Trade and Investment

Is China pulling Latin America in an unsustainable direction?

New research looks at options for cooperation that limit power of CELAC’s 'dirty' ministries

Latin America’s evolving relationship with China was a central theme at the recent III Summit of the Community of Latin American and Caribbean States (CELAC) in Costa Rica last month. This followed the first China-CELAC Forum held in Beijing in January which is regarded as a significant upgrade to their partnership.

But while Latin American countries increasingly court the Asian giant as a major trade and investment partner in the region, there is another side to Chinese-Latin American relations.

China’s activities in Latin America tend to focus on high carbon activities such as mining and fossil fuel extraction. This may be entrenching high carbon development pathways in Latin America and pulling the region in an unsustainable direction.

China’s relationship with Latin America may be strengthening the relative power of domestic actors such as “dirty” ministries (e.g. mining or energy) in relation to environment and climate change ministries. These actors are less inclined to promote an ambitious climate agenda compared to ministries of environment which are traditionally marginalized.

China may be inadvertently undermining Latin America’s attempts to advance climate change policies by reinforcing and strengthening actors within those countries that regard action on climate change as an impediment to growth.

The rapidly expanding ties between China and Latin America have far reaching implications for global efforts to confront climate change. Together, these countries account for roughly 36% (China 27% / CELAC 9%) of total global greenhouse gas emissions. The world’s ability to stay below a global average temperature increase of two degrees this century will rest in part on the willingness of these countries to reduce their emissions and shift to low-emission economies.

A new discussion paper produced by the Climate and Development Lab and E3G looks beyond this framing of Chinese-Latin American relations by exploring some of the opportunities for low carbon development.

It addresses four areas for improving China-Latin American cooperation on low carbon development and climate change including renewable energy, sustainable cities and reducing the environmental and carbon footprint of Chinese-related activities in Latin America. It also looks at the potential of the evolving international architecture for climate finance, particularly the role of the new China-backed financial institutions to help finance Latin American efforts to confront climate change.

For example, there is remarkable potential for China and CELAC to cooperate on renewable energy. China’s growing domestic renewable energy market and influence in exporting technology to global renewable energy markets presents excellent opportunities to invest in clean energy in CELAC. The conditions in Latin America and the Caribbean for renewable energy are encouraging with over a dozen countries having established renewable energy targets. The Inter-American Development Bank says that the region can meet its future energy needs through renewable energy sources, including solar, wind and geothermal, which are sufficient to cover its projected 2050 electricity needs 22 times over.

The newly created China-CELAC Forum has the potential to be a transformative platform to reverse the high-carbon partnership between Latin America and China. CELAC should use the China-CELAC Forum as a means to engage with China on taking action on climate change within their bilateral partnerships and ensure that Chinese-Latin American relations contribute positively towards efforts to create an ambitious and equitable global climate agreement.

The economic slowdown in Latin America and the Caribbean and China is no excuse to undermine environmental or climate policies to attract foreign investments for short terms gains. Instead it presents an opportunity to set Latin America and the Caribbean on the path towards creating low-emission and resilient economies. To that end, the China-CELAC Forum could prove pivotal to Latin American and Caribbean countries’ efforts to respond to climate change.

Guy Edwards is a research fellow and co-director of the Climate and Development Lab at the Institute at Brown for Environment and Society, Brown University. He is the co-author of a new book to be published by MIT Press this October with Timmons Roberts called A Fragmented Continent: Latin America and the Global Politics of Climate Change.


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