CLIMATE CHANGE IN PERUVIAN PERSPECTIVE

1. CLIMATE CHANGE IN PERUVIAN PERSPECTIVE Renzo Mendoza Castro

2. This is PERU…

3. …and so is THIS

4. Background notes • Population : 27 926 000 (July 2005) • Third largest country in South America • IPPC: One of the most vulnerable to climate change • Biodiversity hot spot (Amazon Basin) • Abundant natural resources • Climate variability • Seasonal Agriculture • Poor. Its economy is growing with increasing inequality

5. Understanding Peruvian Climate • Three geographical regions: Coast, Highlands, and Jungle. • Different altitudes and various sea currents affect climate creating ecological stages • El Niño phenomenon: • Warm equatorial sea current disrupts climate patterns: heavy rains in the coast and drought in the highlands. • 1983 : 30% drop in primary sectors

6. Economic and Political Background Economic Instability • Terrorism during the 80s • Structural Adjustment / Liberalization during the 90s: • Elimination of subsidies to fossil fuels • Privatization of power generation and distribution • Promotion of natural gas use • Deregulation of Public Ground transportation services and import of used vehicles • Quasi-dictatorship of Fujimori

7. GDP : Good News at the Macro-level Source: Peruvian Reserve Central Bank • 2005 GDP (PPP) : 168.9 billion • 5.6% growth

8. …Not Felt at a Micro-level • Widespread unemployment • 54% population under poverty line in 2003 • Rural exodus. Urban population increased from 35% to 70 % from 1940 to 1993 • Economic growth corresponds to an increase in Inequality

9. Primary sectors Dominated by the Service Sector • Services (including commerce): 65% • Industry : 27 % • Agriculture : 8%

10. Energy Mix • Nuclear 0 % • Hydroelectric 9.4 % • Other Renewable 33.1% • Biomass : 33.1% • Wind : Negligible • Fossil Fuels 56% • Coal : 3% • Oil : 45% • Nat. Gas : 5% Source : WRI

11. GHG Emissions Profile • CO2 is the largest GHG • Fuel Combustion and change of land use and forestry are major sources • Methane is also prominent • Agriculture is major source *Source : CONAM. First GHG inventory

12. GHG Emission in comparison *Per capita energy consumption is also low in South American standards Source : CONAM

13. Climate Change Institutional Framework Three Main Institutions: • National Environmental Council - CONAM (1995) • The Environmental Authority in Peru • Rules National Environmental Policies • Focal Point of UNFCCC and the Designated National Authority (DNA) for CDM • Environmental Fund Peru - FONAM (1997) • Non-profit institution of public and social interest • Aims to promote private investment on environmental projects as well as to identify the sources of financing • The National Commission on Climate Change • Presided by the CONAM • Public and private institutional members • In charge of the application of the UNFCCC and the Kyoto Agreements • Designs the National Strategy on Climate Change

14. Environmental Legislation • Environment and Natural Resources Code (1991) • Preventive policies for environmental protection • Law for Environmental Impact Assessment (2002) • Air Quality Standards Code (2002) • General Environmental Law (2005) • Sets National Environmental Policy and Management • Ties together all previous legislation

15. Vulnerability As indicated by CONAM and IPCC’s Working Group II: • Biodiversity • Glaciers • Coastal and Marine Ecosystems • Public Health • Seasonal Agriculture • Extreme events

16. National Strategy on Climate Change (NSCC) • Incorporating Climate Change into development process • Reduce impacts of CC through integrated assessments of vulnerability and adaptation in specific sectors • Identifying gaps • Gaps prioritization • Design and execute PROCLIM

17. PROCLIM • “To strengthen national capabilities for effective performance of the resources in prioritized geographic areas.”

18. Inventories Mitigation and CDM in Peru • 7 institutions working in 2000 GHG inventory • Design of a system for continuous update • CDM implementation • DNA already in place • Specialized institution for promotion • 3 projects approved and 4 in process • Project Portfolio in place : 30 MM tons of reduction in 10 years

19. Supranational Agreements • UNFCCC: • Ratified in 1993 • Kyoto Protocol: • Ratified in 2002 as a non-Annex I country

20. Analysis of Position • Third Image: • Signatory of the Amazon Cooperation Treaty of 1978 • Influence of Brazil : ‘common but differentiated’ responsibilities • Second Image: • High vulnerability: • Climate sensitive economy • High cost of cutting emissions • CDM provides: • Managing emission costs • Poverty alleviation • Technology transfer • Benefits for local air quality • Decentralization efforts at the base of the National Strategy on Climate Change

21. The future • Remains extremely vulnerable to adverse impacts of Climate Change • Permanence within Kyoto would ensure further reductions through CDM • Unlikely to relinquish the economic benefits from Kyoto: • Peru has already designed an institutional strategy to promote projects eligible for CDM • Peru wants investment and technology transfer • For investors: studies show that Peru still offers numerous areas of high marginal reductions per investment. • Not likely to enter Annex-1 for the post-2012 period • Peru will push for the prevalence of no reductions commitments for developing nations • Camisea Project will ensure further emissions reductions from the switch to natural gas • Could engage in voluntary reductions in an effort to appease those who argue for stricter commitments for developing nations