URUGUAY ADVANCES ON CLIMATE CHANGE

UNCLAS MONTEVIDEO 000181 SIPDIS STATE FOR WHA/BSC MDASCHBACH E.O. 12958: N/A TAGS: SENV KGHG UY SUBJECT: URUGUAY ADVANCES ON CLIMATE CHANGE Summary -------------- ¶1. An environmental current is gathering momentum in Uruguay, with a notable increase in the number of public and press events related to climate change. On March 17, President Vazquez announced the launching of a National Agenda on Climate Change that creates a $6 million emergency fund to help mitigate damage by natural disasters resulting from climate change. Uruguay's economy is largely dependent on natural resources; its economic health, in large part, will depend on its ability to manage its resources as they are affected by climate change. The GOU is a faithful adherent to international climate change agreements, and the new national agenda reinforces its commitment to a sustainable response to the growing challenges in that area. End summary. GOU Announces a National Agenda on Climate Change -------------- -------------- ¶2. Climate change grabbed headlines in Uruguay with President Vazquez's March 17 announcement of its inclusion in the national agenda, but the issue is old news in Uruguay. For years, the GOU and Uruguayan civil society have carried out regular outreach programs and promotion campaigns aimed at increasing the awareness and understanding of climate change issues by different sectors of society (the general public, GOU agencies, and stakeholders in general) as well as building support for the implementation of response measures. ¶3. President Vazquez's National Agenda on Climate Change is another step toward promoting a national debate on the issue. "Fighting climate change must be a matter of the nation's politics," Vazquez said. He announced the establishment of an emergency fund to alleviate the impacts of climate change-induced disasters. An initial $6 million will be committed to the fund with increasing amounts planned for the future. The fund will be used to address the damage wrought by droughts, tornadoes, and floods. A joint working group, including representatives from the GOU and local governments, will help manage risk with a focus on the impact that natural disasters could have on the economy. The 220-page document also includes a summary of climate change research results obtained in Uruguay, and a description of the projects that are already being implemented. ¶4. Both public and private sectors are involved. A measure to require new hotels, sports clubs and hospitals to have solar-powered hot water heaters was passed in the Senate in December and is awaiting approval in parliament. Although it is a progressive environmental measure, it stands to face significant resistance from developers, especially during an election year, due to the additional construction costs. In an ongoing project to increase the percentage of electricity from renewable sources, last week the national electricity agency named several private companies winners of contracts to produce 26.2 MW of renewable energy (including a 5MW contract awarded to U.S. company Weyerhauser). Uruguay has eight projects underway that are reducing the emission of the equivalent of 300,000 tons of CO2, and nine biomass and wind energy projects saving 200,000 tons of CO2. Note: Since they are all Clean Development Mechanism projects, the GHG emission reduction that they will bring, will not be allocated to Uruguay, but to the foreign company that bought them. Therefore, they will not be reflected in the GOU inventories. End note. Climate Change Impacts on Uruguay -------------- ¶5. Although a minor contributor to global warming, Uruguay faces the possibility of being severely affected by climate change. That could result in serious problems in achieving sustained, environmentally-sound economic and social development, given the link between the country's natural resources and its economic performance. Uruguay presents a significant inter-annual and inter-seasonal climate variability, which results in large climate anomalies that manifest themselves as droughts, floods, tornadoes, and modifications in wind, precipitation and storm patterns. Experts believe these extreme weather events are likely to become increasingly frequent and intense. ¶6. Climate change is affecting many sectors in Uruguay, but for the moment the GOU has decided to concentrate its efforts solely on the economy and the environment. The announcement of the plan comes on the heels of a severe drought which is estimated to have caused a loss of $450 million (roughly 1.5 percent of GDP) for the agricultural sector alone. Losses could end up being even higher, though, once the costs of using more expensive energy sources (in the absence of hydropower) are incorporated into the analysis. Other agricultural implications of climate change could include impacts on Uruguay's traditional crop/livestock production system. Minister of Agriculture Agazzi said there may be a "tropicalization" of Uruguay's agriculture, a need for land-use changes (crops vs. livestock vs. forestry),switching of animal species, and changes in biodiversity. Fisheries may also be affected as a result of an increase in the mortality rate of juveniles, and an increase in toxic algal blooms. In terms of tourism (4 percent of GDP),beach erosion is a problem, and the Ministry of Tourism has initiatives to develop environmentally friendly tourism. ¶7. Uruguay's economy is largely dependent -- directly or indirectly -- on natural resources. The management of those resources is a critical link in Uruguay's efforts to both adapt to and help mitigate climate change. Although the agricultural sector's contribution to the country's GDP is only 10 percent, agricultural products constitute about 65 percent of the value of the country's exports. If manufactured goods from agriculture are included, this contribution increases to 85 percent. Eighty-five percent of Uruguay's land is suitable for agricultural production, one of the largest proportions in the world. Livestock production is the most important agricultural activity. ¶8. Uruguay's coast also plays a critical role in the national economy. An estimated 80 percent of the country's GDP is generated from activities taking place in coastal areas (e.g. tourism, fishing, construction industry). Urban growth increases pressures on coastal areas since 70 percent of the population resides in the coastal zone. ¶9. Along with President Vazquez's announcement, Minister of Environment Colacce announced the 2010 launching of a special World Bank-funded Clean Development Mechanism (CDM) for small and medium sized enterprises. Colacce stressed the need to focus on the impact of climate change on the availability, use, and management of the country's water resources and explained how Uruguayan coastal resources are particularly vulnerable to climate change impacts through sea-level rise (he cited an estimated 0.40 meter sea level rise by the end of this century). He pointed out that climate change-caused storm surges could produce a cascade of impacts from beach deterioration and morphological changes to negative effects on wetlands, human settlements, coastal infrastructure, and coast-dependent industries like tourism. Uruguay's Commitment to Combat Climate Change -------------- ¶10. Uruguay ratified the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol in 1994 and 2000, respectively. The GOU has excelled in fulfilling its commitments under the agreements over the past 15 years. A Climate Change Unit (UCC) was created in 1994 within the framework of the National Environment Office (DINAMA) of the Ministry of Environment (MVOTMA). In addition, in 2000, the General Environmental Protection Act was passed which provides a framework for environmental management and incorporates specific provisions for climate change. ¶11. The submission of National Communications is one of the country's main commitments under the UNFCCC. Uruguay was one of the first countries to submit its Initial National Communication in 1997, and was the first developing country that submitted its Second National Communication in 2004. Uruguay is currently working on the Third National Communication, tentatively scheduled for release in November 2009. ¶12. As a result of the work coordinated by the UCC within the context of the formulation of those National Communications, Uruguay has been able to produce five GHG Emissions Inventories (1990, 1994, 1998, 2000, and 2002),a comprehensive Program of General Measures for Mitigation and Adaptation to Climate Change in Uruguay (PMEGEMA),and several related documents. Both Communications reflect the efforts of the country in exploring strategies that would allow it to deal with the effects of climate change. Leading universities and research institutions carried out the research, in coordination with all relevant stakeholders, through the establishment of inter-institutional, multidisciplinary working groups. The implementation of the measures listed in the PMEGEMA was declared of national interest in 2003. The first comprehensive assessment of the country's vulnerability and adaptation to climate change was funded by the USG through the U.S. Country Studies Program. Subsequent to that, the Global Environment Facility (GEF) has been the largest donor. ¶13. Uruguay has also carried out mitigation and adaptation analysis for a wide range of sectors including the agricultural sector, forestry, coastal resources, biodiversity, waste, energy, water resources, fisheries, human health, and transportation. Response measures were identified for each sector, as well as cross-sectoral measures. They were all included in the PMEGEMA Program. An example of successful implementation of a mitigation measure is the World Bank-funded project by which a methane recovery system was built on top of an existing urban landfill in the interior if the country. The methane obtained is used to generate electricity that is later sold to the national grid. ¶14. Since ratification of the Kyoto Protocol on 2000, the GOU has been actively engaged in the identification of potential projects and partners under the Protocol's CDM. Uruguay represents an attractive market for countries interested in engaging in carbon emission trade opportunities and transfer of GHG-reducing technologies and services. Bilateral agreements have been signed with Canada, The Netherlands, and Spain. Business people appear eager to understand the issues at play and how to set up projects to generate carbon credits. Uruguay has nine CDM projects under way, as well as several others in the pipeline. A Congruence of Views -------------- ¶15. The GOU and the USG have similar views on many international environmental issues. This has facilitated dialogue on how countries can promote economic growth and protect the environment. There is a strong commitment, from both the government and the general public, to reduce emissions. Clean energy cooperation is therefore an easy target for bilateral cooperation in Uruguay. MATTHEWMAN