G20: energy lessons from developing economies

 By Chris Dalby

Argentina has had a rocky time in recent years…

A great depression from 1998 to 2002 shattered the value of its peso. Successive governments took on heavy foreign debts, which soon became mired in bitter disputes, leading foreign investment to tank. However, the transformation of Argentina’s reputation on the world stage in the last two years has been remarkable. Buenos Aires has made laudable progress, recovering its international credit status, seeing foreign investment soar and becoming a regional leader in renewable energy.
A coronation of its journey came when it secured the rotating presidency of the G20 in 2018, an organization it was almost expelled from in 2013. Ahead of the G20 Summit in November, President Mauricio Macri has placed a major emphasis on energy transition through renewables.
This is all the more important because climate change has threatened to shatter Argentina’s economic recovery. The province of Cordoba, one of the country’s breadbaskets, has seen fields of soybeans, corn and wheat washed out by repeated flooding. This has similarly affected the plains of Pampas, where cattle has grazed for centuries. For Argentina, reducing pollution and mitigating climate is not just a necessity, it’s a matter of survival. Luckily, the G20 has granted the ideal platform to make itself heard.

President Mauricio Macri at G20 event (Brookings Institute)

What can Argentina achieve at G20?

In February, the country hosted the first ever G20 Energy Transitions Working Group. However, Macri did not aim for some pie-in-the-sky forum, promising vague recommendations, instead focusing on specifics.
“Energy transitions, one of the major challenges affecting the entire world, brings us together today,” said the President, as he opened the event in Buenos Aires. “Sustainable development is one of the priorities in the G20 agenda, and energy has a central role as a fundamental condition for growth,” he stated.
This is not just empty rhetoric. In 2017 alone, Buenos Aires awarded 147 renewable energy projects in 18 provinces, as part of a broad effort to produce 20 percent of the country’s energy from renewables by 2025.
At the G20 forum, Argentina’s minister of energy and mining, Juan José Aranguren, said that “we are in a transition to cleaner energy systems, a transition that is different for different countries. All recognize that renewable energies and energy efficiency are central for a cleaner energy matrix.”
Certainly, Argentina’s ideal energy matrix is one that is difficult to replicate. A recent World Bank round of financing seeded investments among wind, solar, small hydro and biogas projects.
However, a large-scale development in Argentina’s energy portfolio consists of two vast hydropower dams in its southern region, and making Buenos Aires’ public transport grid fully renewable. Being built in the southernmost province of Santa Cruz, the dams are being engineered by Chinese firm Gezhouba.

Site of the proposed dams in Santa Cruz (Michael Gaige,

Bearing the names of ex-president Nestor Kirchner and former Santa Cruz governor Jorge Cepernic, once finished, they will provide around 5 percent of Argentina’s total energy demand. Colossal in scale, they will produce an average of 5,171 gigawatt-hours of energy.
Despite their emblematic nature, even here, the government showed it wanted to do things by the book. After taking office, Macri shelved any further progress on the dams until their cost and environmental impact had been thoroughly verified. The final go-ahead was secured in late 2017. The Chinese influence over the dams has worried some, including in the G20. Besides Gezhouba designing them, the China Development Bank has loaned Buenos Aires $4.7 billion U.S. dollars to finance their construction.
China’s impact on Argentina’s energy policy has not stopped there, with Macri praising the country for the focus it placed on renewable energy development during its own G20 presidency in 2016.

G20 becomes forum for all

While the G20 represents 85 percent of global GDP, it has been criticized for being an elitist forum, where wealthier countries discuss their own problems among themselves. Yet, for populations all around the world, renewable energy solutions are not a luxury but a necessity.
China’s presidency of the G20 was notable, therefore, for the light it shone on the issues affecting developing countries. This ranged from how climate change inordinately affects island nations and how these same nations find it much more difficult to access new technologies that can help mitigate this impact.
The G20 members will look to see Argentina provide examples of how renewable energy solutions must ease the lives of residents in smog-choked transportation from Shanghai to Sao Paulo or how locally connected solar and wind grids can cleanly power remote communities.
Even more specifically, as a Latin American country, Argentina can promote the experiences of its indigenous communities in fighting climate change and how renewable energy solutions are helping them cope.
Discussions in February revolved around ensuring affordable access to clean energy in Latin America and the Caribbean, stopping inefficient fuel subsidies, transparent access to information and digitalizing energy markets.
If these recommendations are taken, it would amount to somewhat of a revolution for a G20, which has been accused of focusing on issues concerning developed economies, and leaving others behind.

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Argentina will host a second G20 meeting on renewable energy in June, where ideas have to be turned into formal proposals ahead of the official forum at the end of the year. This will be a test as to whether the G20 can unite to favor the concerns of some of its newer members.
Holding the G20 presidency is one way for Argentina to leave behind a fractious political and economic past. By continuing a focus on renewable energy, Argentina may help cement its place as a progressive leader of South America.

READ MORE: Energy revolution for Latin America By Nicholas Newman

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.