Latin America Preaches RE, Yet Practises Fossil Fuels

Perpetually in two minds, although the Latin American Governments have appeared to be committing to renewable targets, yet their actions are just the opposite.

According to the  International Energy Agency (IEA) that it will need US$1 trillion per year between now and 2050 to finance energy transition in Latin America, compared to the $150 billion made available for clean energy investment in 2020.

Although endowed with almost everything needed to make a transition to renewables, ambitious targets, huge solar and wind potential and growing local industries, Latin America keeps squandering every right step forward by adding to the fossil fuel projects. The region has, for example, abundant reserves of strategic minerals, such as lithium, needed to produce batteries and renewable energy equipment, as well as outstanding potential in solar and wind energy, and green hydrogen production.

Yet, Latin America’s energy sector is responsible for nearly half of the region’s greenhouse gas emissions, with around 25% of these coming from electricity generation using fossil fuels, such as coal, oil and gas. Transport also accounts for a significant share of these energy-related emissions. Governments in the region have committed to reduce these emissions under the Paris Agreement on climate change. In fact, 15 countries have already signed up to the target of reaching at least a 70% share of renewable energy in their energy mix by 2030 under the Renewables in Latin America and the Caribbean (RELAC) initiative.

But the ground situation remains grim, thanks to the financial crisis that most countries seem to wade in and out of. 91 renewable energy projects now face an uncertain future in Argentina amid the country’s economic crisis, and in Mexico, where the oil and gas sector dominates discourse. Therefore, Insufficient finance is a convenient alibi and poor excuse to cover up the atrocious missteps as elaborated by Leonardo Stanley, a researcher at Argentina’s Centre for the Study of State and Society (CEDES), saying, “It’s a political problem, not an economic one. Looking at the costs, it is more rational to invest in renewables than in fossil fuels. But the decision on which sectors the money goes to is political, based on the lobbying of the oil companies.” Achieving that goal will require a prominent role for the private sector, which is projected to drive more than 70% of clean energy investments, according to the IEA.