UNO July 2023

Finding a balance between the green and energy transitions

When Olaf Scholz visited Brazil in January 2023, he announced a donation of more than 200 million euros to protect the Amazon. He was the first foreign leader received by President Lula da Silva following da Silva’s re-election. A prominent part of their meeting was dedicated to the environment. “It’s good news for the planet that Lula is determined to fight climate change and the destruction of the rainforest,” the German chancellor stated. While that goes without saying, we know all too well that these are two mammoth tasks that require collaboration, coordination and commitment. 

It’s common knowledge that Latin America and the Caribbean (LAC) play an outsized role in the fight against climate change and the green transition, for example, the Amazon is the lungs of the world and home to enormous biodiversity. Some food for thought, LAC is home to 33 % of the arable land on the planet, 25 % of its rainforests, 52 % of copper reserves, one third of the Earth’s drinking water, 20 % of its hydroelectric capacity and 40 % of the rare earth materials. 

Despite being responsible for only 8 % of global greenhouse gas emissions, the region is one of the most vulnerable to the effects of climate change. The destructive power of hurricanes, droughts, fires and floods have cost the region the equivalent of 1 % of GDP on average, and as high as 2 % in some Central American countries. According to a report by the World Bank, more than 17 million Latin Americans could become climate displaced by 2050. It is also the most dangerous region in the world for people defending the environment.

The EU can, and must, contribute financing and support to increase the adaptability, mitigation and resilience of Latin American countries

Unquestionably, the EU (whose emissions, in a much more industrialized context, also account for 8 % of the world total) can, and must, contribute financing and support to increase the adaptability, mitigation and resilience of Latin American countries. 

This recognition goes beyond the mere desire to support the transition to green and sustainable economies in order to achieve the goals of the global climate agenda. Europe seems to have “suddenly” realized that LAC can be a significant partner in ensuring energy and digital transitions that are critical for the future. 

The process is shaped by two fundamental factors. First, the war in Ukraine has forced a reduction on the reliance on Russian energy to a minimum, significantly accelerating the energy conversion of EU countries. Second, amidst the growing rivalry between the United States and China, Europe has expressed its determination to initiate a process that the President of the European Commission has dubbed “de-risking.” The term refers to the need to reduce weaknesses resulting from reliance on critical raw materials from the Asian powerhouse, with figures reaching up to 98 % in the case of rare earths.

Lithium is another prime example. Lithium is used to power long-life batteries, whether for telephones, computers or other electronic devices, including those of electric vehicles, as well as to store energy produced by solar panels and wind turbines. Storing wind and solar energy is the foremost challenge facing renewables. The region known as the “lithium triangle”, composed of Chile, Argentina and Bolivia, accounts for approximately 60 % of the world’s lithium reserves. While theoretically a huge opportunity, in practice there are many challenges related to resource control, foreign “predators”, environmentally friendly extraction methods, respect for indigenous rights, and the desired shift toward a productive development model that goes beyond traditional extractivist patterns to generate authentic added value.

The commitment to a just transition that considers the impact on women and local populations, especially indigenous populations is evident. The commitment is grounded in the pursuit of inclusiveness and equity, protections for workers and the recovery of ancestral knowledge and traditions, all of which is reflected in the documents and initiatives of the bi-regional relationship that address the green and energy transitions. 

The most recent include the Ibero-American Environmental Charter, approved at the Ibero-American Summit in Santo Domingo, in March 2023, and the New Agenda for Relations between the EU and Latin America and the Caribbean, the joint communication of the European Commission and the High Representative for Foreign Policy addressing the Parliament and the European Council on June 7. The coming EU-CELAC Summit will follow the framework of the Spanish Presidency of the Council of the EU, as reflected by the words of Ursula Von der Leyen. 

She stated that, “the strategic partnership between the EU and LAC is now more important than ever. We are key partners in enhancing the rules-based international order and jointly defending democracy, human rights, and international peace and security. Our aim is also to strengthen political cooperation and dialogue, fighting climate change and driving an inclusive and human-centered digital transformation. Our Global Gateway World program will also drive investment and closer cooperation.”

There is significant emphasis placed on the Global Gateway, the infrastructure investment support program that seeks to compete, one way or another, with the Chinese Belt and Road Initiative (known as the new Silk Road). While the Global Gateway has considerably less funds, it represents a European commitment for cooperation. This commitment faces the added complexity of finding the necessary financial instruments, however political will could, and should, take precedence over technical or financial issues.

The relaunch of relations between the two regions provides an excellent testing ground in the ecological and energy transitions. This could help reach an understanding that allows for intentions to be transformed into reality, as equal partners committed to the future of society and the planet. This is an opportunity that we cannot afford to miss.

Cristina Manzano
Director of esglobal and IE Insights
Graduated in Information Sciences with a major in Journalism from the Complutense University of Madrid, she has postgraduate studies at the University of Maryland. Her experience includes various roles in journalism, in particular as a columnist for El País and El Periódico de Catalunya, and as a regular commentator on Radio Nacional de España (RNE). She is a regular speaker on topics related to international affairs. He is also a member of the Scientific Council of Elcano Royal Institute, CIDOB and the European Council on Foreign Relations (ECFR).

We want to collaborate with you

Do you have a challenge?

Would you like to join our team?

Do you want us to speak at your next event?