Climate Change and Politics

 


Written by Enrique Lendo, Business Development Mexico Advisor..


The United States of America (US) is the second largest emitter of greenhouse gases after China. In 2018, it emitted 5.41 giga tones, contributing to 15% of global emissions. However, the relevance of the US is not limited to its emissions, it also has strategic roles in international negotiations, production and global trade, innovation, and capital markets. Had the US not come to an agreement with China in 2015, we might not have a Paris Agreement today.

It is for that reason that the Thump’s administration announcement to leave the Paris Agreement hindered the trust of contracting parties and worried many for the potential measures that the US would take at the national level with regards to climate change. Under the arguments of energy sovereignty and employment protection, the Trump´s administration has stood out for questioning climate science, reverting dozens of environmental laws and promoting oil and gas exploitation in public lands.

Despite being the largest economy in the world, the US is highly vulnerable to the effects of climate change. This year is expected to be the warmest in the history of the country and the state of California is currently experiencing a record intensity of wildfires with over 3.4 million acres affected, equivalent to 3% of its surface. Some weeks before, Huracan Laura left 25 billion worth of damages in southern US.

Increasingly, north Americans have become more sensitive to climate change and, even conservatives, are beginning to link some of the impacts in their surroundings with this global phenomenon. Two-thirds of U.S. adults say the federal government is doing too little to reduce the effects of global climate change and 64% say protecting the environment and dealing with global climate change should be top priorities for the president and Congress. Hence, climate change will have a more significant role in the upcoming presidential elections than in previous ones.

In order to set the path towards carbon neutrality in 2050, Joe Biden proposes to invest $1.7 trillion dollars in clean energy while creating 500 thousand new jobs. He has also promise to rejoin the Paris Agreement and to set a carbon tax in the US. While the Republicans´ proposal is ambiguous, they have realized that addressing climate change might look appealing to new generations and some private sector industries. It is for this reason that the Trump administration has proposed to plant a trillion trees and increase investment in carbon capture and storage without harming the fossil fuel industry.

Surprisingly, last week the Commodity Futures Trading Commission released the report “Managing Climate Risk in the Financial System” with concrete recommendations to measure, report and mitigate climate change risk. The announcement is worth noting for being the first time that a federal government appointed commission openly recognizes that climate change poses a systemic risk to the US financial markets

As citizens, we have three options to influences decision making towards green and sustainable economic growth. On one hand, we can influence companies to produce sustainable goods and services through our purchasing power. On the other hand, we can propel capital markets by investing in low environmental impact funds. But the option with the greatest potential of influence rests on electoral processes. The US presidential elections this coming November will define, among other things, the impact of that country to the global environment and the possibility to transit towards a low carbon global economy. I wander when will Mexico be ready place the environment among the top priorities within our political decisions.

Article originaly publised in Reforma news paper.

 

Renew or Die


Written by Enrique Lendo, Business Development Mexico Advisor.


Large oil and gas companies have been consolidating their positions in global markets with products that meet the needs of industrial production, mobility, electricity generation and other industries of modern economies. Without question, they are a strategic industry rarely challenged and even underregulated by governments. It has also been rewarded by capital markets with high rates of return and moderated risk factors despite their externalities. In 2020, five oil and gas companies toped the “Fortune 500” ranking. However, recent socio-economic trends will compel this industry to “adapt or perish”.

Firstly, innovation and technological development have boosted access to oil and gas substitutes along value chains in global and domestic markets. Renewable energy is gaining momentum due to reductions in the cost of production, increase of storage capacity and more reliable distribution technology. In 2020, 29% of electricity produced globally will come from renewable sources.

Secondly, oil and gas prices are extremely sensitive to fluctuations in international markets. Decreasing trends in oil demand for the past few years were exacerbated by mobility and other restrictions imposed to address the Covid-19 pandemic. In the first semester of 2020, oil demand faced a 20% contraction and prices went down to levels not seen for decades.

Thirdly, climate change impacts have made evident the urgency to transit towards a low carbon development model. In 2015, over 190 countries subscribed the Paris Agreement with the objective to stabilize the increase in global temperature at 1.5 °C by the end of the century. The energy sector contributes with over 70% of global greenhouse gas emissions and, according to the Intergovernmental Panel on Climate Change (IPCC), oil and gas production will have to decrease 55% by 2050 to meet the Paris Agreement goals.

Provably, the decisive factor to drive the transformation of the oil and gas industry will be the emerging perception of climate risk in capital markets. Last month BlackRock, the largest asset holder in the world, punished 53 companies due to its weak performance on climate action, including some of the largest oil and gas companies. In the same line, international financial groups are introducing specialized climate solution tools. City Group recently set a $250 billion dollar climate financing target by 2025 and Morgan Stanley will become the first large American bank to publicly disclose the climate change impact of its products.

It is in this context that oil and gas companies with long term vision have begun adapting to the changing environment. This past June, the Oil and Gas Climate Initiative, which gathers a group of companies with a 30% of the production share in the industry, subscribed a carbon intensity reduction target consistent with the Paris Agreement. And last week, British Petroleum (BP), the fourth largest oil company in the world, released its strategy to reach carbon neutrality by 2050, which will very likely set a new benchmark in the industry. BP will go from an oil company to an energy solutions corporation charged with renewable and low carbon products in its portfolio.

In the framework of the Covid-19 economic crisis, even the most polluting companies and industries are presented with the opportunity to reinvent themselves to survive in the long term. What path will Pemex and Mexican energy companies chose?

Article originally published in Mexico´s newspaper Reforma.

Carbon Pricing-The Way to a Net-Zero Emissions Planet


Written by Enrique Lendo, Business Development Mexico Advisor.


Adopted in 2015, the Paris agreement sets the objective to stabilize the average increase of global temperature at 1.5 °C to avoid widely documented catastrophic effects. According to the Intergovernmental Panel on Climate Change (IPCC), this target will be reached only if global emissions of greenhouse gases (GHG) peak in 2030 and become net zero by 2050.

The transformation required to decarbonize our economy is monumental. It implies reconfiguring our energy mix, electrifying our transport systems, reverting deforestation rates, boosting resource efficiency and building smart cities, among many others. The OECD estimates that the investment cost in infrastructure to achieve the global climate change and sustainable development goals will be close to 7$ trillion dollars a year, equal to the GDP of Mexico multiplied by 5. 

Who is to pay for the transition cost? It is very likely that the only feasible alternative to drive the energy transition at the speed required by the Paris Agreement is the massive adoption of “carbon pricing schemes”, which are based on the “polluter pays principle”.

According to the World Bank, carbon pricing schemes throughout the world have increased exponentially going from 7 in 2000 to 61 today. Thirty of these are carbon taxes and 31 are emission trading systems (ETS). Carbon pricing schemes are applied both by national and subnational governments, cover 22% of global emissions and collected $ 45 billion dollars in 2019. Through immediate signals to economic agents, they induce innovation, resource efficiency and important changes to production and consumption patterns. 

Mexico was the first country in Latin America to adopt a carbon tax in 2014, which has collected $ 1.8 billion dollars since its operation began. Mexico´s ETS pilot program was launched this year, considering companies with 100,000 + tones of CO2 emissions from the energy and industrial sectors. The ETS will become fully operational in 2023 and become the first of its kind in the region.

Besides the carbon pricing schemes adopted at the federal level, in the last days some subnational governments in Mexico have shown interest to adopt GHG emissions taxes under environmental and public finance grounds, as well as in reaction to policies adopted at the federal level which prevent the transition to renewable energy. A couple of weeks ago, Tamaulipas became the first subnational government in Mexico to adopt a carbon tax and the state government of Jalisco announced that its carbon tax will enter into force in 2021. The states of Nuevo León, Coahuila, Durango, Michoacán, Colima and Guanajuato are also considering similar taxes.

While carbon pricing schemes around the world have advanced notably, their impact are still insufficient. According to the Carbon Pricing Leadership Coalition (CPLC), the price level to achieve the goal of the Paris Agreement needs to reach $75 dollars per ton of CO2 in 2030. Half of the schemes currently operating around the world have set the price below $10 dollars and Mexico´s carbon tax is only $2 dollars per ton. In this context, it is imperative to secure a substantial increase both in the price level and in the emissions covered by carbon pricing schemes to induce the transformation required. In the same line, it will be necessary to link schemes within and between countries.  

Finally, to foster social acceptance, it is essential that carbon pricing policies consider compensation and transition measures to affected sectors and consumers, which can be financed with the same revenues. The post-Covid economic recovery process provides an opportunity to adjust the relative prices of energy in order to transit towards carbon neutrality by 2050.

Article originally published in Mexico´s newspaper Reforma

ALLCOT and Green Tank, an alliance to promote sustainability and a low-carbon economy in Mexico.

The two companies join forces to support organizations in achieving sustainable and non-polluting business models. The alliance aims to respond to current needs of the Mexican market and the Sustainable Development Goals (SDGs) of the United Nations.

From the time of the launch of Agenda 21 and, more recently, the Agenda 2030, Mexico has actively voiced her commitment to sustainable development and to strengthening the channels for monitoring, communicating and regulating actions that have allowed us to reduce the gap between the high indices of inequality and the high indices of pollution of the 1980s up to the second decade of the 21st century. Undoubtedly, the COVID 19 pandemic of 2020 marks a turning point—not only in Mexico—that calls for being even more rigorous and exhaustive in complying with sustainability goals. The 17 Sustainable Development Goals (SDGs) take on greater relevance and emphasize the right path for humanity and the planet.  

Mexico became a signatory to the Agenda 2030 and the Paris Climate Agreement and included their objectives in national planning through passing reforms to the legal framework and prioritizing those goals in the development strategies. Green House Gas Emissions (GHG) are to be reduced by 22% in 2030 and by 50% by 2050, and the national contribution to the Paris Agreement is being updated to reflect a vision of net zero emissions by mid-century.

To meet its climate mitigation objectives, Mexico established a carbon tax in 2014 and, with its launch of a carbon trading system in 2023, will become the first Latin American country to set a ceiling on emissions through efficiency schemes that promote competitiveness in sustainability. In addition, in 2020 Mexico presented its National Strategy for Implementation of the Agenda 2030 including concrete action plans for achieving each of the 17 SDGs and putting people in the center of the development program under the slogan, “No One Left Behind”.

In response to these priorities, ALLCOT and Green Tank, after many years of promoting sustainability with different approaches, draw closer to combine efforts and advance toward a shared purpose. Today, our goal of promoting compliance with the SDGs and protecting the planet’s resources is intensified, but above all, we strive together to generate prosperity, shared value and promote better living conditions in communities.

ALLCOT, with more than 10 years of experience, develops sustainable projects around the world, supporting its clients and collaborators with know-how and management of initiatives that fulfill the Sustainable Development Goals and actively combat the climate crisis by reducing emissions of Greenhouse Gases (GHG). Since 2017, ALLCOT began operations in Mexico aimed at breaking paradigms in the private and public sectors by promoting vigorous efforts to reduce greenhouse gases through adopting sustainable projects designed to produce social impacts. Also, we have served as a spokesperson for the SDGs with leaders in banking, industry, waste management, construction, tourism and academia. ALLCOT is committed to and forms alliances with companies that, like us, value the environment.

The Green Tank team applies its extensive international experience and multi-disciplinary backgrounds to support businesses as change agents that protect the environment to foster successful and regenerative economies. Green Tank offers strategy, management and communication of projects and products that favor the planet and apply the Triple Impact approach. Our consultancy works to create shared value through collaborative models that stimulate cooperation among businesses and exchange of products or services between Large Businesses and Small and Medium Enterprises for achieving energy efficiency and the circular economy. Green Tank consulting services enable businesses to develop business strategies and measure and comply with the SDGs of the Agenda 2030, and the firm is committed to the movement of B Corps.

ALLCOT and Green Tank merge their pathways and combine tools to pursue a single vision of forming sustainable alliances to promote a sustainable and low-carbon economy and, why not?, to advance towards a carbon-neutral economy motivated by promoting the well-being of the people, communities and organizations where we leave our marks.

Hyper-complexity in the management of sustainable projects


Written by Nicol Garzón, Project Manager Coordinator.


The management of sustainable projects in a territory deserves a careful understanding of the complexity of its systems. Multiple interacting systems, composed of different variables and their relationships, converge on the territory, thus defining nodes of hyper-complexity. These nodes can be carefully managed from the collective expertise and ability to recognize the structural variables and asking the right questions before launching a response.

At the different levels of a territory, there are diverse complexities such as social, ecological, geological, edaphological, hydric, and atmospheric complexities, among many others.  These are not simple chapters of environmental impact studies (to give an example) to be presented to environmental authorities; they are a classification that allows us to understand the numerous list of variables that play a part in each territorial system. Additionally, if we add the fact that they are interconnected and are not an exclusive part of a specific classification, we are made aware of the complexity of understanding and working for the territories.

In our industry we have been inclined at different times, to provide simplistic answers for the territory, that spawn from our understanding of urban areas, without pausing to recognize the hyper-complexity of the territory and its issues, and from there, effectively add value to the territory. As humanity, despite the complexity of our thought processes, we usually use filters and lenses that simplify a territory into a handful of variables depending on the interest of the project, given the restrictions of the system: —usually— budget and time.

Faced with this critical scenario of project management in a territory, from an academic standpoint, and with the aim of recognizing the restrictions of entry, as well as the value of the territory, professionals have been investing without fear, in complex solutions for complex situations.

Interdisciplinary studies, a global understanding of projects —with all macro variables and interconnections—, the identification of the structural variables (that lesser number of variables that have an impact on a greater number of variables), and the differentiation between slow variables and fast variables, are usually heavily invested on. This investment is what allows ALLCOT to have a solid, concrete, understanding of the territorial dynamics.

It is in this scenario of a tongue-twisting language, that the purpose of ALLCOT goes beyond the design of environmental projects, by offering complex solutions to complex situations, which connect the territory and its expectations with market requirements.

ALLCOT maintains its focus on the results that add sustainable value to the territories, but recognizes and takes into account the different structural variables according to the territorial dynamics.

To our Project Managers, ALLCOT’s Project management is not a replicable formula; it is a continuous recognition of the uniqueness of each territory, and its challenges, its changing environments, and of high uncertainty. Projects in ALLCOT do not follow a linear logic, but on the contrary respond to the dynamics of change, to the adaptive processes, to the flows of social and ecological resilience and noticeably to market requirements.

Different countries of the world, including governments in Latin America and the Caribbean since 2015, have incorporated sustainable development goals, and the fulfilment of the goals of the Paris Agreement on Climate Change in their agendas, which has encouraged development of policies, programmes and projects in the territory, that either end up in a “picture-perfect result”, or go beyond, by adding collective value. It is here where managers who close the gap between policy and management, after investing in crafting the right questions, can make sustainable development projects a reality, by recognizing the limits imposed by nature, and achieving social prosperity, under the understanding of territorial complexities.

Nature’s time bomb


Written by Felipe JiménezClimate Change Mitigation Consultant


Humankind is destroying natural environments at accelerating rates. Deforestation, extensive agriculture, climate change, habitat invasion, biodiversity loss, and wildlife traffic, not only destroy vital ecosystem goods and services for humans but also open the way to zoonotic diseases and contamination of urban centers exposing people to deadly pathogens like the SARS-CoV-2, the virus responsible for the current Covid-19 pandemic. It was a matter of time for this time bomb to explode and cause such a dramatic impact in the world, as a result of environmental overexploitation and biodiversity’s mismanagement. 

Governments, with the help of local and international organizations, have a great opportunity and responsibility to set their countries and the world on a more sustainable path. Currently, policies and subsidies have been structured towards the protection and conservation of ecosystems and biodiversity. Governments have understood the importance of reforming subsidies that are harmful to nature and introducing the payment of taxes for those activities involved in environmental degradation and biodiversity loss. The encouragement and promotion of effective nature-based projects and the strengthening of environmental monitoring and regulation procedures are being backed up by the governments and private sector initiative of creating more nature-based jobs. This in turn boosts up the economy and supports recovery processes within the ecosystems, promoting biodiversity’s conservation and restoration.

In addition to these actions, governments all around the world have banned wildlife traffic and taken precautionary measures to ensure food security and healthy consumption. In the same way, society leaders have conducted educational campaigns to raise awareness about the importance of establishing more sustainable alternative activities and confronting the problem through green investment and reinforcement of a more environmentally friendly economy and market. 

Given the current situation, ALLCOT has a clear vision of its role in enhancing practices for the promotion of a resilient and well-functioning ecosystem. As a leader in the formulation of sustainable and climate change mitigation projects, ALLCOT supports the conservation of ecosystems and thus, the protection of biodiversity. Through the projects focused on reducing emissions from deforestation and forest degradation, ALLCOT tackles deforestation and forest fragmentation restoring biological corridors and protecting flora and fauna species, especially those key species considered vulnerable, endangered, or critically endangered due to their role as environmental indicators of a healthy ecosystem. Together with the mitigation and climate action scheme, ALLCOT develops a variety of sustainable initiatives around renewable energy, energy and resource management, and waste management. Through these series of projects, the organization conducts a qualitative evaluation of the Sustainable Development Goals (SDG) that could be positively impacted by the project’s activities and is currently working on a methodology that will allow monitoring this impact.

Among the activities that support the implementation of these programs, the projects include educational campaigns towards wildlife traffic, the correct resource, and environmental management, finance administration, governance, social leadership, etc. Additionally, supporting the previous idea of the encouragement and promotion of nature-based projects, ALLCOT develops well-structured plans that involve local community participation which gives them the opportunity to establish and learn about sustainable alternative activities and businesses.

 We must realize that when we destroy biodiversity, we destroy the system that supports human life. Resources overexploitation, plastic pollution, overfishing, and the contamination of water sources are some additional critical issues that humankind must confront through the alignment of sustainable initiatives and actions. The formulation of such nature-based projects must receive clear support from the government and the private sector. These investments and subsidies will create a more resilient economy and will also tackle social problems such as poverty and hunger. Allcot’s contribution to the conformation and realization of these projects highlights the strong commitment that the organization has with the Paris Agreement objectives and the 2030 Agenda goals.

The SDG index, a Tool for a more Accurate Monitoring of Sustainable Development in Latin America


Written by Andrés Melendro, Sustainability Manager


Last Wednesday, June 16th, the Center for Sustainable Development for Latin America (CODS) launched its SDG Index: a measure of the progress of Latin American and Caribbean countries towards the Sustainable Development Goals (SDGs).

The report highlights that, overall, the region is not meeting the goals set forth in the 2030 Agenda, and that the health and economic crisis linked to the COVID-19 pandemic also represents a considerable setback in most of the SDGs. If the current trend continues, the goals set in 2015 would not materialize even on a 50-year horizon.

SDG 13, Climate Action, stands out as an exception because widespread quarantines and restrictions on production have led to a considerable drop in greenhouse gas (GHG) emissions. However, the rebound effect is foreseeable since the reduction is circumstantial. In particular, it is possible that the interest of investing in sustainable projects and green technologies gets delayed by the haste to reactivate or protect sectors of greater importance for the immediate future of a company. In this sense, ALLCOT’s work to develop projects that generate financial incentives to reduce emissions is more relevant than ever.

The methodology advanced by the CODS is based on the one that the Sustainable Development Solutions Network (SDSN) has been using for several years worldwide to establish international comparisons. The CODS adjusts it to the statistical reality of the countries of the region, given the unavailability of many indicators. In this way, the comparison becomes more valid. In some cases, for some States, there is no available methodology for SDG measurement. Another issue is the lack of data: the index requires figures ex-ante and ex-post 2015 to measure progress since the creation of the 2030 Agenda.

The report also includes a visualization tool called the dashboard. This allows to highlight, through a traffic light code, how close an SDG is to being fulfilled, in order to serve as a prioritization tool in each country.

The publication of the SDG Index, as well as the creation of the municipal SDG indexes in Colombia cities by the Corona Foundation through its network tracking cities’ wellbeing, illustrate the trend towards the appropriation of the SDGs by non-governmental entities and their measurement at sub-national scales. The private sector, and in particular organizations setting standards for corporate sustainability reports, have also included the SDGs in their performance metrics. Precisely, ALLCOT is currently developing statistical tools to quantify the impact of the socioeconomic co-benefits of its climate change mitigation projects, through the 230 indicators associated with the 17 SDGs.

This exercise presents several challenges, given that the project areas tend to be smaller than local political-administrative divisions in the country where the project is developed and usually do not coincide with their geographical limits. ALLCOT, like the CODS, adapts the SDG indicators to the real data availability and to variables that make more sense depending on the specific context. In addition, to mitigate the absence of local data in many rural areas of developing countries, ALLCOT has created mechanisms for collecting primary data to establish a meaningful SDG baseline. In this way, ALLCOT takes a leadership role in measuring corporate impact on sustainable development.

Green Recovery Based on Carbon Pricing and Sustainable Finance for Latin America


 Written by Enrique Lendo, Business Development Mexico Advisor


The current economic landscape is complex, a different scenario from all the sustainability projections for 2020. At the macro level, governments are now able to choose whether the incentives built into their economic recovery policies will be directed to traditional, less competitive, and more polluting industries, or towards sectors that will create economic gains and social welfare in the long term. For instance, investment in renewable energy could bring gains of $100 trillion dollars, create 42 million new jobs, and reduce greenhouse gas emissions in the energy sector by 70% by 2050. 

At the micro-level, manufacturers will have to adapt to the new trends in the value chains of a less interconnected world and find input providers closer to their production centers. In the service sector, digitization and virtualization have expanded like never before, fostering innovation and the development of new products and processes. Only these companies and sectors able to adapt with creativity and speed will survive in the post-Covid world.

In the coming months, trillions of dollars will be mobilized to address both the sanitary and economic crisis triggered by Covid-19. However, only a small fraction of national governments, regional groups, and subnational jurisdictions have signaled their intent to consider sustainability principles and policy tools in their economic recovery plans. The European Union has ratified its net-zero emissions commitment for 2050 by placing its “Green Deal” at the center of its economic recovery strategy, while the new government of South Korea will base its economic recovery plan on incentives for green recovery to reach carbon neutrality by 2050.

In the Americas, this issue has been part of the debate in the recent US legislative and the upcoming national elections, with lawmakers proposing a “Green Deal” as one of the pillars for the economic recovery strategy. In addition, a number of subnational governments such as New York and California have incorporated climate green objectives in their economic recovery plans. On the other hand, Canada’s federal government has stated that the crisis will not obstruct its climate change commitment and it is supporting investment projects to help industries meet their methane emissions goals. Notably, however, climate change and sustainability agendas have been absent in the language of politicians, CEOs, and other decision-makers in the Latin America and Caribbean (LAC) region.

While LAC contributes only 11% to global greenhouse gases (GHG), the region is highly vulnerable to the impacts of climate change. At the same time, many countries in the regions have stood out for their mitigation and adaptation strategies, with emerging carbon pricing schemes in Mexico, Colombia, Chile, and Argentina.

Due to its rich forest, ocean, coastal and biodiversity resources, as well as highly proficient technical expertise in carbon accounting, the region is also a priority geography for Nature-Based Climate Solutions (NCS) Along with globalization, economic integration and the building of environmental laws and institutions in the last years, the private sector in many LAC countries has embraced environmental responsibility principles and practices.

Covid-19´s economic crisis presents major challenges for the LAC region. In this context, governments and companies already engaged in the path towards low emissions and sustainable development might be tempted to deviate from longer-term sustainability goals to address more immediate short-term needs. Opportunities to boost long term and financially sustainable economic growth and create millions of jobs should be secured in cleaner industries. A recent report by UN -Climate found that 35 million green jobs can be created in LAC if the region invests in a 100% renewable energy matrix and electrifies its transport sector. At the same line, tens of millions of jobs could be created in the forest, rural and coastal sectors through forest conservation and restoration, as well as sustainable agriculture and blue carbon projects, financed with carbon compensation credits, green bonds and other financing innovative tools using SDGs and NDCs as benchmarks.

It is in this context that countries in the LAC region will need to design their recovery strategies according to their needs and circumstances, preferably based on low emission and sustainable development criteria. In the design of such strategies, it will be necessary to consider both the scale of resources and incentives needed, as well as the different sources of funding, policy tools, and industries/sectors to trigger the adjustment.

Currently, countries in the region finance their recovery strategies from international sources such as rescue packages from the International Monetary Fund (IMF), and from national public and private sources. In addition, governments may adjust their regulatory frameworks to ease the compliance cost with different standards for the benefit of vulnerable citizens or industries. They can also strengthen regulations, standards, and supervision in those sectors or industries presenting a higher risk to the economy or public health.

The stimulus measures commonly used to incentivize economic recovery in times of crisis include direct government transfers and subsidized interest loans, fiscal loans, debt restructuring or forgiveness, stabilization funds, and investment in infrastructure and public works projects, among others. The destiny of resources can vary from companies and organizations to communities and citizens, according to priority geographies, sectors, and industries in each country. Some areas of opportunities for “Green/Sustainable Recovery Strategies” in LAC countries include:    

  • Trade and investment incentives for clean and sustainable products and services
  • Price incentives for energy intensive industries, including carbon pricing and subsidies phase-out in key environmentally harmful sectors.
  • Public/private investment in natural capital, resilience, adaptation, and sustainable agroforestry, fisheries, and food systems, including Nature-Based Climate Solutions.
  • Automation of processes, digitization, and virtualization of transactions and services.
  • Investment in industries and sectors with high potential for green/sustainable job creation.
  • Reconfiguration of infrastructure investment in the transport-mobility, housing, education, services, entertainment, and leisure.
  • Investment in R&D to boost innovation and improve products and processes towards sustainable patterns of production and consumption.
  • Regulatory and fiscal incentives for sustainable businesses.

Building on CPLC´s model for enhancing dialogue, creating knowledge, and boosting advocacy amongst public and private leaders, a public-private dialogue process is proposed to identify concrete opportunities and projects in the area of carbon pricing, sustainable finance, and economic recovery from the Covid-19 crisis.The initiative could start in countries active in the carbon pricing arena such as Mexico, Colombia, Chile and Argentina, but also others considering carbon pricing instruments at the subnational level or among private actors like Brazil, and with high potential for investment in NCS sectors such as Guatemala, Costa Rica, and Peru.

IETA has already launched a process to develop Natural Climate Solution strategies in the region starting with Colombia, Mexico, and Brazil. In the north of the hemisphere, Canada’s federal government, some Canadian provinces, as well as some states in the US, might be interested in participating. The process could consider representatives from the following areas:

  • National and subnational governments
  • Central Banks
  • Business groups and private companies with green/sustainable profile
  • Banking and finance associations
  • NGOs and think tanks
  • Youth organizations and leaders
  • Cooperatives
  • International Organizations and Development Banks: World Bank, IFC, CPLC, IDB, CAF, UN-ECLAC, UN-Climate, UN-Environment, UNDP, CDB, OECD, GGGI.

 

Cookstove Project: Alternatives that benefit the community and the environment.


 Written by Natalia Rodrigo, Head of Group Business Development


Air pollution impacts from cooking comprising wood-based fuel and charcoal represent 2% of GHG global emissions. This wood-based fuel comes from unsustainable and uncontrolled harvesting practices, which lead to forest degradation and its sub consequent loss of carbon sequestration capacity. In addition, forest degradation is related directly to soil erosion, soil and water pollution, flood risk increase, and biodiversity loss, among others.

It has been reported that nearly 3 billion people make use of this type of household cooking process, mainly located in the least developed countries (LDCs). Apart from the damage to nature and environment protection, this traditional household cooking practice also implies tangible impacts on public health.

As a result, aimed at the urgency of trying to change this dramatic situation, local initiatives have been created. These strategies are supported by international alliances and investors, which promote the gradual substitution of wood-based fuel and charcoal stoves to more efficient devices, enabling to reduce from 30 to 90% the CO2 emissions which are resulted from household cooking. The reduction rate depends, of course, on the technology and type of fuel used by the stove.

Mitigating climate change and environmental degradation require an inclusive industry that makes clean cooking accessible to the three billion people who live without it. From ALLCOT, we develop and support energy demand projects based on the efficiency improvement of traditional household cooking stoves.

All in all, efficient cookstoves projects foster not only GHG reductions but also nurture sustainable development among local communities by advocating the integration of the 17 United Nations Sustainable Development Goals (SDGs). With this cookstove delivery project, we can impact 10 different SDG at once:

SDG 3 Good health & Well-being: Efficient cookstove projects eliminate the black carbon resulted from traditional devices, promoting decrease rates on respiratory and gastrointestinal diseases.

SDG 4 Quality Education: Efficient cookstove projects compose an educational strategy based on operation and maintenance as well as environmental and H&S (Health and Safety) awareness.

SDG 5 Gender Equality: Women are empowered across the implementation of these projects due to the fact of their leadership on the educational strategy.

SDG 6 Clean Water and sanitation: Awareness programs across local communities in terms of the importance of boiling water to prevent gastrointestinal diseases.

SDG 7 Affordable & Clean Energy: Improved cookstoves are based on long-term use devices, boosting effective fuel consumption, implying tangible money-saving across local communities.

SDG 9 Industry, Innovation and Infrastructure: An inclusive industry, based on R&D and improvement of infrastructure, is created across efficient cookstove projects.

SDG 10 Reduce inequalities: Improved cookstoves are based on an affordable price, which encourages local communities to acquire this technology.

SDG 13 Climate Action: Efficient cookstoves projects enable us to reduce from 30 to 90% of the CO2 emissions which are resulted from traditional household cooking devices.

SDG 15 Life on land: Efficient cookstoves projects promote the effective fight against forest degradation and biodiversity loss.

SDG 17 Partnership for the goals: An inclusive industry as well as worldwide institutional alliances are created across cookstove projects.

This project is an example of the effectiveness of cross-cutting projects, which, through concrete action manage to address several issues. For this reason, ALLCOT continues to be committed to this type of action that represents a long-term benefit for both the community and the environment.

Inflection Point


Written by Enrique Lendo, Business Development Mexico Advisor.


The World Environment Day sets a landmark for the international community. On June  5 of 1972, the Stockholm Conference on the Human Environment triggered a process that has produced over 500 international environmental cooperation instruments to date. Mexico has subscribed about a 100 of these agreements, strengthening our environmental management capacity and positioning our country as a player committed with global challenges.

Currently, most of the countries around the world have enacted environmental laws and established institutions for their implementation. However, they have not been capable to halt global environmental degradation. Greenhouse gas emissions have doubled since the adoption of the United Nations Framework Convention on Climate Change in 1992.  We have also lost 80% of wildlife species biomass and half of the natural ecosystem’s original areas due to massive deforestation, urbanization and pollution. Over one million species around the world are in danger of extinction.

But in the last years, the methodologies to monetize climate change impacts and the contribution of natural capital to the economy have also been improved. For instance, we know that services provided by biodiversity to productive systems are worth at least 1.5 times the value of global GDP. We also know that natural disasters cost over $100 billion dollars a year in damages and that the cost of climate change inaction could reach over 15% of global GDP by 2050.

Therefore, capital markets around the world are currently tuning their risk models to account for environmental and climate change impact of investment projects. On one the hand, physical infrastructure is more vulnerable to hydrometeorological impacts, on the other, the new generations of consumers and investors demand responsibly produced goods and services. Mexico´s Central Bank (Banco de México) and the UN have recently released the “Climate and Environmental Risks and Opportunities in Mexico’s Financial System, setting this sector in a path that will reward sustainability and punish pollution through risk assessment.

The post-covid19 crisis provides a point of inflection in which governments and companies are able to choose between updating their strategies towards sustainability patterns or perpetuate inefficient and shortsighted growth models. In the last weeks, countries, regional blocks, and subnational governments around the world have announced green recovery strategies. The European Union just released its € 750 billion economic recovery package to finance low carbon infrastructure. In the US, Democrats are positioning a “Green Deal” in the face of the upcoming national elections, while South Korea and Indonesia already implement green recovery plans.

In contrast, sustainability has been absent in the language of decision-makers in the Latin American region despite its potential to scaleup investment, create jobs, and foster welfare in the long term. A recent UN report concluded that the transition towards renewable energy and transport electrification in the region could create 35 million jobs by 2050. In Mexico, millions of people living in rural areas could benefit from investment packages to foster sustainable practices in the agriculture and forest sectors. But in order to harness these opportunities, governments need to start designing their economic recovery strategies with a comprehensive and long term perspective. Never in history had we been presented with such an attractive and feasible chance to redefine our development model.

** Article originally published in Reforma news paper: