterprises to pass on knowledge and advice during the Glasgow climate summit. In the picture, Mihskakwan James Harper (R) of the Cree indigenous community explains a mixed battery energy storage project built by a private firm and an indigenous company in the province of Ontario, Canada. CREDIT: Emilio Godoy/IPS

At an event in the so-called Green Zone, Canadian native leaders and the non-governmental Indigenous Clean Energy launched a global hub of social enterprises to pass on knowledge and advice during the Glasgow climate summit. In the picture, Mihskakwan James Harper (R) of the Cree indigenous community explains a mixed battery energy storage project built by a private firm and an indigenous company in the province of Ontario, Canada. CREDIT: Emilio Godoy/IPS

GLASGOW, Nov 9 2021 (IPS) – In the community of Bella Bella on Turtle Island in the western Canadian province of British Columbia, the indigenous Heiltsuk people capture heat from the air through devices in 40 percent of their homes, in a plan aimed at sustainable energy sovereignty.


“We use less energy, pay less, and that’s good for our health,” Leona Humchitt, a member of the Heiltsuk community, told IPS during a forum on indigenous micro-grids in the so-called Green Zone of the climate summit being hosted by Glasgow, Scotland since Oct. 31. “The project coincides with our view. We need to have a good relationship with nature.”

For native groups, these initiatives mean moving towards energy sovereignty to avoid dependence on projects that have no connection to local populations, combating energy poverty, paving the transition to cleaner sources and combating the exclusion they suffer in the renewable energies sector due to government policies and corporate decisions.

The modernisation process that began in the first quarter of 2021 lowered electricity rates from 2,880 dollars a year to about 1,200 dollars for each participating household.

In addition, the switch to heat pumps eliminates five tons of pollutant emissions per year and has reduced the community’s annual diesel consumption of 2,000 litres per household, which is usually supplied by a private hydroelectric plant.

Funded by the Canadian government and non-governmental organisations, the “Strategic Fuel Switching” project is part of the Heiltsuk Climate Action plan, which also includes measures such as biofuel and biomass from marine algae and carbon credits from marine ecosystems.

In 2017, more than 250 remote indigenous communities, out of 292 in Canada, relied on their own electricity microgeneration grids, dependent especially on diesel generators.

The venture in the Heiltsuk community, which is part of the three major Canadian native peoples, is included in a portfolio of indigenous transitional energy initiatives that have been incorporated into the non-governmental Indigenous Clean Energy (ICE) social enterprise in Canada.

A global hub for social entrepreneurship was one of the initiatives launched in the Green Zone, an open event held parallel to the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), whose annual session ends Nov. 12.

ICE has a list of 197 projects – 72 in bioenergy, 127 in energy efficiency, and 19 in other alternative sources – with more than one megawatt of installed capacity. These initiatives together represent 1.49 billion dollars in revenue over 10 years.

Mihskakwan James Harper, an indigenous man from the Cree people of Sturgeon Lake in the western Canadian province of Alberta, said it is not only about energy sovereignty, but also about community power to dispose of their own resources.

“We change our self-consumption and the communities benefit themselves from the energy, and the earth get benefits as well. Without us, we are not going to reach the climate goals. We show that indigenous peoples can bring innovations and solutions to the climate crisis,” Harper, who is development manager at the NR Stor energy company, told IPS.

NR Stor Inc. and the Six Nations of the Grand River Development Corporation in the Canadian province of Ontario are building the Oneida battery storage project – with a capacity of 250 MW and an investment of 400 million dollars – in the south of the province.

The facility, which will prevent some 4.1 million tons of pollutant emissions, the largest of its kind in Canada and one of the largest in the world, will provide clean and stable energy capacity by storing renewable energy off-peak for release when demand rises.

ICE estimates 4.3 billion dollars in investments are needed to underpin this energy efficiency that would create some 73,000 direct and indirect jobs and would cut carbon dioxide emissions by more than five million tons over 10 years.

Electric vehicles are still a pipe dream in many indigenous communities, due to their price and the lack of charging infrastructure. In the picture, an electric car is charged at a station in downtown Glasgow, near COP26. CREDIT: Emilio Godoy/IPS

Electric vehicles are still a pipe dream in many indigenous communities, due to their price and the lack of charging infrastructure. In the picture, an electric car is charged at a station in downtown Glasgow, near COP26. CREDIT: Emilio Godoy/IPS

Slow progress

The increase in clean sources plays a decisive role in achieving one of the 17 Sustainable Development Goals (SDGs) set out in 2015 by the international community in the 2030 Agenda, within the framework of the United Nations.

SDG 7 is aimed at affordable, modern energy for all.

But processes similar to Canada’s ICE are proceeding at a slow pace.

Two projects of the Right Energy Partnership with Indigenous Peoples (REP), launched in 2018 by the non-governmental Indigenous Peoples Major Group for Sustainable Development, are being implemented in El Salvador and Honduras.

In El Salvador, the project is “Access to photovoltaic energy for indigenous peoples”, carried out since 2020 in conjunction with the non-governmental National Salvadoran Indigenous Coordination Council (CCNIS).

It is financed with 150,000 dollars from the Global Environment Facility (GEF) Small Grants Programme to provide 24 solar power systems to three communities in the town of Guatajiagua, in the eastern department of Morazán.

In Honduras, the Lenca Indigenous Community Council and the Pro Construction Committee are installing a mini-hydroelectric plant to benefit two Lenca indigenous communities in the municipality of San Francisco de Opalaca, in the southwestern department of Intibucá.

The project “Hydroelectric power generation for environmental protection and socioeconomic development in the Lenca communities of Plan de Barrios and El Zapotillo”, launched in 2019, received 150,000 dollars in GEF funding.

Clean alternative sources face community distrust due to human rights violations committed by wind, solar and hydroelectric plant owners in countries such as Colombia, Honduras and Mexico, including land dispossession, contracts harmful to local communities and lack of free consultation and adequate information prior to project design.

Amazonian indigenous people participate in protests by social movements in Glasgow, in which they claimed that their voices were not adequately heard at COP26. CREDIT: Arturo Contreras/Pie de Página

Amazonian indigenous people participate in protests by social movements in Glasgow, in which they claimed that their voices were not adequately heard at COP26. CREDIT: Arturo Contreras/Pie de Página

The evolution of energy initiatives has been slow, due to funding barriers and the limitations imposed by the covid-19 pandemic.

“Our main interest is to enable access to affordable renewable energy and for indigenous peoples to participate in the projects,” Eileen Mairena-Cunningham, REP project coordinator, told IPS.

“These processes should be led by indigenous organisations. Of course we are interested in participating in the global networks,” added the Miskita indigenous woman from Nicaragua.

After the always difficult first step, indigenous communities want to accelerate progress towards these goals.

In Bella Bella, Canada, the hope is to progressively replace diesel with biofuel in vehicles and in the boats that are vital to the fishing community.

“We are not going to electrify transportation overnight,” Humchitt said. “But we see an opportunity in biodiesel. We have to go forward on this issue.”

Harper concurred with that vision. “Of course we want EVs, as they become accessible and satisfy our own needs. We want to get rid of diesel. The communities have to lead the process of the local transition,” he said.

Mairena-Cunningham stressed that indigenous peoples attach primary importance to participating in global networks.

“Existing projects leave us with lessons of what can be done in our territory,” said the activist. “There is a need for policies that facilitate indigenous participation and special safeguards for access to the land. Capacity building is also needed.”

Renewable energies can be added to ecological measures that indigenous peoples already use, such as forest protection and biodiversity and water conservation. But their local implementation requires more than just willingness.

IPS produced this article with the support of Iniciativa Climática of Mexico and the European Climate Foundation.

 

Latin America Heads to Glasgow Climate Summit with Half-Empty Hands

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Climate Change

This article is part of IPS coverage ahead of the COP26 climate change conference, to be held Oct. 31-Nov. 12 in Glasgow.

A solar power plant in El Salvador, with 320,000 panels, is one of the largest such installations in Central America, whose countries are striving to convert the energy mix to renewable sources, but whose plans were slowed by the covid pandemic. CREDIT: Edgardo Ayala/IPS

A solar power plant in El Salvador, with 320,000 panels, is one of the largest such installations in Central America, whose countries are striving to convert the energy mix to renewable sources, but whose plans were slowed by the covid pandemic. CREDIT: Edgardo Ayala/IPS

MEXICO CITY, Oct 25 2021 (IPS) – Latin America and the Caribbean are heading to a new climate summit with a menu of insufficient measures to address the effects of the crisis, in the midst of the impact of the covid-19 pandemic.


The world’s most unequal region, which is the hardest hit by the effects of climate change and highly vulnerable to the impacts of the climate crisis, has yet to engage in the fight against this emergency head-on, according to analysts and studies.

Tania Miranda, director of Policy and Stakeholder Engagement in the Environment and Climate Change Programme of the U.S.-based non-governmental Institute of the Americas, said Latin America’s high climate ambitions have not been supported by the measures necessary to reduce emissions.

“Goals are aspirational. If they are not backed up with policies and financing, they remain empty promises. There is a need for financing and the implementation of strategies and public policies that will lead them to fulfill their commitments. Billions of dollars are needed,” the researcher told IPS from San Diego, California, where the Institute is based.

Miranda is the author of the report “Nationally Determined Contributions Across the Americas. A Comparative Hemispheric Analysis,” which evaluates the climate targets of 16 countries, including the United States and Canada.

In her study, she analyses pollutant emission reduction targets, plans for adaptation to the climate crisis, dependence on external financing, long-term carbon neutrality commitments and the state of pollution abatement.

Climate policies will be the focus of the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), which will take place Oct. 31 to Nov. 12 in Glasgow, Scotland in the north of the United Kingdom, after being postponed in that same month in 2020 due to the pandemic.

COP26 will address rules for carbon markets, at least 100 billion dollars annually in climate finance, the gaps between nationally determined contributions (NDCs) and the necessary reductions, strategies for carbon neutrality by 2050, adaptation plans, and the local communities and indigenous peoples platform.

A parallel alternative summit will also be held, bringing together social movements from around the world, advocating an early phase-out of fossil fuels, rejecting so-called “false solutions” such as carbon markets, and calling for a just energy transition and reparations for damage and redistribution of funds to indigenous communities and countries of the global South.

The Glasgow conference is considered the most important climate summit, due to the need to accelerate action in the face of alarming data on global warming since the adoption of the Paris Agreement at COP21, held in December 2015 in the French capital.

A zero-emission electric bus is parked on a downtown street in Montevideo. Public transport is beginning to electrify in Latin America's cities as a way to contain CO2 emissions, but plans have been delayed and cut back due to the covid pandemic. CREDIT: Inés Acosta/IPS

A zero-emission electric bus is parked on a downtown street in Montevideo. Public transport is beginning to electrify in Latin America’s cities as a way to contain CO2 emissions, but plans have been delayed and cut back due to the covid pandemic. CREDIT: Inés Acosta/IPS

Since then, 192 signatories to the binding treaty have submitted their first NDCs.

But just 13 countries worldwide sent their new climate contributions in 2020 to the UNFCCC Secretariat based in Bonn, despite calls from its secretary, Patricia Espinosa of Mexico, for all parties to the treaty to do so that year.

Of these, only four from this region – Argentina, Grenada, Mexico and Suriname – submitted the second updated version of their contributions.

Although they are voluntary commitments, the NDCs are a core part of the Paris Agreement, based on the goal of curbing the temperature rise to 1.5 degrees Celsius, considered the minimum and indispensable target to avoid irreversible climate disasters and, consequently, human catastrophes.

In the NDCs, nations must set their goals for 2030 and 2050 to reduce greenhouse gas (GHG) emissions responsible for global warming, taking a specific year as a baseline, outline the way they will achieve these goals, establish the peak year of their emissions and when they would achieve net zero emissions, i.e. absorb as many gases as they release into the atmosphere.

In addition, to contain the spread of the coronavirus and its impacts, the region has taken emergency economic decisions, such as providing support for companies of all sizes, as well as for vulnerable workers.

But these post-pandemic recovery packages lack green components, such as commitments to sustainable and cleaner production.

 A street in Mexico City shows reduced traffic due to covid restrictions. Automotive transport is one of the largest generators of polluting emissions in Latin America and the Caribbean. But the transition to a cleaner vehicle fleet, with the increase in the number of electric vehicles and other alternatives, is moving very slowly. CREDIT: Emilio Godoy/IPS

A street in Mexico City shows reduced traffic due to covid restrictions. Automotive transport is one of the largest generators of polluting emissions in Latin America and the Caribbean. But the transition to a cleaner vehicle fleet, with the increase in the number of electric vehicles and other alternatives, is moving very slowly. CREDIT: Emilio Godoy/IPS

Shared irresponsibilities

While some countries, such as Argentina and Chile, improved their pledges, others like Brazil and Mexico scaled down or kept their pledges unchanged.

The measures of Argentina, Brazil, Mexico and Colombia are in code red, as they are highly insufficient to contain global warming, according to the Climate Action Tracker.

In the case of the first three, the largest Latin American economies, the governments are prioritising the financing of increased fossil fuel exploitation, which would result in a rise in emissions in 2030, the Tracker highlights.

Chile’s and Peru’s measures are classified as insufficient and Costa Rica’s as almost sufficient.

That Central American nation, Colombia and Peru are on track to meet their commitments by 2030 and 2050, the Tracker notes.

In the case of Argentina, Chile and Ecuador, they would need additional measures to achieve their goals. At the other extreme are Brazil and Mexico, the biggest regional polluters, which have strayed from the medium- and long-term path.

Enrique Maurtúa, senior climate policy advisor for the non-governmental Environment and Natural Resources Foundation (FARN), said that Argentina is an example of the countries in the region that are caught between these contradictions.

“Argentina follows the line of what is happening in several countries in the region. In terms of commitments, it does its homework, what it is supposed to do, it is preparing a long-term strategy. But those commitments are not in line with what Argentina is doing behind closed doors,” the expert told IPS from Buenos Aires, where the Foundation is based.

As part of this approach, the Argentine Congress is debating a draft Hydrocarbon Investment Promotion Regime to provide fiscal stability to the sector for the next 20 years.

In addition, the government weakened the carbon tax, which averages a 10 dollar charge, through exemptions and the exclusion of gas, and is preparing a sustainable mobility strategy that dispenses with hydrogen.

Mexico is following a similar path, as the government favours support for the state-owned oil company Pemex and the government’s electric utility Comisión Federal de Electricidad, is building a refinery in the state of Tabasco, on the southeastern coast of the country, and has stalled actions aimed at an energy transition.

On Dec. 29, 2020, Mexico released its updated NDC, without increasing the emissions reduction target, to the disappointment of environmental organisations, and in contravention of the Paris Agreement and its own climate change law.

But on Oct. 1 it was reported that a federal court annulled the update, considering that there was an illegal reduction in the mitigation goals, so the 2016 measures remain in force until the government improves on them.

Isabel Bustamante, a member of the Fridays for Future Mexico movement who will attend COP26, questioned Mexico’s climate stance.

“It does not take a solid stance. We need declarations of climate emergency throughout the country and to make resources more readily available. We are concerned about the focus on more fossil fuel production,” she told IPS from the southeastern city of Mérida.

President Andrés Manuel López Obrador is facing pressure from the environmental sector, but does not seem adept at changing course. He is even sending mixed signals, such as his announcement on Oct. 18 that the country will raise climate targets in 2022.

 At most service stations in Brazil, consumers can choose between gasoline and ethanol, the price of which is attractive when it does not exceed 70 percent of that of gasoline. But users only opt for biofuel when it is economically attractive, so it does not contribute to alleviating the emission of polluting gases. CREDIT: Mario Osava/IPS

At most service stations in Brazil, consumers can choose between gasoline and ethanol, the price of which is attractive when it does not exceed 70 percent of that of gasoline. But users only opt for biofuel when it is economically attractive, so it does not contribute to alleviating the emission of polluting gases. CREDIT: Mario Osava/IPS

The COP and the question marks it raises for the region

The UNFCCC stated in September that the NDCs presented are insufficient to curb warming to 1.5 degrees C.

Miranda believes COP26 could be beneficial for the region.

“Expectations are very high. We need the big polluters to be present. There will be pressure for tangible results. The region knows where its needs are, it has many opportunities to use ecosystems to reduce emissions,” she said.

Maurtúa, for his part, stresses that the main results will depend on the concrete financing and means of implementation of the Paris Agreement.

“Developed countries have to make financial contributions to the transition in developing countries. Industrialised nations are asking for more ambition, but they have to provide financing,” he argued.

In the expert’s opinion, “it is what the region needs. There are signs of willingness in Costa Rica, Colombia and Chile. But that is not happening in the case of Argentina or Mexico.”

For young people like Bustamante, the summit needs to offer more real action and fewer empty offers. “We expect an urgent climate action agenda to emerge. We need to stop investments in fossil fuel infrastructure, which compromises our near future. We will not stop until we do,” she said.

Under pressure due to the urgency of pending matters and within the constraints imposed by the pandemic, Glasgow could be a defining benchmark of a real global commitment to address the climate emergency, which is causing more and more destruction.

 

Recipes with a Taste of Sustainable Development on the Coast of El Salvador

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Environment

María Luz Rodríguez stands next to her solar oven where she cooked lasagna in the village of El Salamar in San Luis La Herradura municipality. In this region in southern El Salvador, an effort is being made to implement environmental actions to ensure the sustainable use of natural resources. CREDIT: Edgardo Ayala/ IPS

María Luz Rodríguez stands next to her solar oven where she cooked lasagna in the village of El Salamar in San Luis La Herradura municipality. In this region in southern El Salvador, an effort is being made to implement environmental actions to ensure the sustainable use of natural resources. CREDIT: Edgardo Ayala/ IPS

SAN LUIS LA HERRADURA, El Salvador, Mar 31 2021 (IPS) – Salvadoran villager Maria Luz Rodriguez placed the cheese on top of the lasagna she was cooking outdoors, put the pan in her solar oven and glanced at the midday sun to be sure there was enough energy for cooking.


“Hopefully it won’t get too cloudy later,” Maria Luz, 78, told IPS. She then checked the thermometer inside the oven to see if it had reached 150 degrees Celsius, the ideal temperature to start baking.

She lives in El Salamar, a coastal village of 95 families located in San Luis La Herradura, a municipality in the central department of La Paz which is home to some 30,000 people on the edge of an impressive ecosystem: the mangroves and bodies of water that make up the Estero de Jaltepeque, a natural reserve whose watershed covers 934 square kilometres.

After several minutes the cheese began to melt, a clear sign that things were going well inside the solar oven, which is simply a box with a lid that functions as a mirror, directing sunlight into the interior, which is covered with metal sheets.

“I like to cook lasagna on special occasions,” Maria Luz said with a smile.

After Tropical Storm Stan hit Central America in 2005, a small emergency fund reached El Salamar two years later, which eventually became the start of a much more ambitious sustainable development project that ended up including more than 600 families.

Solar ovens and energy-efficient cookstoves emerged as an important component of the programme.

Aerial view of Estero de Jaltepeque, in San Luis La Herradura, a municipality on the Pacific coast in southern El Salvador where a sustainable development programme is being carried out in local communities, including the use of solar stoves and sustainable fishing and agriculture techniques. CREDIT: Edgardo Ayala /IPS

Aerial view of Estero de Jaltepeque, in San Luis La Herradura, a municipality on the Pacific coast in southern El Salvador where a sustainable development programme is being carried out in local communities, including the use of solar stoves and sustainable fishing and agriculture techniques. CREDIT: Edgardo Ayala /IPS

The project was financed by the Global Environment Facility‘s (GEF) Small Grants Programme, and El Salamar was later joined by other villages, bringing the total number to 18. The overall investment was more than 400,000 dollars.

In addition to solar ovens and high-energy rocket stoves, work was done on mangrove reforestation and sustainable management of fishing and agriculture, among other measures. Agriculture and fishing are the main activities in these villages, in addition to seasonal work during the sugarcane harvest.

While María Luz made the lasagna, her daughter, María del Carmen Rodríguez, 49, was cooking two other dishes: bean soup with vegetables and beef, and rice – not in a solar oven but on one of the rocket stoves.

This stove is a circular structure 25 centimetres high and about 30 centimetres in diameter, whose base has an opening in which a small metal grill is inserted to hold twigs no more than 15 centimetres long, which come from the gliridicia (Gliricidia sepium) tree. This promotes the use of living fences that provide firewood, to avoid damaging the mangroves.

The stove maintains a good flame with very little wood, due to its high energy efficiency, unlike traditional cookstoves, which require several logs to prepare each meal and produce smoke that is harmful to health.

María del Carmen Rodríguez cooks rice on a rocket stove using a few twigs from a tree species that emits less CO2 than mangroves, whose sustainability is also preserved thanks to the use of the tree. Many families in the community of El Salamar have benefited from this energy-efficient technology, as well as other initiatives promoted along the Pacific coast in southern El Salvador. CREDIT: Edgardo Ayala /IPS

María del Carmen Rodríguez cooks rice on a rocket stove using a few twigs from a tree species that emits less CO2 than mangroves, whose sustainability is also preserved thanks to the use of the tree. Many families in the community of El Salamar have benefited from this energy-efficient technology, as well as other initiatives promoted along the Pacific coast in southern El Salvador. CREDIT: Edgardo Ayala /IPS

The rocket stove can cook anything, but it is designed to work with another complementary mechanism for maximum energy efficiency.

Once the stews or soups have reached boiling point, they are placed inside the “magic” stove: a circular box about 36 centimetres in diameter made of polystyrene or durapax, as it is known locally, a material that retains heat.

The food is left there, covered, to finish cooking with the steam from the hot pot, like a kind of steamer.

“The nice thing about this is that you can do other things while the soup is cooking by itself in the magic stove,” explained María del Carmen, a homemaker who has five children.

The technology for both stoves was brought to these coastal villages by a team of Chileans financed by the Chile Fund against Hunger and Poverty, established in 2006 by the government of that South American country and the United Nations Development Programme (UNDP) to promote South-South cooperation.

The Chileans taught a group of young people from several of these communities how to make the components of the rocket stoves, which are made from clay, cement and a commercial sealant or glue.

The blue crab is one of the species raised in nurseries by people in the Estero de Jaltepeque region in southern El Salvador, as part of an environmental sustainability project in the area financed by the Global Environment Facility’s Small Grants Programme. CREDIT: Edgardo Ayala/IPS

The blue crab is one of the species raised in nurseries by people in the Estero de Jaltepeque region in southern El Salvador, as part of an environmental sustainability project in the area financed by the Global Environment Facility’s Small Grants Programme. CREDIT: Edgardo Ayala/IPS

The use of these stoves “has reduced carbon dioxide (CO2) emissions by at least 50 percent compared to traditional stoves,” Juan René Guzmán, coordinator of the GEF’s Small Grants Programme in El Salvador, told IPS.

Some 150 families use rocket stoves and magic stoves in 10 of the villages that were part of the project, which ended in 2017.

“People were given their cooking kits, and in return they had to help plant mangroves, or collect plastic, not burn garbage, etc. But not everyone was willing to work for the environment,” Claudia Trinidad, 26, a native of El Salamar and a senior studying business administration – online due to the COVID pandemic – at the Lutheran University of El Salvador, told IPS.

Those who worked on the mangrove reforestation generated hours of labour, which were counted as more than 800,000 dollars in matching funds provided by the communities.

In the project area, 500 hectares of mangroves have been preserved or restored, and sustainable practices have been implemented on 300 hectares of marine and land ecosystems.

Petrona Cañénguez shows how she cooks bean soup on an energy-efficient rocket stove in an outside room of her home in the hamlet of San Sebastián El Chingo, one of the beneficiaries of a sustainable development programme in the municipality of San Luis La Herradura, on El Salvador's southern coast. CREDIT: Edgardo Ayala /IPS

Petrona Cañénguez shows how she cooks bean soup on an energy-efficient rocket stove in an outside room of her home in the hamlet of San Sebastián El Chingo, one of the beneficiaries of a sustainable development programme in the municipality of San Luis La Herradura, on El Salvador’s southern coast. CREDIT: Edgardo Ayala /IPS

Petrona Cañénguez, from the town of San Sebastián El Chingo, was among the people who participated in the work. She was also cooking bean soup for lunch on her rocket stove when IPS visited her home during a tour of the area.

“I like the stove because you feel less heat when you are preparing food, plus it’s very economical, just a few twigs and that’s it,” said Petrona, 59.

The bean soup, a staple dish in El Salvador, would be ready in an hour, she said. She used just under one kilo of beans, and the soup would feed her and her four children for about five days.

However, she used only the rocket stove, without the magic stove, more out of habit than anything else. “We always have gliridicia twigs on hand,” she said, which make it easy to use the stove.

Although the solar oven offers the cleanest solution, few people still have theirs, IPS found.

This is due to the fact that the wood they were built with was not of the best quality and the coastal weather conditions and moths soon took their toll.

Maria Luz is one of the few people who still uses hers, not only to cook lasagna, but for a wide variety of recipes, such as orange bread.

However, the project is not only about stoves and ovens.

 Some families living in coastal villages in the municipality of San Luis La Herradura have dug ponds for sustainable fishing, which was of great help to the local population during the COVID-19 lockdown in this coastal area of southern El Salvador. CREDIT: Edgardo Ayala /IPS

Some families living in coastal villages in the municipality of San Luis La Herradura have dug ponds for sustainable fishing, which was of great help to the local population during the COVID-19 lockdown in this coastal area of southern El Salvador. CREDIT: Edgardo Ayala /IPS

The beneficiary families also received cayucos (flat-bottomed boats smaller than canoes) and fishing nets, plus support for setting up nurseries for blue crabs and mollusks native to the area, as part of the fishing component with a focus on sustainability in this region on the shores of the Pacific Ocean.

Several families have dug ponds that fill up with water from the estuary at high tide, where they raise fish that provide them with food in times of scarcity, such as during the lockdown declared in the country in March 2020 to curb the spread of coronavirus.

The project also promoted the planting of corn and beans with native seeds, as well as other crops – tomatoes, cucumbers, cushaw squash and radishes – using organic fertiliser and herbicides.

The president of the Local Development Committee of San Luis La Herradura, Daniel Mercado, told IPS that during the COVID-19 health emergency people in the area resorted to bartering to stock up on the food they needed.

“If one community had tomatoes and another had fish, we traded, we learned to survive, to coexist,” Daniel said. “It was like the communism of the early Christians.”

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Energy Cooperatives Swim Against the Tide in Mexico

Civil Society, Development & Aid, Economy & Trade, Editors’ Choice, Energy, Environment, Featured, Green Economy, Headlines, Integration and Development Brazilian-style, Latin America & the Caribbean, Projects, Regional Categories, TerraViva United Nations

Energy

Onergia, one of the two energy cooperatives operating in Mexico today, installs photovoltaic systems, such as this one at the Tosepan Titataniske Union of Cooperatives in the municipality of Cuetzalan, in the southern state of Puebla. CREDIT: Courtesy of Onergia

Onergia, one of the two energy cooperatives operating in Mexico today, installs photovoltaic systems, such as this one at the Tosepan Titataniske Union of Cooperatives in the municipality of Cuetzalan, in the southern state of Puebla. CREDIT: Courtesy of Onergia

MEXICO CITY, Aug 31 2020 (IPS) – A Mexican solar energy cooperative, Onergia, seeks to promote decent employment, apply technological knowledge and promote alternatives that are less polluting than fossil fuels, in one of the alternative initiatives with which Mexico is seeking to move towards an energy transition.


“We organised ourselves in a cooperative for an energy transition that will rethink the forms of production, distribution and consumption to build a healthier and fairer world,” Onergia founding partner and project director Antonio Castillo told IPS. “In this sector, it has been more difficult; we have to invest in training and go against the logic of the market.”

The eight-member cooperative, created in 2017, has so far installed some 50 photovoltaic systems, mainly in the south-central state of Puebla.

“A public policy is needed that would allow us to move towards the transition. Getting people to adopt alternatives depends on public policy. It is fundamental for people to have the freedom to choose how to consume. It is our job to organise as consumers.” —
Antonio Castillo

Castillo explained by phone that the cooperative works with middle- and upper-class households that can finance the cost of the installation as well as with local communities keen on reducing their energy bill, offering more services and expanding access to energy.

In the case of local communities, the provision of solar energy is part of broader social projects in which the beneficiary organisations’ savings and loan cooperatives design the financial structure to carry out the work. A basic household system can cost more than 2,200 dollars and a larger one, over 22,000.

“The communities are motivated to adopt renewable energy as a strategy to defend the land against threats from mining or hydroelectric companies,” said Castillo. “They don’t need to be large-scale energy generators, because they already have the local supply covered. The objective is to provide the communities with alternatives.”

Onergia, a non-profit organisation, promotes distributed or decentralised generation.

In Mexico, energy cooperatives are a rarity. In fact, there are only two, due to legal, technical and financial barriers, even though the laws governing cooperatives recognise their potential role in energy among other diverse sectors. The other, Cooperativa LF del Centro, provides services in several states but is not a generator of electricity.

The Electricity Industry Law, in effect since 2014, allows the deployment of local projects smaller than one megawatt, but practically excludes them from the electricity auctions that the government had been organising since 2016 and that the administration of leftwing President Andrés Manuel López Obrador put a stop to after he took office in December 2018.

Since then, López Obrador has opted to fortify the state monopolies of the Federal Electricity Commission (CFE) and the Petróleos Mexicanos (Pemex) oil giant, which translates into favouring fossil fuels over renewable sources.

The National Electric System Development Programme 2018-2032 projects that fossil fuels will represent 67 percent of the energy mix in 2022; wind energy, 10 percent; hydroelectric, nine percent; solar, four percent; nuclear, three percent, and geothermal and bioenergy, four percent.

In 2032, the energy outlook will not vary much, as fossil fuels will account for 60 percent; wind, nuclear and geothermal energy will rise to 13, eight and three percent, respectively; hydroelectric power will drop to eight percent; while solar and bioenergy will remain the same.

In Mexico, rural communities are guaranteeing their electricity supply by using clean sources, thus furthering the energy transition to micro and mini-scale generation. The photo shows the "Laatzi-Duu" ecotourism site (the name means "standing plain" in the Zapotec indigenous language) which is self-sufficient thanks to a solar panel installed on its roof, in the municipality of San Juan Evangelista Analco in the southern state of Oaxaca. CREDIT: Emilio Godoy/IPS

In Mexico, rural communities are guaranteeing their electricity supply by using clean sources, thus furthering the energy transition to micro and mini-scale generation. The photo shows the “Laatzi-Duu” ecotourism site (the name means “standing plain” in the Zapotec indigenous language) which is self-sufficient thanks to a solar panel installed on its roof, in the municipality of San Juan Evangelista Analco in the southern state of Oaxaca. CREDIT: Emilio Godoy/IPS

The government cancelled the call for long-term electric auctions that allowed private companies to build wind and solar plants and sell the energy to CFE. But these tenders privileged private Mexican and foreign capital and large-scale generation.

In a dialogue with IPS, independent researcher Carlos Tornel questioned the predominant energy design promoted by the 2013 reform that opened up the hydrocarbon and electricity markets to private capital, and the form of energy production based on passive consumers.

“We don’t have an effective legal framework to promote that kind of energy transition,” said the expert via WhatsApp from the northeast English city of Durham. “A free market model was pursued, which allowed the entry of megaprojects through auctions and allowed access to those who could offer a very low cost of generation, which could only be obtained on a large scale.”

With that strategy, he added, “small projects were left out. And the government did not put in place economic incentives to foment cooperative schemes.”

“We need a more active model focused on the collective good,” added Tornel, who is earning a PhD in Human Geography at Durham University in the UK.

Mexico, the second largest economy in Latin America with a population of 129 million, depends heavily on hydrocarbons and will continue to do so in the medium term if it does not accelerate the energy transition.

In the first quarter of 2019, gross generation totaled 80,225 gigawatt hours (Gwh), up from 78,167 in the same period last year. Gas-fired combined cycle plants (with two consecutive cycles, conventional turbine and steam) contributed 40,094, conventional thermoelectric 9,306, and coal-fired 6,265.

Hydroelectric power plants contributed 5,137 Gwh; wind fields 4,285; nuclear power plants 2,382; and solar stations 1,037.

The Energy Transition Law of 2015 stipulates that clean energy must meet 30 percent of demand by 2021 and 35 percent by 2024. By including hydropower and nuclear energy, the country will have no problem reaching these goals.

Residents of the small rural community of Amatlán, in the municipality of Zoquiapan in the state of Puebla, oversee the operation of photovoltaic panels installed by the Mexican cooperative Onergia. This type of cooperative can help rural communities in Mexico access clean energy, particularly solar power. CREDIT: Courtesy of Onergia

Residents of the small rural community of Amatlán, in the municipality of Zoquiapan in the state of Puebla, oversee the operation of photovoltaic panels installed by the Mexican cooperative Onergia. This type of cooperative can help rural communities in Mexico access clean energy, particularly solar power. CREDIT: Courtesy of Onergia

By early August, the government’s Energy Regulatory Commission (CRE) had granted 310 permits for solar generation, small-scale production and self-supply, totaling almost 22,000 Mw.

The 2017 report Renewable Energy Auctions and Participatory Citizen Projects, produced by the international non-governmental Renewable Energy Policy Network for the 21st Century (REN21), cites, with respect to Mexico, the obligation for investors to form self-sufficient companies, which complicates attempts to develop local ventures.

Onergia’s Castillo stressed the need for a clear and stable regulatory framework.

“A public policy is needed that would allow us to move towards the transition,” he said. “Getting people to adopt alternatives depends on public policy. It is fundamental for people to have the freedom to choose how to consume. It is our job to organise as consumers.”

Affected by the coronavirus pandemic, Onergia is reviewing the way it works and its financial needs to generate its own power supply. It also works with the Renewable Energies Institute of the National Autonomous University of Mexico in the design and installation of solar power systems.

In March, the government’s National Council for Science and Technology launched a strategic national programme on energy transition that will promote sustainable rural energy projects and community solar energy, to be implemented starting in 2021.

In addition, the energy ministry is set to announce the Special Energy Transition Programme 2019-2024.

But to protect the CFE, the CRE is blocking approval of the development of collective distributed generation schemes, which would allow citizens to sell surplus energy to other consumers, and the installation of storage systems in solar parks.

Tornel criticised the lack of real promotion of renewable sources.

“The Mexican government has been inconsistent in its handling of this issue,” he maintained. “They talk about guaranteeing energy security through hydrocarbons. There is no plan for an energy transition based on renewables or on supporting community projects. We have no indication that they support renewable, and that’s very worrying.”

The REN21 report recommends reserving a quota for participatory citizen projects and facilitating access to energy purchase agreements, which ensures the efficiency of tenders and the effectiveness of guaranteed tariffs for these undertakings.

In addition, it proposes the establishment of an authority for citizen projects, capacity building, promotion of community energy and specific national energy targets for these initiatives.

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Crisis Hits Oil Industry and Energy Transition Alike

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Energy

Mexico's state-run oil giant Pemex faces a difficult outlook due to the fall in international oil prices and the crisis resulting from the coronavirus pandemic, which threatens its production and finances, in a situation analysed during the 29th La Jolla Energy Conference, organised online by the Institute of the Americas. CREDIT: Emilio Godoy/IPS

Mexico’s state-run oil giant Pemex faces a difficult outlook due to the fall in international oil prices and the crisis resulting from the coronavirus pandemic, which threatens its production and finances, in a situation analysed during the 29th La Jolla Energy Conference, organised online by the Institute of the Americas. CREDIT: Emilio Godoy/IPS

MEXICO CITY, May 22 2020 (IPS) – While it attempts to cushion the effects of the coronavirus pandemic, the Latin American and Caribbean region also faces concerns about the future of the energy transition and state-owned oil companies.


These questions were discussed at the 29th La Jolla Energy Conference, organised by the Institute of the Americas. It was held online May 18-22, rather than bringing together more than 50 speakers at the institute’s headquarters in the coastal district of San Diego, in the U.S. state of California, in the midst of the COVID-19 pandemic.

Alfonso Blanco of Uruguay, executive secretary of the Latin American Energy Organisation (OLADE), said during a session on global trends and the regional energy industry that the changes seen during the pandemic will spread after the crisis and will be long-lasting.

“There will be structural transformations and we are convinced that most consumer behaviors will change after the pandemic. Demand will vary due to changes in the main areas of transportation and other energy areas. The effects on fossil fuel consumption will be strong and there will be a greater impact on renewable energies,” he said.

OLADE, a 27-member regional intergovernmental organisation for energy coordination, estimates that electricity demand has fallen by 29 percent in Bolivia compared to 2019, as a result of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), which causes COVID-19, and by 26 percent in Argentina, 22 percent in Brazil and 11 percent in Chile.

“There will be structural transformations and we are convinced that most consumer behaviors will change after the pandemic. Demand will vary due to changes in the main areas of transportation and other energy areas. The effects on fossil fuel consumption will be strong and there will be a greater impact on renewable energies.” — Alfonso Blanco

Likewise, final energy demand plummeted 14 percent in Brazil compared to 2019, 11 percent in both the Andean and Southern Cone regions, nine percent in Mexico, seven percent in Central America and five percent in the Caribbean.

As countries went into lockdown to curb the spread of COVID-19, electricity consumption by businesses and factories declined, due to the suspension of activities.

Leonardo Sempertegui, legal advisor to the Organisation of Petroleum Exporting Countries (OPEC), said the pandemic may be a wake-up call for countries lagging behind in the energy transition.

“This may be the new normal. The structure and governance of the energy architecture to cope with the next phase are changing dramatically. Energy poverty and the energy transition cannot be solved regardless of who controls a resource; these challenges cannot wait,” he said in the same session.

In Latin America, nations like Argentina, Bolivia, the Dominican Republic, Ecuador, Honduras and Uruguay have made progress in the energy transition since 2015, while Brazil has slid backwards and countries like Mexico are stuck in the same place, according to the World Economic Forum’s Energy Transition Index, released May 13.

As the region heads into the fourth month of the pandemic, countries are assessing their electricity markets, which have been shaken by the crisis.

Nations like Argentina, Chile, Colombia and Peru have resorted to long-term electricity auctions, which have generated low prices for renewables, while Mexico suspended such schemes in 2019.

In Argentina, as Andrés Chambouleyron, a non-resident fellow at the Institute of the Americas, explained, industrial consumption fell by 50 percent and electricity distributors have not been able to obtain sufficient revenues to cover fixed costs or electricity purchases.

The government has thus provided financing to Cammesa – the electricity wholesale market administration company – to pay the generators, since it is bound by contracts to buy the energy.

“There will be a permanent change in electricity consumption in Argentina. We have cheaper gas than before; the models say that you have to use more gas because it is cheaper than other sources. We won’t see much change in Argentina’s energy mix, and that could extend to all of Latin America,” said Chambouleyron, who warned of breach of and renegotiation of contracts for energy purchases.

Low oil prices threaten to slow down the energy transition in Latin America, although renewable energies already compete with the costs of fossil fuels, agreed experts at the 29th La Jolla Energy Conference, organised online by the Institute of the Americas. The photo shows solar panels on a house in Ajijic, in the western Mexican state of Jalisco. CREDIT: Emilio Godoy/IPS

Low oil prices threaten to slow down the energy transition in Latin America, although renewable energies already compete with the costs of fossil fuels, agreed experts at the 29th La Jolla Energy Conference, organised online by the Institute of the Americas. The photo shows solar panels on a house in Ajijic, in the western Mexican state of Jalisco. CREDIT: Emilio Godoy/IPS

While renewables are already competing in price with conventional sources, low oil and gas prices undermine their expansion, a predicament that alternative energy sources have been facing in recent years.

In addition, the rise in the cost of international credit and the fluctuations of the dollar against local currencies may make generation more expensive.

In another session on the outlook for state-owned oil companies, Marta Jara, former president of Uruguay’s public oil company ANCAP, said the current crisis could accelerate the transition, but called it a “major challenge”.

“The temptation is to be opportunistic and forget the roadmap of the energy transition. We must invest in sustainable energy systems, decarbonise transport. It is important to secure funding and create jobs. I hope the crisis opens the door to be more innovative,” she said.

Viable or not?

The plunge in fossil fuel prices is damaging the finances of the region’s oil producing countries, such as Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, Peru and Venezuela, and state companies in the sector are facing problems with regard to planning and operations.

But it benefits net importers, like the countries of Central America or Chile, whose oil bills have shrunk, while for consumers in both oil producing and importing countries the cost of electricity could go down.

“The most competitive will be the countries with lower oil extraction costs. Some projects will not be economically viable. We will see greater economic problems than in 2019,” predicted Lisa Viscidi, director of the Energy, Climate Change and Extractive Industries Programme at the non-governmental Inter-American Dialogue, during a panel on the situation in several Caribbean nations.

The pandemic and a rise in Saudi production announced on Mar. 10 led to a collapse in oil prices and the consequent risk of bankruptcies in the industry. State-owned oil companies have fared better than others so far in the crisis.

In another session on the outlook for state-owned oil companies, John Padilla, managing director of the private consulting firm IPD Latin America, stated that “it will take time to get out of this situation, with effects for the region, and the need for great efficiency.

“Most nations have been exporters, efficiency will be the key. What has not been done is to cultivate domestic and regional markets, state enterprises are not going to play the same role as they always have,” he said.

Public companies such as Brazil’s Petrobras and Colombia’s Ecopetrol entered the crisis in a better position than Mexico’s Pemex, Venezuela’s PDVSA and Argentina’s YPF, according to experts.

“These are difficult times, even for the best prepared. We can hope that if the country and its company are in trouble, if governments need money, they can get more out of the companies,” said Francisco Monaldi, interim director of the Baker Institute for Public Policy’s Latin America Initiative at the private Rice University in the U.S. state of Texas.

In his view, “Mexico is in better fiscal conditions, it should not be a problem. But Pemex can drag Mexico down. If the government doesn’t change direction, it could become a serious problem,” he said as an example.

Although Pemex will increase its investment in 2020, the oil company reported losses of 20 billion dollars in the first quarter of this year. Due to the crisis, Petrobras limited its investment to 3.5 billion dollars and its daily production to 200,000 barrels, and postponed the sale of eight refineries.

For Lucas Aristizábal, a senior director in Fitch Ratings’ Latin American corporates group, some state-owned oil companies are viable and others are not.

“In 2021, the financial contribution of oil will be lower for governments. If they want the companies to play a key role, they will put more pressure on their financial structure. The current situation illustrates the economics of these corporations,” he said during the forum.

Pemex and YPF were already losing money per barrel in 2019, while Petrobras has more balanced production costs.

On the oil horizon, and in the midst of the COVID-19 crisis, Guyana has become the rising star, although there is still political uncertainty, as the result of the Mar. 2 presidential elections is still unclear.

“It’s hard to predict what will happen. There is a risk of U.S. sanctions that would not affect investment in the sector, but would pose a political risk to the country,” said Thomas Singh, in the Department of Economics at the public University of Guyana.

The country expects to extract 600,000 barrels per day by 2024 and take in revenues of five billion dollars, with reserves exceeding five billion barrels.

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