Latin America renewable future.

It has been a good couple of decades for Latin America. Since 1990 the Latin American region has experienced an important growth and a great improvement in almost every metric used to measure the quality of life.

There had been an important poverty reduction, improvements in the public infrastructure, and great increases in the access to electricity and water and sanitation. All of this while the region continued with its rapid urbanization.

There are, however, many problems still persisting, and even some new ones created by this progress.

Greenhouse gases

There are two problems at hand, where the alternative energies could be just the answer we are looking for. First, along with the economic growth and poverty reduction there has been an important increase in greenhouse gas emissions in the region. Even though the region only accounts for a small proportion of the global emissions, its emissions keep growing and some Latin-American countries have per capita emissions comparable with those from high polluters.

In recent years Latin American economy has suffered some contraction, mostly due the falling international prices for many of its exportations. The long term tendency, however, is economical growth, and predictably this will bring an increase in the energy demand. There is a risk that this new demand is covered with dirty technologies, despite the viability of  better alternatives.

The region has an enormous potential for renewable energies, and some experts such as The Solutions Project had showed that we can perfectly cover our future energy demands from renewable sources, and with just a minimum share of mega dam hydropower on the mix.

Even though hydropower has been traditionally accounted as renewable energy, its benefits have been put to question in recent years, both because of its detrimental effects in biodiversity and because of the forced displacement of local populations. Recent studies even suggest that its GHG emissions could be as high as the emissions of thermoelectric plants.

Better access

We have seen some major improvements in the access to electricity in the region, with many countries approaching 100% coverage. There is however still millions of Latin Americans without access to electricity. This population is generally isolated and poor, hence making it more difficult to bring them accessible energy. The costs of expanding the grid are hardly justifiable for such small populations, and even though the grid was indeed expanded, the fixed costs that these new costumers would have to pay would be punitive for them.

The solar energy could be a godsend for these people.

Solar is just one among several alternatives of clean energy. Unfortunately, many of them are unapproachable for this particular case. Solar panels are small, easy to install and maintain, and its price is continuously falling as its yields keep increasing. Solar is the perfect choice for small isolated systems. Even if the price for energy generated unit is higher than the thermoelectric energy, the costs of expanding the grid will easily turn the solar option in the most financially sensible one.

New tools, such as drones and remote sensing satellites could make the design and implementation of these systems more accurate, prompter and even cheaper.

Latin America has still some tough road ahead to bring electricity for its entire population, but never before clean and accessible energy for all has been as attainable as now.

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Renewable Energies in a Cheap Oil World.

Johan Yugar

Few things are harder to predict than the future international oil price.  Back in 2008 when the oil was having its historical peak, it was hard to imagine that we would be back in cheap oil world so soon.

The bad moment of China, the incomplete recovery of United States and Europe, the over production of oil and the refusal of the main producers to cut down the production have configured a scenario of really cheap oil. For the first time in decades we have saw an oil barrel cheaper than a bucket of fried chicken.

We can now safely say that we are in a commodity super cycle of low prices. This new cycle affects the renewable energy industry, since when the oil barrel is at $35 the renewables are no longer a priority.

And so, while cheaper crude may be good for the economy, particularly in the developed world, its consequences for the planet will be detrimental.

So, what can we do?

It is always hard to fight the basic forces of the economy, and most of the countries will welcome the low crude prices as positive for their economies, but there are a few reasons for optimism.

  • As we all know, the oil price is determined by the supply and demand. It is hard to imagine an upturn in the demand with the current trends, but the non-traditional oil, important part of the current oversupply, cannot endure such low prices for a long time.
  • Renewables now accounts for more than 20% of the global electricity generation and most of the sectorial analysis anticipates an increase in its share for the end of the decade, and this raising goes even further in the long term analysis.
  • Renewables keep improving. All the technologies have a learning curve, a period in which new technology is developed and the efficiency and costs of the process are improved. For coal and oil this learning curve is far behind, while for solar and wind energy the learning has just started, and we will see continuous improvements in these technologies in the next years.
  • Maybe the COP21 failed to deliver the wide and ambitious agreement that we expected; nonetheless the commitments reached in the COP21 will change the energy policies of many countries. In order to improve their energy sector while maintaining their environmental goals, many countries will appeal to renewable energies.

Last but not least, we should not forget that we have power. We, as citizens, can always influence in our politicians and their policies. A better informed, more committed community can be an extraordinary tool for positive change.

The climate change and the present bias

                                                                         An Spanish version of this article won the first climate change blogging contest of  the Interamerican Development Bank, and can be found here

Although they are an awesome triumph of evolution, our brains, from time to time, also shows its flaws. One of these weaknesses is that we have serious problems when it comes to making decisions involving the future. We are very bad foreseeing our future preferences, or estimating the real possibilities for us to fulfill our goals. We are also very bad estimating the future value of things or, in any case, we have a bias that leads us to favor immediate gratification.

This temporary inconsistency originates some pernicious and persistent behavior, both personally and socially. At this point we fully understand that climate change is real, that it is consequence of our activities, and that only drastic changes in our practices will allow us to avoid the worst of its effects. Still, this present bias leads us to underestimate the future effects of climate change, and defer urgent and necessary actions.

The importance of climate change as a threat to our future is very present in the public opinion. Surveys like the Eurobarometer or this study from Yale University prove that more and more people understands that climate change is the most important threat for our individual and collective future.

This increase in public awareness has not been turned in new public policies that drives to important emission reductions, neither have motivated the personal shifts that would be expected, except in a small part of the population.

The present bias is part of what makes it so difficult to combat climate change. We are asked to take action and make sacrifices for our future self, but despite how much I love that guy, I rather let him deal with his own problems (and if it is possible, also with mine). The present bias puts us on that path of inaction, in which doubt lead us to not take action, and where we see these problems as foreign and distant ones.

What can we do?

We could apply to this issue some of the tips that psychologists usually give procrastinators.

  • Set clear goals. One of the problems within the UNFCCC negotiations is that they are looking for global reduction commitments, and although this might be the most effective long-term action course, this discussion has paralyzed the countries and prevented them to adopt national or regional emission reduction goals.
  • Look on the bright side. The actions we need can be traumatic for our economies. The long term benefits are difficult to visualize. It would be good to emphasize the immediate benefits of the actions, such as reducing health costs or other economic benefits arising from plans that reduce vehicle traffic.
  • Stop making excuses. We like to justify ourselves, it helps us to live with our decisions or the lack of them. But the absence of broad consensus can no longer be seen as a valid excuse for not taking action. Bilateral agreements or even voluntary reductions increase the pressure on other countries and make it more likely to reach a global agreement. The lack of valid agreements is an increasingly less justifiable excuse for not taking action.

Both personally also socially, we can achieve small wins that allow us to overcome the bias and start a virtuous cycle that leads to the actions we need.

A Tragedy of the Commons in Bolivia

Bolivia’s history is unavoidably related to their mineral wealth. The first important settlements in Bolivia were raised near mineral reservoirs, and our cities grew around the mining. Potosi was built next to an immense silver reservoir known as the Cerro Rico (Rich Mountain), and grew and flourished around its exploitation. According to census from 1573 Potosi had back then 120.000 inhabitants (more than Seville, the biggest Spanish city at the time), and by 1625 had 160.000 inhabitants.

The silver exploitation in the Cerro Rico is even older than the Spanish occupation, and could go as back as year 1.000 A.D., and it continues today. The business model has changed over the time. During the colonial period the mining was made by slaves and the silver was sent to Europe. After the foundation of the Republic the things continue pretty much the same, with the reservoir owned by some wealthy families and the exploitation being made by semi-slave workers. In the middle of the 20th century the mine was expropriated by the State and the exploitation continued until the collapse on the silver market in 1980 when the mine got practically abandoned.

It was after the year 2000, and with the prices going up again, that the miners returned to Potosi, but this time the business model is different. The exploitation isn’t being made by any private or public company, but for many small companies or cooperatives. There aren’t clearly delimited concessions, so the veins are exploited by the first to come. Inside some cooperatives, the workers pay a fee for the right to enter the mine, but there is no limit of how much mineral they can come out with. So, for all purposes, a Tragedy of the Commons scenario has been formed. The mineral and the mountain itself has become a common as there are no clear property rights over it. And because there is no owner, the miners share this reservoir and exploit it as extensively and quickly as possible.

The tragedy is not just the depletion of the mineral (there is no sustainable way to exploit a mineral) but also the side effects of its exploitation. The cooperatives operate without any plan or impact evaluation, and because of their operations now the mountain itself is about to collapse. The mountain has an historical and symbolic value that surpluses the value of all its silver. The Cerro Rico is mentioned in the Spanish Literature masterpiece Don Quijote de la Mancha; along with the city of Potosi has been declared cultural heritage of humanity by the UNESCO, and it’s so important for Bolivian history that even appears in the national pennon. This symbolic and historic value of the Cerro Rico is also a common (or, more properly, a public good), although isn’t a depletable one, and it’s this common that is at risk.

The only way to save the Cerro Rico is to reallocate the miners that work there, and take technical measures to preserve its integrity. This is quite a challenge because the miners are numerous (about 15.000), are highly (politically) organized, and are reluctant to be reallocated. The State has no power or will to enforce a reallocation against such a powerful stakeholder. The only way out appears to be a negotiation, but the miners refuse to stop their activities during the negotiation. So the mountain keeps suffering, and every day we are closer and closer to a complete Tragedy.

The tough road ahead.

Some weeks ago I was invited to a forum about the compatibility of the free markets and a healthy environment. I honestly didn’t expect to have to defend the basic principles of Climate Change in such a forum, so imagine my disappointment when the first question was if we (me and the other panelists) really believed in Climate Change. I was about to respond when another panelist stepped forward and answered for all of us, with a simple: “Be serious, of course there is a Climate Change”.

The science around Climate Change is clear. Decades of measures proves that the climate is changing. The new IPCC report, due to be presented some weeks from now, will address that the human activity is most likely (95% of certainty) responsible for the change. Better science just confirm these assessments. Richard B. Muller, a professor of physics at the University of California, Berkeley, and a former MacArthur Foundation fellow was also a well known skeptic. He conducted a long and meticulous study to discredit the IPCC findings. At the end of the study he had no other choice than to recognize the existence of a Climate Change and the importance to take action.

Either for journalistic integrity (if you believe in their good faith) or because of the oil industry lobbies, the popular media tends to give the same time to the scientists who defend and attack Climate Change science, so the people get the misconception that the scientific community is divided in this matter. That is not truth. The vast majority of the scientists are convinced of Climate Change. This point was proved by a recent article that reviewed 11.944 articles published between 1991 and 2011. More than 98% of these articles concluded that there is a Climate Change and that we are responsible for it (John Cook and others. Environmental Research Letters. May 2013).

But, if it is all so clear, why don’t we take action? Well, that’s a very complex question. The long time that will take until the effects are fully visible is clearly a disincentive. The ignorance and apathy are also important. But mostly is because we don’t fully understand the magnitude of the problem. The media throws us gigantic numbers about an upcoming economical crisis and diverse political problems, and we fall in the typical mistake to attend the urgent and forget the important.

Unfortunately the nature don’t stop giving us some incentives to take action. Europe had the worst floods in centuries, USA had the worst tornado season registered, and the changes in the rain patron are threatening South America harvests. The disasters will continue, and will only get worse.

We still have some time, a very small window of opportunity. We need to put the Climate Change in the focus of discussion, and we need leaders that take the difficult decisions that can save the future. It is a tough road, but we can make it.

For now, I subscribe the initiative of climatenamechange.org, and suggest that we start to name our natural disasters after our politicians, particularly those who refuse to recognize an undeniable fact.

Yasuní. Just a brave first step.

Given that some of the richest mineral and oil deposits are placed in important biodiversity reserves, the countries that posses the deposits faces the difficult decision of to exploit it or not.   The complexity of the decision is increased in poor, undeveloped countries. Despite there is always some discussion, the answer tends to be the same. The money is more important. Even the most progressive governments sacrifice their nature in order to get fresh incomes. There was a very honorable exception to this rule: Ecuador.

The initiative.

Since 2004 Ecuador faced an increasing pressure to exploit the oil deposits in the Yasuní. The Yasuní, a natural reserve with extraordinary biodiversity is also home of the Tagaeri and the Taromenan, two indigenous groups that live in voluntary isolation. In 2007 the Ecuadorian government came out with an innovative alternative. The Yasuní–ITT.

Ecuador was willing to keep the oil (about 846 million barrels) underground, with this proposal the territory itself would be preserved and the emission of about 407 millions of tons of CO2 would be prevented; in exchange, Ecuador was asking to the World, but, most of all to the rich countries, to pay 3.600 million dollars, approximately half the value of the oil they would not exploit. A trust fund was created to collect the money, and its administration was assumed by the United Nations1.

There were, of course, encountered points of view around the project. Still, this innovative idea was a whole new vision of the conservation and incorporated concepts such as shared responsibility and climate justice. It was more ambitious that any other environmental protection measure taken so far, and it was the first national scale project built in the spirit of a post-oil economy.

The response.

The initial response to the initiative was generally positive. People in countries facing dilemmas similar to the Yasuní-ITT proposed this project as an alternative to the exploitation, and some developed countries like Germany and Italy expressed his support. Unfortunately the project concurred with the most important economical crisis that the World faced in 80 years, so this was a serious barrier for the fundraising. It’s also important to note that the initiative had a much more shy response among the countries that are responsible for the bigger part of the CO2 emissions.

Without a question the crisis harmed the negotiations and made more difficult for the potential contributors to take action, but the crisis isn’t a valid excuse for the rich countries apathy.

The errors.

Despite its positive aspects there had been mistakes in every step of the project. The first and most important was the B plan. Correa announced that the initiative was the A plan, and that in the possibility that the goals of fundraising were not fulfilled they would proceed with a B plan, consistent in the full exploitation of the oil deposits. This B plan makes some people think that Correa was not serious about the project. Just a few weeks after the Yasuní-ITT presentation, Ecuador took the first steps to the creation of the so called Pacific Refinery. A 2009 intern document from Petroecuador (Ecuador’s state oil company) showed that this refinery would be the destination of the Yasuní’s crude2 . The B plan was the most important obstacle to the fundraising and is the most important cause of the Yasuní-ITT failure.

The B plan and other mistakes eventually provoked that some key characters –like Roque Sevilla former ITT commissioner or Alberto Acosta important sponsor of the initiative- took distance from the project and Correa’s administration. The succession of deadlines that were set by the government (each deadline involving an evaluation of the continuity of the project) made the initiative looked much like a blackmail. This lack of coherence provoked a series of advances and retreats among the countries interested in collaborate with the project, and eventually fully eroded Ecuador’s credibility in this matter.

When he was announcing the end of the Yasuní-ITT, President Correa blamed the World for the failure. In my opinion the accumulation of mistakes by his administration is the main cause of this outcome. In short terms Ecuador failed in the task to sell the Yasuní-ITT to a World that was, as always, reluctant to big changes.

The future.

One task that Ecuador’s government made pristinely well was to sell the Yasuní-ITT initiative to its own countrymen. The response that Correa’s decision had raised shows this success. There are millions of Ecuadorians that think that the Yasuní should be preserved even if the fundraising goals hadn’t been fulfilled, there are thousands that are willing to resist the government’s decision. There is still some hope for the Yasuní.

Hopefully, some decades from now, we will remember the Yasuní-ITT as the first step in the difficult but indispensable road to a post-oil economy.

1 Yasuní-ITT official website (http://www.yasuni-itt.gob.ec/quees.aspx)

2 July 30th 2011. Plan B, ‘el mayor obstáculo’ para que se concrete apoyo a Yasuní. El Universo.