Innovative Approaches to Climate Change in Latin America
2020 was supposed to be a critical year for climate change. With five years having passed since the signing of the Paris Agreement, stakeholders were due to implement robust policies to further tackle climate change. However, COVID-19 complicated those plans. Nevertheless, the intention of tackling climate change remains, which led to Irina Bokova asking the panelists: How can governments, specifically Latin American governments, invest in low-carbon energy, transport, water, telecommunications, and infrastructure following the steps of the European Green Deal as well as initiatives from Japan, Korea, and China?
According to former President Felipe Calderón Hinojosa, for this kind of investment to occur there must be the right infrastructure in place in which both the private and public sectors can invest. There should be an investment environment in which 60% of green investments are made in the poorest countries of South America, and price distortion must be stopped—to do this, governments around the world must incentivize the use of alternative sources of energy. As highlighted by President Calderón, there is a lot of money waiting to be invested in green energy, but there is a lack of technically sound projects in which to invest. To complicate matters further, the interest rates for investment are so high that even with the right long-term project, investments become nearly impossible. To overcome this, governments and the private sector must collaborate to invest in research & development for a green economy.
“Our house is burning, and it’s the responsibility of everyone in the house to come out and stop it […] the human being today is the most endangered species on the planet,” Muhammed Yunus
Delivering an urgent plea, Muhammad Yunus stressed that it’s everyone’s responsibility to help stop the burning of the Earth. Fighting the climate crisis must be a joint effort adopted by both the public and private sectors, as well as through people’s individual choices, and COVID-19 marks a great moment in history for everyone to re-think their personal investments, purchases, and decisions.
In regards to business innovation, Yunus called for a radical change in our perception of business—a change away from a focus on profit and toward problem solving. President Calderón reiterated the importance of the private sector using greener business models, citing the development of solar panels, which today are a green, economically-competitive option for energy production. Looking at examples of business innovation, the panelists discussed Tesla, which has re-designed transportation and surpassed in value its traditional gasoline competitors, and Santiago de Chile, which has successfully developed a fleet of electric buses through public-private collaboration.
Key takeaways & next steps:
There needs to be an extreme sense of urgency from the public and private sectors, as well as from individuals, to fight climate change.
To successfully establish a sustainable “green economy”, three major things need to be in place: 1) public policy, via government budgets, needs to be redesigned to create economic incentives to pro-climate mitigation industries; 2) these incentives need to be linked directly with innovation and research & design; and, 3) there needs to be a renewed focus on education, which makes sure that industry understands the eco-friendly alternatives that exist.