Latin America: Climate Change Swing States

Ecuadorian FMU.S. Special Envoy for Climate Change Todd Stern traveled with Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela to Chile, Peru, and Ecuador last week, to discuss climate change with his government counterparts and civil society. Deepening bilateral and multilateral cooperation to increase economic growth, cutting greenhouse gasses, and helping climate-vulnerable populations were on the official program.

But the political objective of the trip was to push the Copenhagen Accord — a controversial agreement the United States introduced to UN climate talks in 2009 and that several Latin American countries blocked — in advance of the climate summit in Mexico at the end of 2010.

Stern’s South American tour — only three weeks before the next UN Framework Convention on Climate Change (UNFCCC) negotiating session in Bonn — shows the increasingly important role of Latin American nations in reaching a climate deal. His itinerary offered a window into how the United States is using the climate debate as part of a larger agenda to secure political influence, trade, and access to resources in the hemisphere.

An Emerging Latin America

Wealthy countries (“Annex 1″ in UNFCCC-speak) have long been at the center of the climate change negotiations. Together, these countries secure their power by probing at the fault lines that already exist between developing countries — often pitting the most impoverished nations against economically emerging ones. And Annex 1 countries repeatedly pass the buck to developing countries for the failure of negotiations, often blaming China, the Philippines, or any other country that refuses to go along with provisions that will fundamentally undermine developing countries’ economic and ecological interests.

Developing countries in the G77+China (a negotiating block that represents more than 130 nations) have been flexing their collective muscle in climate negotiations of late, especially around the right to develop. China and India, both major emitters of greenhouse gases, are considered influential players because any plan to reduce emissions without their participation would not stop climate chaos. Small island states and African nations hold moral authority, because climate change will be most devastating to their peoples. Latin America, meanwhile, has never been at the center of the climate debate — until now.

This year, global climate negotiations will be held in Cancun, Mexico. The Mexican government is under intense pressure to avoid a repeat of the fiasco in Copenhagen. At that time, the Danish hosts floundered in procedural upheaval, left delegates shivering outside the convention hall while demonstrations erupted inside, and ultimately couldn’t corral the assembled countries into adopting a comprehensive decision.

The Mexican government is determined to make substantial progress on at least two key elements: climate finance and the use of carbon markets to reduce emissions from deforestation and forest degradation (REDD). At the same time, it’s implicitly cautioning that prospects for a global climate deal don’t look promising. Christina Figueres, the 15-year veteran of the Costa Rican negotiating team tapped as the new secretary of the UNFCCC, will be responsible for ensuring that negotiations don’t run aground.

Brazil, largest of the nine countries that make up the Amazon Basin, has positioned itself as a leader on REDD in the Americas. With millions of hectares of land and potentially trillions of dollars at stake — not to mention the rights of indigenous peoples and state sovereignty — Brazil is a key player.

In addition, Bolivia has emerged, along with Ecuador, Nicaragua, and Venezuela, as a bastion for climate justice. Enraged by the exclusive process that led to the Copenhagen Accord, Bolivia called a summit of its own, inviting all governments and civil society to a World Peoples Conference on Climate Change and the Rights of Mother Earth in Cochabamba this April. One outcome of the global gathering was a Peoples Agreement that Bolivia officially submitted to the UNFCCC on behalf of global civil society. Disappointingly, the official text didn’t reflect anything from this agreement. But Bolivia succeeded in generating critical mass for much of its content, including respect for indigenous peoples’ rights; rejection of carbon offsetting; immediate and deep reductions in greenhouse gasses from industrialized countries; and the massive transfer of financial resources from developed to developing nations.

The U.S. Agenda

The United States clearly spelled out its agenda for the international climate negotiations in the strategic communications objectives accidentally leaked in April. At the top of the list was “reinforc[ing] the perception that the U.S. is constructively engaged in UN negotiations in an effort to produce a global regime to combat climate change.” The document also compels the U.S. negotiating team to “create a clear understanding of the CA’s [Copenhagen Accord's] standing and the importance of operationalizing ALL elements.”

The Copenhagen Accord embodies all of the major political demands of the United States. Binding commitments to reduce greenhouse gas emissions have been scaled back to a voluntary “pledge and review” process. The pledges made so far fall short of the 25-40 percent cuts by rich countries that scientists at the Intergovernmental Panel on Climate Change say are necessary to avoid climate catastrophe. Missing those targets carries no legal consequences.

Also gone is the distinction between countries that released the vast majority of global warming gases throughout history and those that have recently joined the ranks of the largest emitters. The Copenhagen Accord requires all developing countries — except small island nations and least-developed countries — to implement greenhouse gas mitigation actions. In fact, the Accord actually stipulates more stringent transparency and reporting requirements for those nations than for wealthy countries.

Developing countries predictably opposed the notion that they should take on binding emissions cuts before the most wealthy and largest emitters on the planet. They also note that the impact of symmetrical cuts is very different for people living in richer and poorer nations. For example, a 20 percent cut in U.S. rates would mean an average reduction to 16 tons of carbon per year per person. The same cut in India would move the average carbon footprint from 1.6 tons to 1.3 tons per year. In other words, even a modest cut in affluent countries would do little to change people’s quality of life, but it would lock developing countries in poverty.

The Copenhagen Accord extols market incentives to bring REDD and forest carbon trading online. REDD is critical to the U.S. pledge to cut emissions 17 percent from 2005 levels by 2020. Purchasing forest carbon credits is cheaper, faster, and easier than cleaning up polluting factories and power plants. Instead of reducing emissions in the United States, polluters would pay forested countries to keep their trees standing, thus “buying” the carbon in the trees to offset their continued release of greenhouse gasses at home. But offsets in general, and forest offsets in particular, have met resistance from climate scientists, financiers, and local communities because they are difficult to verify and impinge on traditional uses of and rights to forests.

In addition, the accord outlines parameters for climate finance. It promises that developed countries will mobilize up to $30 billion by 2012 and $100 billion a year by 2020 for developing countries to adapt to climate change and move to low-carbon development pathways.

Countries like Bolivia and Ecuador argue that rich countries instead owe the developing world a “climate debt.” The Annex 1 countries should repay this debt, in part, by drastically reducing emissions to make room for the people of non-Annex 1 countries to use their fair share of the planet’s atmosphere. Because the industrialized world is in such arrears, climate justice proponents believe that there is no room for offsetting any carbon emissions by purchasing carbon credits. Instead, they demand wealthy countries cover communities’ costs for adapting to a warming world, and make good on commitments enshrined in the UNFCCC to provide support for the transition to low-carbon development. The $100 billion per year outlined in the accord, according to data from the UNDP, UNFCCC, and World Bank, is wholly inadequate to meet these needs.

At his first two stops in Chile and Peru last week, Stern obliquely scolded Copenhagen Accord detractors, saying that “asserting positions that others can’t accept will not advance the ball.” Yet when the United States asserts positions that conflict with developing country interests, less powerful nations are expected to fall in line or fall out of favor.

To add weight to its warning that countries cannot “cherry pick” the pieces of the accord they like, the United States cut $3 million in climate finance to Bolivia and $2.5 million to Ecuador. Stern stated that the funding was “agreed to as part of the Copenhagen Accord, and as a general matter, the United States is going to use its funds to go to countries that have indicated an interest to be part of the Accord.”

The new U.S. “paradigm for climate diplomacy” introduced by climate negotiators in June would seem to include blackmailing developing countries that desperately need support to deal with the consequences of a crisis they did not create.

Stern Goes South

Also in the leaked strategic communications objectives was a proposal to “consider a series of policy speeches/public forums during trips abroad to make our case directly to the developing world.” Cue Todd Stern.

The first stop on Stern’s tour was Chile — a country that, with Colombia, worked to convince Bolivia and other developing countries to support the accord. In his address to students and faculty, assembled at the University of Chile’s School of Economics and Business, Stern congratulated Chile for supporting the Copenhagen Accord. He highlighted the need for greater regional coordination and called on the Americas to install more clean energy to “widen the circle of prosperity across our hemisphere and also reduce our carbon emissions.”

What Stern didn’t mention is that Chile, as one of the global leaders in hydropower, is generating millions of carbon credits that developed countries would want if commitments to reduce emissions are made in Cancun or the year after. The United States already has established close economic ties with Chile in the free-trade agreement the two countries signed in 2004, and plans to fully liberalize trade by 2016 are underway. Energy and abundant carbon credits may well be two commodities that the United States will be shopping for by then.

Peru, a country that’s had a free trade agreement with the United States since early 2009, may also be an important source of cheap carbon credits, in much the same way it now makes minerals and metals readily available to corporations up north. According to Jose Alberto Garibaldi, a former member of Mexico’s UNFCCC negotiating team, Peru has been maneuvering behind the scenes to find an agreement on reducing emissions from deforestation. Peru has not been a major player in climate negotiations. But Stern remarked in Lima that through the U.S.-Peru Trade Promotion and Environmental Cooperation Agreement, “Peru has signaled a commitment to work closely with the U.S. to set up forest and environment management systems…while generating broad-based economic benefits from its forests.” He told Peruvians assembled there that the United States welcomes “exploring possibilities for collaboration with you and your neighbors on an Amazon REDD program.” Stern’s visit may be a subtle nod of approval for their role in securing a forest carbon market and a precursor to pressure from Washington on Peru to build regional support for the Copenhagen Accord.

Perhaps most surprising was Stern’s stop in Quito, Ecuador. The United States slashed $2.5 million of support when Ecuador submitted a letter that it would not join the accord. In response, Ecuadorian Foreign Minister Ricardo Patiño offered the United States $2.5 million if Obama signed the Kyoto Protocol. During his visit Stern diplomatically said that the United States and Ecuador “have to be willing to listen to each other and talk to each other and exchange views.” But he rejected the idea of paying back climate debt out of hand, saying “historic debt or guilt or culpability, no. I don’t see it that way.”

Will Stern attempt to repair the relationship with the United States, knowing that support from Ecuador — an Amazon Basin country with a legacy of indigenous struggle for land rights — will improve the chances for a deal on REDD? Does he sense a fissure between Ecuador and Bolivia that could be exploited to pacify Latin American opposition to the Copenhagen Accord?

The New Land Grab

In a carbon-constrained world, atmospheric space and the right to pollute translate into big bucks. If a multilateral cap-and-trade scheme like the Kyoto Protocol is put into place globally, the right to emit a ton of carbon could be worth anywhere between $2 and $85. The result will be a trillion-dollar international carbon market. Then there are implications for securing energy from low-carbon sources like hydropower, minerals needed for new technologies like efficient batteries, and land on which to grow palm oil, biomass, and carbon-sequestering forests.

No one knows this better than Todd Stern. At the National Agrarian University in Peru, he noted that “less-developed countries around the world that may find themselves resource-poor right now — in a global energy system based on fossil-fuels — have the potential to become resource rich when the sun, wind, and earth are harnessed to create the energy foundation of the 21st century.” He stated that “there is already a race on to create and capture the new markets of the clean energy 21st century.”

The climate community and political pundits will be spending a long time interpreting the signals from this visit, and from future meetings Stern and other U.S. climate officials have with foreign countries. This climate change debate is about much more than ecological stability. Global climate treaties will determine which countries’ fossil-fuel-based growth will be constrained and by how much. The resulting international agreements and domestic policies will determine the relative importance of natural resources in the global economy. Because minerals, forests, agricultural soils, and water are not spread evenly across the planet, securing access to these and other resources will be — and in many regions already are — at the center of the geopolitical struggle precipitated by climate change.

Janet is co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies.