Dominican Republic :
2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Dominican Republic
Author/Editor:International Monetary Fund. Western Hemisphere Dept.
Publication Date:August 15, 2019
Electronic Access: Free Full Text. (Link to PDF)
Summary:
The Dominican economy has enjoyed strong growth since 2014 (6.6 percent, the highest in the Western Hemisphere), supported by stable macroeconomic and financial policies, and a favorable external environment. Growth has generally been above potential, but inflation remains muted and the external position is in line with fundamentals. The strong economic and policy performance has strengthened resilience to downside risks, but vulnerabilities remain. The fiscal position is under moderate sustainability and affordability pressures; key structural bottlenecks have not been addressed; and social outcomes can be further strengthened. Upcoming elections in 2020 are likely to dominate the near-term policy landscape.
Table 1. Dominican Republic: Selected Economic Indicators |
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Projection |
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2016 2017 2018 2019 2020 |
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Output (Annual percentage change, unless otherwise stated) |
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Real GDP 6.6 4.6 7.0 5.5 5.2 |
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Contributions to growth |
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Consumption 3.8 3.6 3.8 4.0 3.9 |
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Investment 3.9 -0.6 3.7 1.3 1.3 |
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Net exports 0.2 2.0 -0.7 -1.1 -0.4 |
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Output gap (% potential output) 1.0 -0.3 0.9 0.8 0.6 |
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Unemployment and Prices (In percent) |
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Unemployment rate ave. 7.1 5.5 5.7 5.5 5.5 |
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Consumer inflation (end period) 1.7 4.2 1.2 4.2 4.0 |
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Consumer inflation (period average) 1.6 3.3 3.6 2.1 4.1 |
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Consolidated public sector 1/ (In percent of GDP) |
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Debt 48.7 51.5 53.1 54.3 54.9 |
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Primary balance -0.4 -0.6 0.1 0.0 -0.3 |
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Overall balance -4.2 -4.5 -3.8 -4.2 -4.6 |
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Central government balance -3.2 -3.4 -2.4 -3.3 -3.3 |
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Revenues and grants 14.5 14.7 14.9 15.0 15.1 |
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Primary spending 15.1 15.5 14.6 15.3 15.2 |
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Interest expenditure 2.6 2.7 2.7 3.1 3.1 |
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Central bank quasi-fiscal balance -1.3 -1.2 -1.2 -1.1 -1.1 |
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Rest of NFPS 0.3 0.2 -0.3 0.2 -0.3 |
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Financial sector (Annual percentage change, unless otherwise stated) |
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Broad money (M3) 9.8 11.2 7.0 7.6 10.9 |
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Credit to the private sector 12.1 10.1 11.1 8.2 9.8 |
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Policy interest rate 2/ 5.5 5.3 5.5 5.5 … |
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Balance of payments (In percent of GDP) |
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Current account, of which: -1.1 -0.2 -1.4 -1.5 -1.7 |
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Trade balance -3.6 -2.7 -4.2 -4.0 -4.0 |
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Financial account, of which: -2.2 -1.8 -2.3 -1.5 -1.7 |
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Foreign direct investment, net -3.3 -4.7 -3.1 -3.1 -3.1 |
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NIR (in millions of U.S. dollars) 6,047 6,780 7,627 8,016 8,622 |
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NIR in months of imports 3.4 3.4 3.7 3.7 3.7 |
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Total external debt (in % GDP) 40.7 43.2 41.5 41.6 40.1 |
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of which: Public sector 26.9 29.2 28.7 29.5 29.2 |
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Sources: National authorities and IMF staff calculations. |
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1/ The consolidated public sector covers the central government, decentralized non-financial institutions, |
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municipalities, social security, non-financial public institutions, the electricity holding company, and the central bank. |
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2/ Latest available. |
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Series:Country Report No. 19/273
U.S. troops in Guyana
A U.S. military contingent was deployed to Guyana to boost its regional influence as it seeks to press for a military intervention in neighboring Venezuela and undermine alleged Chinese and Russian presence in the region.
The four-month long program — led by the U.S. Air Force and dubbed New Horizons humanitarian outreach — is intended to serve as “a stepping-stone toward a prolonged relationship” with the Guyana military forces, U.S.-based Military.com news outlet reported that Air Force officials hope American ties with the Guyanese military will remain strong amid the growing influence of Russia and China in the southern hemisphere as well as the persisting crisis in Venezuela.
“Guyana is going to become a larger player in this region, both economically and politically in the future, so it’s important that we are closely tied with them,” said 12th Air Force Commander Maj. Gen. Andrew Croft..”What we leave is an enduring, physical presence in addition to the partnerships that we build.” Croft cited medical facilities and schools built in 1997 that are still being used today.
Nearly 600 U.S. military service members participated in the project to construct community centers and a women’s shelter in Guyana.
Guyana, third-smallest country on the continent, sits just east of Venezuela, which has endured political turmoil and economic hardship since 2010. “Guyana sits is in a strategic location on the north edge of South America and on the Caribbean. “That’s what makes it important. Also, as political change happens in the nation and they become more aligned with us, it’s important for us to make those personal relationships not only through the embassy, but also through the military and the Guyana defense force, which is currently about 3,000 strong with the intent to nearly double it in the upcoming years.”
The US-led program will move to Honduras.
As nationalism threatens the regional economy, the saviour and donor of massive aid for The Bahamas and chief investor in the region especially in energy security, the USA can proceed to govern the West Indies as an unincorporated territory to protect resources from atavistic forces, totalitarians grabbing resources and criminals trafficking drugs people and weapons of mass destruction killing law-abiding citizens.
Opposition Leader asks Venezuela’s Military to Expel Guerrillas
Juan Guaido, Speaker of the National Assembly, urged the country’s armed forces to expel so-called irregular groups (guerrillas) taking shelter near the border with Colombia and defend Venezuela’s sovereignty.
“Are you happy that these irregular groups continue to operate freely at the border?” Guaido said “The invitation is that we exercise sovereignty and expel irregular groups from Venezuela, the invitation is really to enforce national sovereignty.”
Guaido, who took part in a political event in the central state of Aragua, once again accused the Maduro regime – which he calls a dictatorship – of harboring and funding “narcoterrorist” groups such as the Colombian rebel guerrilla known as the National Liberation Army.
Guaido rejected Maduro’s blaming of the Colombian state for the rearmament former leaders of the dissolved FARC rebel militia announced and said that, on the contrary, the Maduro administration was to blame for their presence in Venezuela.
He confirmed that the Norway-backed negotiations between the opposition and the Maduro administration – which were put on hold – have not resumed.
The opposition has repeatedly denounced the presence of paramilitary groups in the country and believes that, in order to control them, Maduro must step down.
Venezuela is experiencing escalated political tensions since January, when Maduro was sworn in for another six-year term following a resounding electoral win described as illegitimate by the opposition and a section of the international community.
In response, Guaido took oath as interim president based on specific articles of the Venezuelan constitution, after which he received the recognition of over 50 countries led by the United States.
Juan Guaido said that a delegation from Norway is in the country in a bid to get the regime and opposition back to the negotiating table.
Embattled incumbent Nicolas Maduro, who continues to be acknowledged as head of state by dozens of other countries, including Russia and China, suspended mediated talks with the opposition last week.
“The Kingdom of Norway is insisting on the mechanism of mediation, as is the International Contact Group,” Guaido said .
No date has been established for a resumption of the suspended talks but the opposition is willing to “participate in any space that brings (Venezuela) closer to a real solution to the conflict.
The desire for dialogue does not mean pressure will no longer be exerted on Maduro’s regime. “For us pressure is essential under any scenario, and that’s why our allies are exerting pressure …… we’re going to insist via all useful mechanisms upon achieving the proposed objective: an end to (Maduro’s) usurpation, a transitional government and free elections,” Guaido said.
Maduro announced his decision to suspend the Norway-mediated talks with the opposition that had been taking place on the island of Barbados. That decision was due to Guaido’s support for an action by Trump’s administration to freeze all Venezuelan government assets in the US. The move was aimed at further loosening Maduro’s grip on power in Venezuela, a country already suffering from a deep recession, hyperinflation and shortages of basic goods.
Although Maduro supported dialogue as the proper mechanism for resolving the political conflict , he won’t return to the negotiating table “under these conditions.”
Little is known about the content of the talks, although negotiators have said a six-point agenda is being discussed. Maduro’s administration is calling for a lifting of foreign-imposed sanctions on senior Venezuelan regime officials, while the leftist incumbent stressed that his administration will not be blackmailed in the talks nor allow any agreements to be imposed by the United States or its allies.
The opposition, which says Maduro’s May 2018 re-election victory was marred by fraud, insists that any agreement must include new presidential elections.Guaido, the speaker of the toothless National Assembly (unicameral legislature), took oath as interim president in January, after Maduro was sworn in for a second term in office.
Venezuela events may hurt Chevron earnings
(Bloomberg) -Developments in Venezuela could hurt earnings of Chevron, the last major U.S. oil producer.
“Future events related to the company’s activities in Venezuela may result in significant impacts on the company’s results of operation in future periods” the company said in its latest 10-Q filing with the U.S. Securities and Exchange Commission.
The language evolved from this previous quarterly filing, when it said developments in the country could lead to “increased business disruption and volatility in the associated financial results.”
Chevron puts the carrying value of its investments in the country at about $2.7 billion. It recognized $21 million in losses from its share of net income from Venezuelan equity affiliates in the first half of the year. Chevron won a reprieve from the U.S. government sanctions, securing a 90-day waiver from the Treasury Department that allows it to continue operating in Venezuela (as did four American oil service companies). Other government agencies involved in the deliberations opposed any extension, and it’s unclear whether Chevron will get another waiver once the current one expires.
Chevron said that second-quarter net production of synthetic oil from its Venezuela affiliate was zero, compared with 24,000 bpd a year earlier. Net oil equivalent production in Venezuela during the quarter averaged 34,000 bpd, according to Wednesday’s filing.
Latin America and Caribbean Climate Week 2019
19-23 August 2019 | Salvador de Bahia, Brazil
The Latin America and Caribbean (LAC) Climate Week 2019 aims to advance regional climate action. It seeks to support the implementation of LAC countries’ nationally determined contributions (NDCs) under the Paris Agreement on climate change. Like other Climate Weeks held in various regions, the event is envisioned as a stepping stone to the UN 2019 Climate Summit where UN Secretary-General António Guterres has encouraged countries to announce new, more ambitious NDCs.
The LAC Climate week included two technical days followed by two thematic dialogue days and a high-level dialogue day. The main themes were energy transition, industry transition, infrastructure, cities and local governments, and nature-based solutions. Throughout the meeting, participants engaged with one another in side events, an action hub, an exhibition space, and a knowledge corner. There was an academia and youth track for participants to learn and share information about NDCs and climate action more broadly in the LAC region.
The event took place from 19-23 August in Salvador de Bahia, Brazil, hosted by the Federal Government of Brazil with the support of the City of Salvador, Bahia, and co-organized by the UN Climate Change, the Marrakech Partnership for Global Climate Action, the UN Development Programme (UNDP), UN Environment, UNEP DTU Partnership, the World Bank Group, the Inter-American Development Bank (IDB), the Regional Platform for Low Emission Resilient Development Strategies, the Latin American Energy Organization, the Development Bank of Latin America, and the International Emissions Trading Association (IETA).
The LAC Climate Week was attended by around 4000 participants including national, subnational and municipal governments, intergovernmental organizations and agencies, non-government organizations, business, think tanks, and academia.
This report covers the thematic dialogue and high-level dialogue discussions of the 2019 LAC Climate Week.
Brief History of Regional Climate Week
The Regional Climate Weeks were launched in 2017 by the Nairobi Framework Partnership as a platform for stakeholders to meet, share experiences and best practices, and identify mutually beneficial climate action and policy making related to implementing the Paris Agreement. Regional Climate Weeks were built on the success of the Regional Carbon Forums with the aim of continuing their legacy.
The Nairobi Framework Partnership was established by UN Secretary-General Kofi Annan in 2012 at the 12th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) to increase participation in the Clean Development Mechanism (CDM), especially in sub-Saharan Africa. The Nairobi Framework Partnership convened yearly Regional Carbon Forums in Africa, LAC, and Asia-Pacific.
In January 2016, the Nairobi Framework partners met in in Copenhagen and revised their mission in light of the Paris Agreement. The scope of the partnership was expanded to include support to developing countries in the development and implementation of their NDCs.
As part of the new mandate, the Regional Climate Weeks are intended to provide collaborative platforms to address the breadth of climate issues under one umbrella and with unity of purpose, bringing together diverse stakeholders in the public and private sectors around a common goal of addressing climate change.
The first Africa Regional Climate Week was held in Nairobi, Kenya, 9-13 April 2018, and the second in Accra, Ghana, 20-22 March 2019. The first Asia-Pacific Regional Climate Week was held in Singapore, 10-13 July 2018. The first LAC Climate Week was held in Montevideo, Uruguay, on 20-23 August 2018.
Report of the 2019 LAC Climate Week
The 2019 LAC Climate Week began with an opening plenary on 21 August. On Wednesday 21 August and Friday 23 August, participants engaged in thematic discussions. Thursday, 22 August featured high-level discussions. A summary of the opening plenary, selected thematic sessions, high-level discussions, and closing plenary follows below.
Opening Plenary
Rui Costa dos Santos, Governor of Bahia, Brazil, emphasized the urgency of addressing climate change. Antônio Carlos Magalhães Neto, Mayor of Salvador da Bahia, Brazil, highlighted the need to align the fight for social equality with the fight for environmental protection. He underscored the importance of cities in leading discussions on and taking action against climate change. Ricardo Salles, Minister of the Environment, Brazil, said that the protection of the environment and climate are dynamic issues. He emphasized the opportunities in Brazil for environmental protection and development, citing biofuels as an example of a clean energy and a business opportunity.
A panel discussion was moderated by Martin Frick, Senior Director Policy and Programme Coordination, UN Climate Change, who, noting that the UNFCCC, the UN Convention on Biological Diversity, and the UN Convention to Combat Desertification all began in Rio in 1992, said that
“in a sense, we are all children of Brazil.”
Amal-Lee Amin, Division Chief, Climate Change and Sustainability, IDB, emphasized that renewable energy is becoming the cheapest option in the region purely on a cost basis, even without considering externalities, and called for the removal of fossil fuel subsidies. Costa Rica’s goal of achieving zero carbon emissions by 2050, underscores the challenge of achieving zero emissions mobility.
Manuel Pulgar-Vidal, Global Leader for Climate and Energy, WWF International, underscored that the world is not on track to meet its climate goals, and that countries should strengthen their NDCs, define long-term strategies, phase out coal and replace it with clean energy, adopt carbon pricing and other legal mechanisms, foster a just transition, and engage non-state actors.
Niky Fabiancic, UN Resident Coordinator in Brazil, underscored the interconnectedness of the Sustainable Development Goals (SDGs) and climate action, noting that development cannot be achieved without addressing climate change and vice versa.
Carlos Fuller, International and Regional Liaison Officer of the Caribbean Community (CARICOM) Climate Change Centre, highlighted the high rate of attendance at the LAC Climate Week, which resembled that of early COPs. Fuller underscored that an energy transformation based on renewables makes economic sense in the Caribbean.
Kinda van Gastel and Carla Astorga, for Youth, called for greater representation of vulnerable communities, particularly women and poor people, in the decision making process of the climate Convention.
Thematic Discussions and Workstreams
Over two days, thematic discussions and workstreams convened on a range of issues. In thematic sessions, participants discussed: industry transition; energy transition; infrastructure and cities, both local action and global action; and nature-based solutions, both agriculture and land management, and ocean ecosystems and water resources. Workstreams were held on transforming NDCs into investment plans; transparency; adaptation finance; and energy and agri-food chain mitigation issues. Below is a selection of events.
Infrastructure, Cities, and Local Action: Urban Areas and Informal Settlements: The session included a keynote address and two panels.
Tabaré A. Currás, Technical Lead, WWF Cities, noted that the session was inspired by the Talanoa Dialogue, and would explore inclusive leadership within subnational governments to develop resilient and low-carbon urban settlements.
Carlos Fuller moderated the first panel on local efforts to adapt to climate change in urban areas, and underscored the use of traditional knowledge to combat climate change. He highlighted strategies to rebuild informal settlements after natural disasters.
Raúl Salazar, Chief of the UN Office for Disaster Risk Reduction Secretariat for the Americas, noted that small re-occurring disasters are often not acknowledged in the media but have serious economic impacts. He stressed that risks are complex and best reduced through multi-sectoral approaches at local and national levels.
Lisa Morris-Julian of Trinidad and Tobago, said that while children already understand the importance of climate change, the challenge is to ensure that adults do as well. She highlighted the role of indigenous knowledge in addressing climate change.
Fernanda Hassem, Mayor of Brasileia, Brazil, called for the protection of forests, drawing attention to the forest fires burning across Brazil. In explaining that many urban disaster response policies are outdated, she called for updated policies that take into consideration the new climate reality.
Gustavo Londoño, Climate Coordinator, of Aburra Valley, Colombia, said that his city is helping individuals living in slums to rebuild and improve their living conditions following disasters. Acknowledging that relocation is not an option required a change in mindset.
Debora Domina, Coordinator, Municipalities Network on Climate Change, Argentina, highlighted a number of ways that her organization engages local citizens, including consulting youth and local leaders, to ensure that climate plans do not become a technical document left in a drawer.
The second panel moderated by Martina Otto, Head of Cities and Lifestyles, UN Environment, continued the discussion on addressing climate change through planning, focusing on tangible ways subnational governments can mobilize resources.
Sergio Bergman, Minister of Environmental and Sustainable Development, Argentina, called for a move towards “circular governance” where all of the governments work as a team, adding that this would require a paradigm shift. He noted that climate change is an issue of human dignity and that cities are a starting point for change. Bergman suggested that UNFCCC COP 25 participants meeting in Chile should consider that ground-level climate change mitigation practices can unite citizens.
Renata Sene of Brazil, spoke about the importance of an open dialogue with citizens in her city, adding that participation helped to develop a sense of belonging. She underscored the need for transparency, citing successes of her city’s transparency portal.
Felipe Faria, CEO, Green Building Council, Brazil, advised industry engagement in addressing mitigation and adaptation. He noted certifications for good performance, such as Leadership in Energy and Environmental Design, are connected to the efficiency of the building.
Industry for 1.5°C: The Opportunity to Drive Systems Transformation:
Gonzalo Muñoz, UNFCCC COP 25 High-Level Climate Action Champion, said that we live in a finite world and its limits “have slapped us in the face.” Addressing these limits and achieving zero emissions represents a massive opportunity for business, social transformation, and the environment. He underscored a circular economy as a tool to achieve that goal.
Katie Sullivan, Managing Director, IETA, moderated the panel on carbon pricing. She highlighted clear stable mechanisms with no regulatory risk as critical to providing impetus for strong private sector investment.
Adriano Santhiago de Oliveira, Director, Department of Environmental Economics and International Agreements, Ministry of Environment, Brazil, underscored the importance of incentivizing private sector participation, rather than using disincentives. The Paris Agreement should learn the lessons from the Kyoto Protocol in terms of its mechanisms. He emphasized the need to maintain the legal systems from the CDM after 2020. He suggested that adjustment and double counting could be the death of Article 6.
Ramiro Fernandez, of Avina Foundation, noted that 20% of global emissions spanning over 40 countries are subject to carbon pricing mechanisms. The Kyoto Protocol carbon trading system has four key elements that are not present in the Paris Agreement: a global goal, same categories of emissions, yearly reporting, and common use of the Intergovernmental Panel on Climate Change (IPCC) guidelines. He suggested that, in a future zero emissions scenario, the size of the carbon market will be limited.
Keyvan Macedo, Sustainability Manager, Natura Cosmeticos, Brazil, stressed his company’s commitment to sustainability. Noting that biodiversity protection cannot be separated from people and social issues, he highlighted the importance of protecting the Amazon.
Alvaro Lorenz, Global Technical and Sustainability Director, Votorantim Cimentos, underscored the role of the cement sector in global greenhouse gas (GHG) emissions, noting, that, in Brazil, this sector’s GHG emissions are less than those of landfills. Lorenz highlighted technology roadmaps as key for achieving low emissions.
Davi Bomtempo, Environment and Sustainability Executive Manager, Brazil Industry Federation, moderated the panel on climate resilience. Jorge Soto, Sustainable Development Director of Braskem, Brazil, said his company is the world’s leader in bioresin production. He stressed Braskem is on track to achieve 20% reductions by 2020 and is committed to achieve 30% reductions by 2030. Soto underscored the need for industry to have adaptation policies.
Johanna Arriagada Diaz, Project Coordinator, Climate Change Office, Ministry of Environment, Chile, described Chile’s work on sectoral adaptation plans. She noted the importance of participatory processes and vulnerability analyses at the sector level.
Isabel Studer, Director of Strategic Alliances, The Nature Conservancy, Mexico described a project of reef restoration for climate resilience in Yucatan. She explained how businesses, re-insurers, academia, and civil society had partnered in to create a parametric insurance instrument for reef restoration, and how this partnership made the fund more efficient and transparent than traditional government managed funds.
Nature-based Solutions: Agriculture and Land Management:
Pierre-Yves Guedez, Regional Team Leader, UNDP, welcomed the participants to the session, which included three panels.
Isabel Studer moderated the first panel on nature-based solutions as an avenue for decarbonization. She underscored the urgency to stabilize global temperatures, explaining that in order to reach the 1.5ºC target, we need to multiply existing commitments by five. She stressed that farming and forest-based livelihoods can now be part of the solution for climate change, including conservation to increase productivity.
Diana Carolina Useche, Ministry of Environment and Sustainable Development, Colombia, spoke of lessons learned to reduce risks to climate change through nature-based solutions in her country. Among these lessons, she highlighted efforts to increase pollination and the need for communities to participate in project design and monitoring.
Nathalie Clarke Lewis, Grenada, reiterated that NDCs must involve community engagement, which she illustrated through a case study of mangrove conservation and sustainable harvesting in Grenada.
Juan Ferrando, Regional Technical Advisor for LAC, UN Environment, facilitated the panel on Reducing Emissions for Deforestation and Degradation (REDD+) results-based payments. Jaeel Raysa Moraga, Coordinator, Forestry Carbon Fund, Chile, spoke of financing opportunities to reduce deforestation, promote sustainable forest management and restore ecosystems. She explained that the involvement of all federal ministries, as well as the private sector, would increase opportunities for success.
Pedro Soares, Institute of Conservation and Sustainable Development of the Amazon, Brazil, highlighted efforts to reduce deforestation through REDD+ and sustainable forest management, adding that a reduction in deforestation is key to fulfil Brazil’s NDC target.
Helder Zahluth Barbalho, Governor of Pará, Brazil, emphasized his state’s role in mining, livestock, and grain production and cultivation of the Amazon. He said the biggest challenge is ensuring that forest-based livelihoods did not interfere with forest preservation. He characterized the Amazon as his region’s biggest asset and its conservation as important locally and internationally. He said that federal intervention is needed to regulate deforestation, as 70% of deforested areas are on federal land.
Angelo Sartori, Manager of REDD+, Verra, explained that accountability within carbon markets was key to ensuring environmental integrity.
Cristiana Garcia, Climate Change Mitigation Coordinator, Ministry of Environment, Ecuador, underscored her country’s policy to work with local and sub-national governments to report deforestation. She emphasized reforestation plans related to livestock and agricultural activities. She highlighted Ecuador’s REDD+ activities with funding from Germany and Norway.
David Morales Hidalgo, Forestry Officer, UN Food and Agriculture Organization, introduced the final panel on climate-smart agriculture, explaining that small-scale farmers are hit hardest by climate change. He underscored that the views of both the government and the private sector should be considered.
Paula Lewis, General Manager of Belmont Estate, Grenada, explained that her company grows produce and engages in agro-tourism. She cited some best practices on the Estate such as carbon sequestration, forest protection to promote biodiversity, and a composting policy, among others. She urged participants to use traditional knowledge and skills in fighting climate change. She identified challenges including monitoring and evaluating the impacts of climate interventions.
Leonardo Bichara, Brazil Country Officer, International Fund for Agricultural Development, spoke of its projects in the driest areas of Brazil, including improved water and irrigation access through underground dams and wells and the installation of 60 desalination plants.
Tomasz Chruszczow, Special Envoy for Climate Change, Poland, emphasized the IPCC Special Report on Climate Change and Land, which states that 23% of global emissions come from agriculture, forestry, and other land use. He noted that soil, if fertile, can pay back, concluding that
“if we help nature, nature will help us.”
Energy Transition:
This parallel session included a keynote address and two discussion panels.
Gonzalo Muñoz said the world has created a lot of wealth through the creation of negative externalities, calling for a different development paradigm. He said an energy transition toward clean distributed energy that is accessible by all is an extreme opportunity for business and social transformation. He stressed that renewables are not only about the future, but also the present.
Rabia Ferroukhi, Director, Knowledge, Policy and Finance Center, International Renewable Energy Agency, moderated this panel, which aimed to showcase replicable examples of renewable energy and energy efficiency solutions in order to accelerate the energy transition in the region.
Ryan Cobb, Energy Director, Ministry of Public Service, Energy and Public Utilities, Belize, emphasized the CARICOM region’s high dependency on fossil fuels. He stressed energy as one of the pillars of climate action for the Alliance of Small Island States. Saying that renewables are economically competitive and can supply the relatively small loads of islands, Cobb identified barriers to renewables deployment such as monopolistic providers with entrenched interests.
Juan Pedro Searle, Head of Climate Change Unit, Ministry of Energy, Chile, said much is happening in the energy sector, particularly in electricity, with the 20% renewable electricity goal about to be reached. Searle underscored Chile’s goals of phasing out coal by 2029 and being carbon neutral by 2040. He emphasized the need to address the socioeconomic aspects of the energy transition.
Suzana Kahn Ribeiro, Professor and Coordinator, University of Rio de Janeiro Green Fund, underscored the need to transform not only energy generation, but also behavior and consumption patterns. She said research and investment in technology, particularly energy storage, is key. She urged reaching and giving alternatives to the losers of the energy transition, both to mitigate socioeconomic impacts and to reduce resistance to the transition.
Renato Godinho, Head of Energy Division, Ministry of Foreign Affairs, Brazil, stressed that any decarbonization strategies need to include transportation as well as end use sectors. He noted the potential use of biofuels and carbon capture and storage.
Manuel Olivera, Regional Director for Latin America, C40 Cities Climate Leadership Group, explained a roadmap developed by C40 for cities to reduce emissions and adapt to the effects of climate change. He noted that in cities, climate action can occur in the electricity grids, transportation, buildings, and waste management systems.
Henrique Peterson Paiva, Director, Governmental Affairs and Sustainability, Siemens, said Brazil is ahead of the curve in the energy transition, identifying grid management and integration of more renewables as remaining challenges. Peterson Paiva highlighted Siemens’ carbon neutrality goals and how this has influenced the company’s business models, for example its provision of energy services.
John Christensen, Director, UNEP DTU Partnership, moderated the panel on financing the energy transition in the LAC region.
Fernando Araya, Director, National Association of Energy Efficiency Companies, Chile, underscored the integration of renewable energy and energy efficiency. He emphasized energy service company business models as well as energy efficiency insurance. When engaging with banks, he recommended working with the bank legal services as the most effective option.
Isabela Aroeira, Climate Finance Leader, Itaú Unibanco, emphasized green bonds and carbon pricing. She said her bank includes climate risk when considering credit risk for companies in selected sectors.
Luiza Demoro, Lead Analyst, Global Climatescope, emphasized the need to better understand how concessional finance can be best used to accelerate renewables deployment in developing countries, as well as when concessional finance should stop being used to let markets take over.
Giovanni Fernandes, Executive Director, Project Finance, Banco Santander Brazil, underscored the remarkable growth or renewables in Brazil, from no solar and wind in 2009 to over 20GW in 2019, with many projects in the pipeline. He stressed investment is driven by profit, and said that the fact oil companies are making large investments in renewables is a sign renewables are on the right track.
During the discussion participants highlighted issues including green bonds, climate risk disclosure, and drivers for climate change investment.
Transforming NDCs into Investment Plans:
Patricia Campo, Ministry of Climate Change and Energy, Costa Rica outlined Costa Rica’s NDC investment plan. She underscored the importance of capacity building, pilot projects, and focusing on co-benefits. Campo said cost modelling shows a small cost difference between a decarbonized future and business as usual in Costa Rica, not taking into account externalities.
Geraldo Júlio, Mayor of City of Recife, Brazil, and President of Local Governments for Sustainability (ICLEI) South America, highlighted ICLEI’s role in helping cities throughout the region take action against climate change. He highlighted his city’s process of revising its master plan and all urban planning provisions to place sustainability as their central axis, through a process that included civil society participation.
Cayetano Casado, NDC Partnership, described the roles of the NDC Partnership in supporting over 25 countries with their NDCs. He underscored the need to integrate NDCs into national systems, including by mainstreaming NDCs in national and subnational budgets and fiscal policies, elaborating public investment plans, and having NDCs become a regular agenda topic in the planning discussions of various ministries.
Gianluca Merlo described UNDP’s NDC financing strategy. He stressed that countries need knowledge and tools to include climate change in their national strategies. He underscored the need to measure the cost of climate inaction, which he said can reach several percentage points of GDP, citing Chile as a country that has done this type of assessment.
Ana Bucher, Senior Climate Change Specialist, NDC Support Facility, World Bank Group, described the work of the NDC Support Facility. She emphasized processes at the national level to screen their projects’ portfolios, prioritize actions, and integrate the results into government budgets. She underscored the need for national level strategic discussions about NDCs, noting World Bank’s NDC Deep Dive initiative to address such need.
Enhanced Transparency Framework as a Driver for Ambition: Opportunities and Challenges:
Henning Wuester, Director, Initiative for Climate Action Transparency (ICAT), moderated the session on the enhanced transparency framework. He underscored that transparency can contribute to achieving the Paris Agreement goals.
Perumal Arumugan, Regulatory Development Unit, UN Climate Change, highlighted the Katowice outcome on the transparency framework under Article 13 of the Paris Agreement, which he said constitutes enhancement while recognizing parties’ different starting points. He added that the framework can drive ambition by facilitating clarity of mitigation potentials, measuring emissions and emissions reduction progress, and providing confidence to partners and donors.
Fernando Farias, Senior Advisor, UNEP DTU, noted a joint study of ICAT and the Global Environment Facility’s project Capacity-Building Initiative for Transparency (CBIT) that assessed transparency in 39 countries including on NDC tracking, adaptation, and finance. He outlined ICAT’s and CBIT’s initiatives to support LAC countries in tracking progress toward NDC implementation.
Stephanie d’Annibali, Technical Assistant, Ministry of Environment and Sustainable Development, Argentina, highlighted her country’s experience in using their national reporting process to develop climate policy. She explained that their climate action plan has helped to translate their NDC into sectoral goals that individual ministries can be responsible for.
David Ross, Advisor, Grupo Ecológico Sierra Gorda, Mexico, outlined a subnational climate change project using mitigation actions to regenerate landscapes in Mexico. He explained that this project was piloted through the implementation of five ICAT guidelines, adding that the combination of GHG emission reductions and sustainable development bring about transformational change.
Frederico Grullón de la Cruz, Head of the Mitigation, National Council for Climate Change and CDM, Dominican Republic, recounted his country’s experience in integrating subnational level data into national reporting. He outlined the legal process required to develop a national monitoring, reporting, and verification (MRV) system, and explained that both the private sector and municipalities were involved in the subnational components through workshops and data transferal.
In the second panel on transparency of adaptation efforts, Camila Rodriguez Vargas, Mitigation Coordinator, Ministry of Environment and Sustainable Development, Colombia, said that her country established the national system for climate change information, which includes MRV, monitoring and evaluation, and MRV financing systems. Outlining lessons learned, she explained that establishing standards and protocols for information management is key.
Johanna Arriagada Diaz, Ministry of Environment, Chile, spoke of her country’s experience in developing adaptation metrics and tracking tools in order to increase the adaptation ambitions in their NDC. She provided details of the four pilot projects in the regional climate change action plan, adding that monitoring and evaluation of these requires the participation of different actors.
High-level Dialogue
The high-level dialogue convened a ministerial segment and discussions on long-term strategies, NDC implementation, markets and carbon pricing, and NDC financing and green bonds.
Ministerial Segment: Martin Frick said climate change is a race we are not winning but that we can win. He stressed the need for unprecedented levels of cooperation, noting this is what regional weeks are supposed to achieve.
Tomasz Chruszczow underscored the role of natural capacities in the LAC region, including the Amazon, rivers, and oceans. He said that the climate targets and SDGs can only be achieved if all humanity and all countries work together. Chruszczow stressed action at the municipal and household levels.
John Christensen said to reach a 2°C scenario we need to triple the level of ambition of the current NDCs, and to reach 1.5°C we need to quintuple current ambition. He stressed the need for leadership. Christensen highlighted renewables and energy efficiency as key to addressing climate change and cited cooling as an emerging area of climate concern that needs action.
Gonzalo Muñoz said the world has an increased need for forests, oceans, and rivers, and that the LAC region has much to offer in that regard. Muñoz identified LAC as a region of entrepreneurship.
Fanny Sumaya Castillo, Minister of Environment and Natural Resources, Nicaragua, noting the relationship between humans and nature, underscoring that Mother Nature has no borders. She emphasized the need for transformation of the energy mix and for political will and cooperation to address climate change at the international level.
Veronica Camino, Senator, Mexico, for Parlamericas, emphasized the role of the legislative branch in formulating and enacting climate public policies. She highlighted open parliament as a tool for engagement and described the role of Parlamericas in providing climate protocols for parliamentarians.
Afonso Alonzo, Minister of Environment, Guatemala, underscored the need for highest level of political engagement, noting that in Guatemala climate change is among the top five government priorities. He emphasized strategic alliances with local governments.
Antônio Carlos Magalhães Neto highlighted the ways that Salvador da Bahia has worked to mitigate and adapt to climate change, including investing in resilient city planning, innovation, and professional capacity building. He noted that carbon neutrality in his city will not be achieved without changes to public transport, such as the use of electric buses. He identified integration of different levels of government as critical to combat climate change.
Sergio Bergman noted that this is a moment for the LAC region to unite in addressing climate change and use it as an opportunity to reduce inequalities. He also read from the Declaration of the 23rd Meeting of Mercosur Environment Ministers held during the LAC Climate Week, which reaffirms that the exchange of experiences during this week will enhance discussions at UNFCCC COP 25 and the UN Global Climate Action Summit.
Renato Nardello, Country Operations Manager, the World Bank, explained that his organization has adopted a price on carbon and made it mandatory to have GHG accounting on all products. He concluded that the next few months will be critical for climate policy outcomes, adding that the world is watching the UN Global Climate Action Summit and, later, UNFCCC COP 25.
Government of Brazil:
Roberto Castelo Branco, Secretary of External Relations, Ministry of Environment, outlined the five national priorities for the Ministry of Environment, including the urban environment agenda, the implementation of Brazil’s NDC, the national adaptation strategy, the reductions in deforestation and results-based payments, and the development of sustainable agriculture.
He provided geographical context for the country, explaining that 80-85% of the nation’s population live in cities. He stated that for the first time urban areas were given the resources necessary to address environmental issues and stressed sanitation and waste treatment as focus areas.
In terms of Brazil’s NDC, Castelo Branco said that Brazil has committed to reducing GHG emissions by 37% below 2005 levels by 2025, with zero illegal deforestation by 2030. He noted that from 2004-2015, the agriculture sector doubled its production without increasing emissions or total cultivated area.
He reported that there was “a reduction of deforestation in the Amazon since 1994,”
noting that this figure was not from government data. He concluded that Brazil’s agriculture sector feeds people around the world.
Long-term Strategies:
Participants began the session, moderated by Agustin Matteri, Legal Expert, UN Environment, with one minute of silence for the Amazon. Matteri underscored that science is not negotiable. He stressed the need for international cooperation in the LAC region to give strong signals to the private sector.
Amal-Lee Amin, highlighted IDB’s work on a decarbonization pathways in the LAC region. She identified five pillars: decarbonizing electricity and expanding electromobility; improving public transport; reversing deforestation; reducing waste; and switching to low carbon diets and materials. She underscored long-term strategies as laying the right foundations to achieve net zero emissions.
Patricia Campos, Director, Cooperation and International Relations, Ministry of Environment and Energy, Costa Rica, underscored highest level political support as key for Costa Rica’s decarbonization plan. She explained the plan is structured around ten axes, with three periods: 2018-2022 involves the definition of policies and strategies; 2023-2030 represents the inflection point; and 2031-2050 is a period of massive deployment. She underscored the goals of maximizing national benefit, having reasonable costs, and achieving a just transition.
Ivan Valencia, Coordinator, Colombian Low Carbon Development Strategy, Ministry of Environment and Sustainable Development, Colombia, said the IPCC Special Report on 1.5°C of Global Warming was a wake up call for his country. He said that Colombia is seeking a long-term integral strategy to achieve zero emissions, with an important role for stakeholder consultations. Valencia highlighted adaptation challenges in the agriculture sector, citing altitude changes in coffee plantations as an example.
Benno Hain, Head of Climate and Energy Strategies Scenarios, German Environment Agency, explained Germany’s participatory process to develop its long-term strategy, which included upfront broad participation that coalesced into a report which was channeled to government. He said the decarbonization goals were informed by scientific assessments and scenarios, and focus on six sectors: energy, mobility, industry, buildings, agriculture, and waste management.
Ana Carolina Avzaradel, Director of Institutional Development, Brazil Business Council for Sustainable Development, said that long-term strategies allow companies to make long-term plans, especially in contexts dominated by short-term economic worries. She said governments need to establish long-term views with clearly defined national scenarios and official and transparent projections. She called for integration of sectoral policies and fast tracking for green projects.
Emma Torres, Associate Director, Sustainable Development Solutions Network, highlighted that her organization’s deep decarbonization work proved that decarbonization by 2050 is feasible. She underscored the importance of a long-term vision to avoid lock in. Torres said that because decarbonization is transformative, incrementalism should be avoided. She described decarbonization commitments at the state and municipal level in the United States.
NDC Implementation:
Carolina Schmidt, Minister of Environment, Chile and UNFCCC COP 25 President-Designate, explained the intention of the COP 25 Presidency to go bigger and broader than before and to look with ambition at concrete actions. Outlining the seven objectives of COP 25, she noted that groups who are rarely invited will be present, including Ministers of finance, transport, and energy.
Mariana Castaño Cano, UN Climate Change, moderated the session, reiterating that this is the year for implementation.
Sergio Bergman cited his country’s national office of climate change as an example of circular governance, explaining that it helps to ensure that conflicts between sustainability and the economy are not solved at the expense of people’s health. He said we should not divide individuals into climate change culprits and innocents, but rather see that we all have a role to play.
Lisa Morris-Julian explained that too much money is spent on disaster management instead of prevention through mitigation. She also spoke of the importance of women in local politics in the effort to address climate change.
Carolina Schmidt noted that although most of the LAC region contributes very little to climate change, it one of the regions that suffers the most from it. She noted that the region’s relatively small contribution to climate change had previously been an excuse not to act, but it should now be seen as a motivator.
Rogério Zampronha, President, Vestas Brazil, spoke of his company’s efforts to deploy renewable energy in LAC, explaining that it is sustainable and has economic benefits. He underscored challenges for the region’s expansion to renewables, such as limited financing and potential legislation to reduce potential destruction from earthquakes that could restrict development.
Mariana Castaño Cano concluded the session with three words to take away:
inclusion, participation, and ambition.
Markets and Carbon Pricing: Dirk Forrister, CEO and President of IETA, said the only way to achieve net zero emissions is through a global effort. He emphasized the need for systems to allow companies to invest with certainty and security.
Neeraj Prasad, Practice Manager, the World Bank, said that while 20% of global emissions are subject to carbon pricing, only 5% are included in carbon pricing systems that set prices high enough to meet the goals of the Paris Agreement. He stressed that, on carbon pricing, we know what needs to be done and how to do it, but it is not happening at the scale that we want. Prasad emphasized the role of carbon pricing as a source of government revenue.
Leonardo Cleaver de Athayde, Ministry Foreign Affairs, Brazil, recognized carbon pricing as a very important instrument and favored its use, while underscoring that markets will never substitute public finance in terms of climate change finance and fulfilling the obligations of the climate regime. He said that Brazil favors incentivizing rather than penalizing the private sector. Noting that there is not a one-size-fits-all pricing instrument, he stressed the outcome of Article 6 has to be inclusive of all national varieties and situations and maintain environmental integrity to avoid “hot air.”
Juan Pedro Searle underscored that regardless of the amount of funding being mobilized by carbon markets, it is insufficient to address climate change, emphasizing that carbon pricing is part of the solution, not the solution. He said for Chile, there is an urgent need to reach a deal on carbon pricing with meaningful, implementable rules.
Amy Steen, Legal Officer, UN Climate Change, said each country needs to understand how Article 6 works in the context of their own NDC. She underscored the challenges of double counting, how to contribute to adaptation finance, and ways to determine what happens to existing CDM projects that are still mitigating emissions.
Andrei Marcu, Executive Director, European Roundtable on Climate Change and Sustainable Transition, underscored demand, supply, and regulatory frameworks. On demand, he noted the absence of big players such as the US. On supply, he said developing countries that have targets in their NDCs will need clarity before agreeing to Article 6 operational details. On the regulatory framework, he said the fundamental issue is a political question on whether to adapt Article 6 to the bottom up nature of the Paris Agreement, or to force NDCs to meet the requirements of Article 6.
Tomasz Chruszczow said to reduce the carbon footprint of entire societies requires cooperation and realizing synergies. He underscored the need to reach agreement on Article 6 through technical decisions that allow for launching markets. Chruszczow underlined that the rules need to be implementable, not perfect. He observed that transfers do not necessarily mean trading.
NDC Financing and Green Bonds:
Amal-Lee Amin, moderated the panel and stressed that the mobilization of financial resources is necessary to mobilize action to implement NDCs. She underscored that long-term financing strategies and the identification of investment priorities should be considered when updating NDCs.
Dolores Almeida, former Vice-Minister of Finance, Ecuador, called for mechanisms within ministries of finance to track spending on climate actions in national budgets and link it to their NDCs. She said that funding would not only support climate change initiatives but would also play an important role in ensuring that policies and other actions were more sustainable.
Roberto Mario Esmeral Berrio, Deputy Minister of Environmental Management, Colombia, noted that his country’s national development plan links SDGs and NDCs. He said that a long-term vision for sustainable development in national planning will help to enable green bonds and attract investors.
On funding for climate activities, Marco Aurelio Dos Santos Araujo, General Coordinator of Global Development Institutions, Ministry of Economy, Brazil, stressed that loans should be used where possible, keeping grants for the most vulnerable populations who do not have access to credit. He called for exploring new sources of financing, such as through the New Development Bank.
Laura Albuquerque, Technical Manager, Brazilian Business Council for Sustainable Development (CEBDS), explained that her organization has been closely involved with four initiatives that bring the private and public sectors together to fund actions aligned with Brazil’s NDC, including establishing a guideline for businesses eligible to issue green bonds, as well participating in a financial lab sponsored by IDB that funds activities in the energy, agriculture, and sanitation sectors.
Gianluca Merlo, NDC Support Program, UNDP, concluded the session highlighting the importance of monitoring public expenditures in order to reflect on trends.
Closing Plenary
Luis Alfonso de Alba, UN Secretary-General’s Special Envoy for the Climate Action summit, addressed the conference via video address. He said the Climate Weeks provide critical platforms to mobilize climate action. He underscored the need to act now in order to make the deep transformations that our societies need in order to limit warming to 1.5°C. He noted the thematic discussions will provide an important input to the climate summit.
Martin Frick and Mariana Castaño Cano provided an overview of the LAC Climate Week’s main takeaways that will inform the summit. As an overarching takeaway, they noted, is the great potential of the LAC region to contribute in all sectors toward the 1.5°C goal, through action which should be realized by leadership and finance. Other takeaways included:
- the need for governments at all levels to develop policy frameworks for sustainable mobility, taking advantage of favorable conditions for low emission vehicles that use renewables and biofuels;
- the need for targeted policy and regulatory frameworks for the industrial sector to invest in decarbonization and increased adaptation;
- the use of cross-sectoral climate risk assessments and disaster reduction plans to increase urban resilience;
- the need for integration of climate considerations into urban planning and development;
- realizing the large mitigation and resilience potential through protection and restoration of forests, and adoption of good practices in land use;
- taking action on adaptation in coastal zones, low lying areas, and small islands;
- taking advantage of renewable energy and energy efficiency technologies already economically viable and available today; and
- enacting long-term planning, strategies and policies targeted to energy production and use in transport, industry and buildings, while addressing the social impacts of the energy transition including through stakeholder engagement.
Gonzalo Muñoz stressed the need to include non-state actors, highlighting the need for strengthening public-private partnerships and for industry to embrace innovation and cooperation with the public sector. He said the transport sector clearly reflects the tension between individual and collective actions, noting that we have the knowledge and technology and have identified the infrastructure challenges. He underscored resilient cities as a manifestation of climate justice. Muñoz emphasized the LAC region’s opportunity to provide nature-based solutions, particularly in the agro-forestry sector.
Isabel Studer emphasized scaling up nature-based solutions, so land use and coastal sectors, which represent roughly a quarter of GHG emissions, could become a solution instead of a problem. She said addressing climate change required not only the energy transition to renewables, but also transforming the ways we produce and consume food. She underscored the role of leadership in enabling that transition and of civil society in crystallizing such leadership.
Martin Frick said there is no difference between climate action and development, stressing that leadership is not the privilege of people at the highest level, but can be exercised in all spheres of society.
Frederico Villatico Campell, Regional Manager, Climate Technology Centre and Network, spoke of the importance of addressing country needs as a way to step up ambitions. He explained that mitigation and adaptation are distinct when it comes to funding, as mitigation has more opportunities for investments than adaptation.
Stephanie Horel, EUROCLIMA+ Programme Manager, DG International Cooperation and Environment, European Commission, explained that the public sector alone is not able to achieve the Paris Agreement goals, and that the private sector and civil society also need to be engaged, adding that points of common interest help bring solutions.
Francisco Maciel, Executive Secretary, Inter-municipal Consortium of Western Brazil, underscored the role of communities during the LAC Climate Week, explaining that local governments are closest to those who are hit by natural disasters and should be empowered to be champions for strengthening adaptation. He called for creative types of funding, particularly for green infrastructure.
The Dominican Republic announced it will host the 2020 LAC Climate Week.
Martin Frick closed the week by acknowledging those who are suffering from climate change around the world, including those affected by the current fires in the Amazon.
Youth Climate Summit: (Link)
One of expected components of the UN Secretary-General’s Climate Action Summit in 2019 is the Youth Climate Summit. The Youth Climate Summit will bring together youth and civil society leaders from across the world who share the commitment to combat climate change “at the pace and scale needed to meet the challenge.”
date: 21 September 2019 location:New York City, US
UN 2019 Climate Summit:
UN Secretary-General António Guterres is convening the UN Climate Action Summit under the theme “A Race We Can Win. A Race We Must Win,” to mobilize political and economic energy at the highest levels to advance climate action that will enable implementation of many of SDGs. It aims to challenge states, regions, cities, companies, investors, and citizens to step up action in nine areas: mitigation; social and political drivers; youth and public mobilization; energy transition; climate finance and carbon pricing; industry transition; nature-based solutions; infrastructure, cities and local action; and resilience and adaptation.
date: 23 September 2019 location: UN Headquarters, New York
www: https://www.un.org/en/climatechange/
SDG Summit:
The High-level Political Forum on Sustainable Development (HLPF), under the auspices of the UN General Assembly, will assess progress achieved so far since the adoption of the 2030 Agenda in September 2015 and provide leadership and guidance on the way forward that would help accelerate implementation of the 2030 Agenda and the SDGs.
dates: 24-25 September 2019 location: UN Headquarters, New York
www: https://sustainabledevelopment.un.org/sdgsummit
III Latin American and Caribbean Congress of Protected Areas:
The theme of the Congress is ‘Solutions for Welfare and Sustainable Development’. An initiative of the International Union for Conservation of Nature (IUCN) and its World Commission on Protected Areas (WCPA), the Congress provides a space for exchange of experience and debate on the formulation and implementation of public policies.
dates: 14-17 October 2019 location: Lima, Peru