ARGENTINA: A USEFUL PARTNER ON CLIMATE CHANGE

UNCLAS SECTION 01 OF 03 BUENOS AIRES 000603 SIPDIS DEPT FOR OES/EGC, OES/ENV AND OES/PCI DEPT ALSO FOR WHA/BSC AND WHA/EPSC DEPT PLEASE PASS TO EPA WASHINGTON DC E.O. 12958: N/A TAGS: SENV KGHG ENRG PREL AR SUBJECT: ARGENTINA: A USEFUL PARTNER ON CLIMATE CHANGE BUENOS AIR 00000603 001.2 OF 003 ¶1. Summary: With its reliance on agricultural exports and hydro-electric power generation, Argentina is highly vulnerable to the effects of climate change. As such, the country's plans tend to focus on adaptation rather than mitigation. Argentina was an early participant in the negotiations leading to the establishment of the UN Framework Convention on Climate Change (UNFCCC) and is a respected leader on the issue. ¶2. Post met with senior technical GOA officials and with the MFA's lead negotiator on climate change. Our interlocutors welcomed the initial signals coming from the new U.S. administration and called for closer cooperation with the United States on climate change. The GOA's lead representative, Ambassador Silvia Merega, expressed interest in meeting with our lead climate change negotiator on the sidelines of the June 1-12 Bonn Climate Change Talks. Post believes that the constructive and open-minded positions outlined to us by GOA officials represent an opportunity for the United States. Given Argentina's influence on climate change issues, early engagement to highlight areas of common ground could provide us with significant leverage with many other countries ahead of Copenhagen. End Summary. -------------- CLIMATE CHANGE: IMPACT AND INITIAL MEASURES -------------- ¶3. Argentina is highly vulnerable to the effects of climate change. A large percentage of its exports are agricultural commodities and agro-industrial products, and a large part of its electricity generation comes from hydroelectric power. While spikes in annual average precipitation have resulted in the expansion of crop cultivation and increased hydro power production, they have also brought about serious incidences of flooding. These have been followed by periods of droughts, such as the one Argentina is experiencing at present. Droughts have typically caused reduction in river basin levels and higher concentrations of contaminants in their waters, higher temperatures leading to the expansion of typically tropical diseases (the current dengue outbreak is an example),and losses for agriculture and cattle breeding (this year's soybeans harvest is expected to be 30 percent lower than last year's and early slaughter of cattle has significantly reduced the herd.) The consequences of abrupt changes of weather patterns clearly affect Argentina on many levels. ¶4. Argentina and the United States have different profiles as emitters of greenhouse gas (GHG). While the United States is more focused on energy-related emissions from power generation and transportation, Argentina's principal source of emissions comes from agricultural and cattle breeding production, not from power generation. Hydro-electrical plants account for over 40 percent of electricity power generation, natural gas represents almost 50 percent, and nuclear about 8 percent. There are no coal-fired power plants. Emissions from vehicles are a problem, but it is geographically concentrated in the Greater Buenos Aires area. ¶5. Argentina's Second National Communication to the United Nations Framework Convention on Climate Change (UNFCCC) focused on five studies related to mitigation and the reduction of greenhouse gases emissions. Three of these related to the energy sector, one to carbon sequestration and the other one to methane emissions reduction for cattle. These studies identified actions and policies that could represent a yearly reduction of GHG emissions equivalent to 60 million tons of CO2 in 15 to 20 years. All of the actions called for in these studies require significant funding for start-up of operations, however, and given the country's more urgent development needs, little has been done. Argentina is currently preparing its Third National Communication to the UNFCCC with funding support from the Global Environment Facility (GEF). This communication will reflect the country's proposals for adaptation, where only isolated measures have been implemented so far. ¶6. The Bureau of Climate Change in the Environment Secretariat coordinates information on the different projects managed by all government offices. The Secretariat of Energy promotes the Rational Use and Energy Efficiency Project which, with the participation of the private sector power distribution companies, expects to achieve an accumulated reduction of emissions of 28 million tons in 10 years. The Wind Energy Program is a program for the development of the wind energy industry, with an initial investment of $300 million for a 300MW capacity. The Law on Biofuels establishes the regulatory and promotion structure for the production and use of biofuels, and calls for the mandatory mix by 2010 of biofuels in all liquid fuels used in transportation. ¶7. Argentina also has a fiscal policy of subsidies and tax benefits BUENOS AIR 00000603 002.2 OF 003 for planted forests which, in addition to promoting increased forestry activity, has contributed to a substantial rise in the country's carbon stocks. Argentina's National Parks and Protected Areas structure spans over two million hectares and also contributes to limit deforestation and increase carbon sequestration. ¶8. The National Strategy for Integral Management of Solid Waste is a country-wide initiative which started in 2005 with financing from the Environment Secretariat and the World Bank. It is gradually improving conditions. Still, more than 60% of urban solid waste is disposed of in open pit structures, and the program proposed the closure of these landfills and methane gases capture programs at a later stage. The EPA's Methane-to-Market Partnership Initiative currently supports a few pilot projects in-country. In 2005, the GOA created the Argentine Carbon Fund to finance Clean Development Mechanisms (CDM) projects from the initial start-up stages through development to completion. -------------- - ARGENTINA'S HISTORIC ROLE AT THE UN CONVENTION -------------- - ¶9. Argentina was an early participant in climate change talks and took an active part in the negotiations that led to the establishment of UNFCCC. The GOA's lead negotiator in these early years, Ambassador Raul Estrada Oyuela, played an important role in the drafting of the Kyoto Protocol, which Argentina ratified in ¶1994. Argentina has hosted two conferences of the parties (COP) of the UNFCCC and its ministers have exercised the presidency twice. In September, 2008, Argentina hosted the Calafate Southern Lights Dialogue, the fourth in a series of informal ministerial dialogues on climate change initiated in 2005 by Denmark to exchange ideas about the design of the future agreement ahead of the December 2009 Copenhagen COP. -------------- GOA'S VIEWS OF CLIMATE CHANGE NEGOTIATIONS -------------- ¶10. ESTHCouns met with Nazareno Castillo, Director of the Bureau of Climate Change at the Environment Secretariat, and recently appointed Ambassador Silvia Merega, Director of the Bureau of Environmental Affairs at the MFA and lead climate change negotiator for Argentina. The purpose of these meetings was to outline the new U.S. administration's policies on energy and climate change and to highlight President Obama's Climate and Energy Partnership for the Americas, as well as to elicit views on Argentina's positions and identify possible areas of agreement. Our interlocutors were very knowledgeable about the status of climate change negotiations and were heartened by what they perceived as signals of an important shift in U.S. policies. They welcomed increased bilateral engagement and expanded cooperation on climate change. ¶11. In Argentina, the Environment Secretariat and the MFA's Bureau of Environmental Affairs share responsibility for climate change issues, the former holding a technical and implementation role and the latter focusing in international negotiations. In the recent past, dialogue between the two offices proved difficult, due to the personalities involved. It appears, however, that these problems have now been resolved, and our impression was that the two entities are now in fluid and regular communication. Merega and Castillo told us that the GOA was in the process of setting up an Interagency Climate Change Working Group with the purpose of reaching a better understanding of existing projects and establishing a more efficient cooperation structure to avoid the duplication of efforts. ¶12. Argentina is well respected in international fora on climate change. Its diplomats, officials and experts have important responsibilities in the UNFCCC and the International Panel on Climate Change (IPCC). The GOA is proud of this achievement and appears willing to maintain a leadership role as a spokesman and active participant. Castillo told us that Argentina has historically developed interesting proposals and served as group coordinator and mediator on many issues. As an example, he mentioned the recent proposal that Argentina presented in Bonn in the name of 14 other countries. He noted that, while MERCOSUR countries do not hold a unified position with respect to climate change, especially with Brazil following its own way, Argentina, Uruguay, and Paraguay hold similar views, in particular on the challenges of adaptation. ¶13. Both Castillo and Merega said that Argentina, as member of the G77, believes there should be greater support for strengthening national adaptation activities to climate change, so as to pursue sustainable development goals while reinforcing economic BUENOS AIR 00000603 003.2 OF 003 development, social development, and environmental protection. They described Argentina's position as constructive and made it clear that the GOA supported the view of "common responsibility but differentiated approach." While Argentina shares many of the views of the G77, Castillo stressed that "the GOA considers that, even if developed countries have a greater responsibility, developing countries also need to have an active position. Argentina does not oppose making commitments and actually views this as an opportunity for development." -------------- OPPORTUNITIES FOR COOPERATION -------------- ¶14. Castillo welcomed technology transfers as a strong component of cooperation. As an example of possible collaboration, he mentioned the solid structure of the U.S. environmental monitoring system and its network of meteorological stations. He added that the GOA would like to see an improvement in the market mechanisms of collaboration and noted that Norway had come out with an interesting proposal in this regard, as had South Korea. He pointed out that the Clean Development Mechanisms (CDMs) had been flawed and had not worked out well, with all risk left in the hands of the host country. As possible improvements, he suggested provisions for the increasing costs of implementation, a structure to enable advance payments, and a better regional distribution of projects. ¶15. Ambassador Merega stressed the need to establish new lines of cooperation, sources of financing and technology transfer. She believed that discussions in Copenhagen would center on the topics of international financing and expected cooperation, as well as purpose, goals, implementation systems, mechanism and parameters. She also saw as important subjects for discussion whether the best way to go forward was international cooperation under the UN structure or beyond this structure, and whether the parameters would be different if financial cooperation were to be undertaken in a bilateral or regional way beyond the UN system. Will there be a system establishing more cooperation according to individual country needs, she asked, or will it be based on another system agreed upon and developed in Copenhagen? ¶16. Merega added that she also welcomed further cooperation in the energy sector, particularly in energy efficiency, renewable energies, and transportation. Ambassador Merega looked forward to meeting with the U.S. lead negotiator on the sidelines of the June 1-12 Climate Change Talks in Bonn to explore areas of convergence and possible cooperation. She asked that her request be transmitted to the U.S. delegation. -------------- COMMENT: A USEFUL PARTNER AHEAD OF COPENHAGEN -------------- ¶17. We believe that the constructive and open-minded positions outlined to us by GOA climate change officials represent an opportunity for the United States. Given Argentina's influence on climate change issues, early engagement with the GOA delegation to highlight areas of common ground could provide us with significant leverage with many other countries, not only within the G77 but also within the region, as we get closer to the Copenhagen COP. Argentina's long experience with climate change talks and opinions about which mechanisms have worked best may also be of interest to our delegation in designing the eventual solutions to be proposed in Copenhagen. End Comment. WAYNE