Chapter 1. Background and key environmental trends

This chapter provides an overview of Peru’s main achievements and remaining challenges on the path towards green growth and sustainable development. Drawing on indicators from national and international sources, it assesses the state of the environment and natural resources and key environmental trends, focusing on the period since 2003.

  

1. Introduction

This chapter presents some of the environmental trends observed in Peru between the years 2003 and 2013, the period analysed in this assessment. It also highlights the main achievements and remaining challenges on the road to green growth and sustainable development. This chapter is based on indicators from national and international sources, and takes as its point of reference the OECD Green Growth Strategy (OECD, 2011). After a brief description of Peru’s physical features and its socioeconomic context, the chapter outlines the principal environmental tendencies and, in particular, the progress that has been made in the efficient use of energy and natural resources and in enhancing environmental quality. This chapter is intended to establish a baseline for the subsequent chapters, which will evaluate whether the application of environmental policies in Peru has succeeded in influencing these trends, and whether their objectives have served to create economic opportunities. It also presents the main conclusions and recommendations, and sets them in context.

While Peru’s economy is the seventh largest in the region, in recent years it has demonstrated a dynamism that has made it the region’s second fastest-growing economy over the years 2003-2013. The main engines driving this growth are the combination of domestic macroeconomic policies and favourable external conditions linked primarily to rising commodity prices.

The socioeconomic progress of recent decades has been reflected both in per capita incomes, which have risen by more than 60%, and in the poverty rate, which fell from 52% to 24% in 2013.1 Yet the country still faces a great challenge in terms of various dimensions of well-being, which betray persistent inequality and widespread labour informality. Moreover, the growing middle class is placing new pressures on public services such as education, health and transport (OECD, 2015).

Peru’s environmental performance must be analysed from the viewpoint of a middle-income country that is experiencing significant economic growth based on the exploitation of renewable and non-renewable natural resources such as fisheries, metal mining and hydrocarbons. Along with its great wealth of mineral deposits, the country has abundant water resources (although distribution is uneven) and a broad and rich biodiversity that places it among the world’s leading mega-diverse countries. It has the second largest forested area in Latin America, abounds in ecosystems, species and genetic resources and has a rich cultural heritage.

Over the last decade the country’s environmental institutions have been strengthened through the adoption of the General Environment Act of 2005 and subsequent creation of the Ministry of the Environment (MINAM), the Peruvian National Protected Areas Service (SERNANP) and the Agency for Environmental Assessment and Enforcement (OEFA) in 2008. Also to be noted is the establishment of the National Service of Environmental Certification for Sustainable Investments (SENACE) in 2012.

Box 1.1. Peru: physical, economic and social context

Physical context

Peru has the third largest land area among South American countries, covering 1 285 215.6 km² in the western part of the region and to the south of Ecuador. It has 7 062 km of land boundaries, including those to the north with Colombia and Ecuador (1 494 km and 1 529 km respectively), to the east with Brazil (2 659 km), to the south-east with Plurinational State of Bolivia (1 212 km) and to the south with Chile (168 km). To the west lies the Pacific Ocean, with a coastline of 2 414 km. The country is exposed to various risks associated with natural phenomena such as earthquakes, tsunamis, flash flooding, landslides and volcanic activity.

The country’s relief is highly varied, with zones of difficult accessibility. The three main geographical regions are: (i) the coastal region, covering 12% of the territory, characterised by extensive plains with dry and sandy soils; (ii) the Sierra, covering 28% of the territory, which has a sharply accentuated and varied relief dominated by the Cordillera of the Andes, where the highest point of elevation is the Nevado Huascaran (6 768 metres above sea level); and (iii) to the east, the Amazon Selva or forest zone, which covers 60% of the national territory, divided into the Selva Alta (High Forest) and the Llano Amazónico (Amazon Lowlands), and is characterised by its slopes and plains.

There are three major watersheds or hydrographic regions: the Pacific, the Amazon, and the endorheic or closed basin of Lake Titicaca. These regions embrace 159 hydrographic basins (lakes, lagoons, rivers and swamps). The Amazon watershed contains around 98% of the available surface water. The rivers of the coastal region are characterised by their steep slope and short length, their heavy transport of sediments and their irregular discharges. The rivers of the Sierra are located in narrow valleys, with heavy erosion in the basins and with the potential for hydrological development, while the rivers of the Selva are wide and mighty, with little incline and with long and winding courses. The longest rivers are the Camaná (375 km) and the Chira (334 km), while those with the greatest flow are the Santa (177 m³ per second) and the Tumbes (123 m³ per second).

Peru has tropical and subtropical climates, and microclimates influenced by the presence of the Humboldt Current, the Cordillera of the Andes and the Amazon River. The prevailing climate of the coastal zone is arid. The Sierra presents a varied climate, due to its different levels of elevation, with low temperatures frequent in the heights of the Andes. The climate in the Amazon basin is hot and humid with abundant rainfall.

The country has numerous ecosystems that are distributed across the length and breadth of the land. The main continental ecosystems are the tropical forests, the dry forests and the fragile ecosystems. This variety has produced conditions whereby Peru is considered one of the 17 mega-diverse countries. At least 20 375 species of flora have been counted, along with 523 mammals, 147 birds, 446 reptiles and 1 070 marine fish. The country also contains 84 of the planet’s 117 life zones.

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The economy

The Peruvian economy is the seventh biggest in Latin America and the Caribbean, and its great dynamism makes it the second fastest-growing in the region. GDP rose at an annual pace of 6.4% between 2003 and 2013, above the average for the OECD and for Latin America and the Caribbean. Per capita GDP rose on average by 5% over the same period per capita income was, on average, one quarter of the OECD level for the period 2003-2013. The income gap has diminished, thanks to higher labour productivity and higher employability rates for a growing workforce (World Bank, 2011).

Peru’s growth has been steady, with a slight slowing in the year 2009 due to the global economic crisis. During the period of analysis GDP nearly doubled. GDP growth for 2015 is estimated at 3.6%, driven primarily by the mining industry (ECLAC, 2015a).

The manufacturing share of GDP rose from 33% in 2003 to 37% in 2012, above the OECD average of 24%. The share of services in GDP is 56%, and agriculture represents 7%. The agriculture sector accounted for 25.5% of the economically active population in Peru in 2013 (ECLAC, 2013).

One of the biggest contributors to the economy is the oil and mining sector, which accounted for 12.1% of GDP in 2013. More specifically, crude oil and gas extraction and related services contributed 2.7%, and mining and related services 9.4% (INEI online statistics).

Trade in goods and service rose from 37% to 49% of GDP, and while it remains below the OECD average it has reached proportions similar to the average for Latin America and the Caribbean. Peru’s most important trading partners are the United States and China. The principal export products are copper and gold, which together represent 40% of the value of Peruvian exports. The main imports relate to commodities and intermediate goods such as fuels, lubricants and pharmaceutical chemicals. Imports of capital goods such as industrial machinery are also significant.

Total investment averaged 22% of GDP over the period under analysis. Private investment is very high and represents 17% of GDP (World Bank, n/d).

Between 2003 and 2013 net foreign direct investment flows to Peru rose by 619%, and Peru is currently the fourth largest recipient of FDI in Latin America and the Caribbean.

Peru’s total external debt declined considerably during the period, from 50.4% of GDP in 2003 to 30.3% in 2013.

Total public debt, external and domestic, dropped from 48.7% of GDP to 19.6% over the period 2003-2013. The main component of this debt at the beginning of the twenty-first century was with the external sector (38.4% of GDP). However, this amount has shrunk to 8.8% of GDP.

Central government current revenue rose gradually between 2003 and 2013, from 15.4% of GDP to 18.9% of GDP, while total expenditure remained relatively stable, recording a slight increase from 17.3% of GDP to 18.6% of GDP.

At the municipal level, revenues and expenditures have risen sharply, by 86% and 105% respectively. In the last year municipal revenues reached 4.3% of GDP and non-financial expenditures 4.5% of GDP.

Revenues from “green taxation” are dominated by the excise tax on fuels, which in 2012 produced 2.6% of central government revenues. Public spending on the environment reached 0.4% of GDP in that year.

Society

The 2013 population of Peru is estimated at 30.5 million (INEI online statistics). According to the 2007 population census some 25% of the population is indigenous, concentrated primarily in the Sierra zone. Population density is low: in 2013 there were 24 persons per square kilometre. This figure is below the averages for the OECD and for Latin America and the Caribbean.

The population is relatively young: around 56% is under 30 years of age. However, the population is expected to grow at steadily slower rates while life expectancy will increase, pointing to a gradually ageing population.

The majority of the population lives in the coastal zone, with more than 31% in the Department of Lima. Over 75% of the population lives in urban areas, and this proportion is expected to increase over time.

The unemployment rate is below the OECD average (around 8%), and has fallen over the last decade from 10% in 2003 to 4% in 2013. Informal non-farm employment has also declined, dropping from 75.2% of the economically active population in 2004 to 68.6% in 2012, thanks to economic growth and institutional factors (ILO, 2014).

With a Gini index of 0.44 for the year 2012, inequality in Peru is greater than that in most OECD countries (with the exceptions of Chile and Mexico), but less than in the majority of Latin American countries. The highest income decile receives around 34% of all income generated in the country, while the share of the poorest decile is only 1.4%.

Latin America (17 countries): income inequality, 2002 and 2013
(Gini index)
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Source: J.P. Jiménez, J.P. (ed.), "Desigualdad, concentración del ingreso y tributación sobre las altas rentas en AméricaLatina", ECLAC Books, No. 134 (LC/G.2638-P), ECLAC.

The percentage of the population living below the national poverty line has declined significantly from 52.5% in 2003 to 23.9% in 2013. At the present time, rural poverty stands at 48% and urban poverty at 16%.

Life expectancy at birth is 74.8 years, below the OECD average (80 years) but similar to the average for Latin America and the Caribbean.

Expenditure on health rose slightly from 4.7% to 5.3% of GDP over the period 2003-2013. This percentage is less than half the average figure for the OECD, which is 12.3% of GDP, and it is below the average for Latin America and the Caribbean (7.7% of GDP).

Although the infant mortality rate remains high in comparison with OECD countries, it has dropped considerably over the period, from 24.1 to 14.2 deaths per thousand live births. There is a wide geographical variation in this indicator: for example, in 2011 the figure was 9 in the department of Tacna, while in Puno it was 40.

Chronic malnutrition among children under 5 years of age has been declining steadily, from 28.5% in 2007 to 17.5% in 2013. In that latter year, the rural rate was 32.3% and the urban rate was 10.3%.

Spending on education falls short of the OECD average, and remains at around 3% of GDP and 15% of government spending.

As to the quality of education, the census evaluation of 2013 conducted by the Ministry of Education shows that 16.8% of grade 2 pupils in primary school performed adequately in mathematics, and 33% in reading comprehension. In the latest (2012) testing under the Programme for International Student Assessment (PISA) of the OECD, Peru ranked last among the 66 countries participating.

The illiteracy rate among the population aged 15 years and over declined from 10.5% to 6.2% over the period 2003-2013. However, there are still discrepancies between zones: the rural rate is 15.8% and the urban rate is 3.5%.

Source: ECLAC on the basis of World Bank (2011); ECLAC, Economic Survey of Latin America and the Caribbean, 2015 (LC/G.2645-P), Santiago, 2015; Statistical Yearbook for Latin America and the Caribbean, 2013 (LC/G.2582-P), Santiago, December, 2013; CEPALSTAT database; National Institute of Statistics and Informatics (INEI), “Estadisticas” [online] https://www.inei.gob.pe/; World Bank, World Development Indicators (WDI) [online] http://databank.worldbank.org/; and ILO (2014).

The significant economic growth of recent decades, however, has imposed various pressures on the environment, and these have been exacerbated by the degree of informality in the economy and by certain illicit activities (such as illegal mining and logging) which have made it difficult to increase the degree of environmental monitoring and control in areas remote from urban centres.

Energy production has evolved in line with economic growth. A comparison with OECD countries shows that the total primary energy supply per capita is low, and an analysis of energy intensity per unit of output suggests room for efficiency gains. The energy mix has shifted substantially over the last decade, due to the sharp increase in natural gas production. The renewable energy component of the mix is greater than that for the OECD, and the share of biofuels and solar energy together amounts to 9% of domestic supply. The transport sector accounts for the largest share of energy consumption and of emissions from combustion, and it has been growing apace with GDP.

While the country’s contribution to global emissions of greenhouse gases is low, nationwide emissions caused by deforestation and changes in land use are significant. In recent years, carbon emissions per capita have risen slightly, but they remain below the OECD average, and emissions per unit of GDP have remained stable.

Aggregate estimates for the country show increases in emissions of particulate matter and nitrogen oxides, together with a slight reduction in emissions of sulphur dioxide. Air quality measurements in Lima-Callao point to a decrease in concentrations of polluting materials, explained primarily by the improved quality of fuels, something that also seems to be happening in other densely populated cities of the country. Sources of pressure on air quality include the growing size of the automotive fleet, the use of fossil fuels, and certain other large-scale productive activities.

Figure 1.1. Peru: GDP performance, 2003-2013
(Index: 2003=100)
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Note: Index of relative change based on GDP valued in international dollars at constant 2011 prices at purchasing power parity.

Source: ECLAC calculations on the basis of World Bank, International Comparison Program.

The Atlantic (or Amazonian) watershed has an abundant availability of water, in contrast to the Pacific slope, which has a water shortage and which moreover contains a high percentage of the population. Over the last decade, the national water supply has remained steady, thanks to the increased extraction of water from subterranean sources. The heaviest demand for water consumption comes from agriculture, followed by the demand for drinking water. In terms of non-consumption uses, the energy sector is especially important. The proportion of the population using improved drinking water sources is estimated at 86%, and the proportion of those using improved sanitation facilities at 75%. These percentages are sharply lower in rural areas: water access coverage in many zones is only partial and water is delivered for only a few hours a day.

Although the last decade has seen significant progress in water monitoring, quality and treatment, there is still much room for improvement. As a result of various public policies and evolving environmental pressures, some types of illnesses have declined over time, such as acute respiratory diseases and acute diarrhoea in children. Nevertheless, the prevalence of diarrhoea among the population remains high. Isolated cases of heavy metal poisoning have also been reported.

The available data suggest an increase in the productivity of domestic material consumption per unit of output. In Peru, per capita waste production is lower than the average for the OECD: there are 11 sanitary landfills for the treatment and final disposal of solid waste, and nearly half of municipalities have developed comprehensive plans for the environmental management of solid waste.

Climatic conditions allow the cultivation of numerous and varied crops. Agricultural production for export is concentrated in the coastal zone and, despite the scarce availability of water, the zone is home to plantings of cotton, coffee, mangoes, lemons, asparagus, grapes, avocados and oranges, among other crops. The Sierra region is characterised by dry-land farming, where the typical crops are cereals, vegetables, garden produce and tubers. Agriculture in the Selva is dominated by plantations of coffee, cocoa, palms, fruits and timber-yielding species. The use of nitrogen- and phosphate-based fertilisers per hectare of arable land has risen apace with the volume of agricultural output. For the year 2012, this indicator is below that for the OECD and below the average for Latin America and the Caribbean.

The land area covered by forests amounts to more than half of the national territory, and is located for the most part in Amazonia. The greatest part of the forest is of the tropical type (54% of land area), followed by dry forest (3%) and Andean forest (0.2%). Peru has the second largest expanse of Amazonian forest, and the services provided by its ecosystems are of great economic, social and cultural importance. During the years 2003-2012, the land area covered by forest declined by just under 2%: the Amazonian region was most affected by the process of deforestation, reflecting the conversion of land to farming and livestock uses by small-scale producers. Clearing of the country’s humid Amazonian forest exceeds 113 000 ha per year, and has occurred primarily in unclassified forests where there is no system of administration or protection.

Peru’s marine resources are diverse, and there are many species of fish, molluscs, crustaceans and algae to be found all along the coast. The high productivity of the country’s marine resources can be attributed to the Humboldt Current, which increases and distributes nutrients and food for fish and invertebrates. Peru has the world’s largest fishery based on a single species, the anchovy, and it is one of the biggest producers in terms of catch, although this has been declining over the last decade. Among the greatest pressures on the marine ecosystem are the growing percentage of industries and of population along the coast, the introduction of exotic species, by-catch, and illegal fishing.

The country has abundant non-renewable resources that are an important source of foreign exchange. Exploitation of crude petroleum and natural gas reserves has given the country energy self-sufficiency. Domestic demand for oil and its derivatives is not fully covered by domestic production, and around 60% of oil processed in the country is imported. However, domestic output of natural gas has risen sharply over the last decade, bringing about important changes in the composition of the energy mix which has shifted from petroleum-intensive to a natural gas base. Peru also has large reserves of metallic ores, and is among the leading world producers of copper, gold, zinc, silver, lead and tin. Mining output has been growing steadily over time, and in 2013 mineral exports represented 61% (USD 25.5 billion) of the country’s total exports.

2. Progress towards sustainable development: moving towards a low-carbon economy and energy and resource efficiency

2.1. Carbon and energy intensities

Greenhouse gas emissions

According to figures from the World Resources Institute (WRI), total emissions of greenhouse gases (including changes in land use) in Peru amounted to 0.34% of global emissions, and 3.5% of emissions in Latin America and the Caribbean. If changes in land use and deforestation processes are excluded, greenhouse gas emissions would be in the order of 0.2% of worldwide emissions, and 2.5% of the region’s emissions. During 2012, emissions from changes in land use and deforestation represented 46% of total greenhouse gas emissions in Peru, and over the period 2003-2012 these rose by 60%.

Figure 1.2. Peru: emissions of carbon dioxide equivalent (CO2-eq) and decoupling GDP growth from emissions, 2003-2013
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Note: LULUCF refers to emissions from the land use, land-use change and forestry sector.

Source: ECLAC calculations on the basis of Carbon Dioxide Information Analysis Center (CDIAC) and World Resources Institute (WRI), CAIT Climate Data Explorer, 2015 [online] http://cait.wri.org.

The International Energy Agency (IEA) reports that in 2012 Peru’s CO2 emissions from fossil fuel combustion—without including those from land use change—represented 0.14% of worldwide emissions, and they have increased by 82% since 2003.

A sector breakdown of emissions from fossil fuel consumption reveals that 39% derive from transportation, and 25% from electricity and heat generation. These proportions differ from the OECD average, where 28% of emissions are associated with transportation and 40% with power and heat generation (IEA/OECD, 2014). The lower proportion of emissions from electricity and heat generation reflects the fact that Peru’s energy mix consists to a high degree of natural gas and hydropower.

The IEA also reports that, between 2003 and 2012, Peru’s per capita emissions of CO2 increased by 65%, while emissions per unit of GDP remained stable. The intensity of emissions in 2012 was 1.53 tonnes of CO2 per capita, which is 16% of the average per capita intensity in the OECD. Currently, 0.15 tonnes of CO2 is being emitted for every USD 1 000 of GDP (in terms of 2005 purchasing power parity), well below the average for the OECD (0.31 tonnes) and for Latin America and the Caribbean (0.23 tonnes).

The ratio between CO2 emissions and primary energy supply has been declining over time. Over the period 2003-2013 this indicator fell by 1.6%, in line with the OECD trend, which dropped by 3.5%. Nevertheless, the ratio between CO2 emissions and final energy consumption rose by 14%, while it declined across OECD countries by 3.6%.

Figure 1.3. Peru: energy-related carbon dioxide emissions by sector, 2003-13
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Source: ECLAC calculations on the basis of IEA (2015b).

Total energy production grew by 128% during the period of analysis. At the beginning of this century, a third of the energy was imported, but this tendency reversed itself in recent years, and since 2011 Peru has become a net exporter of energy.

Primary energy production in Peru grew at a rate similar to that of GDP, measured in 2005 prices at purchasing power parity (PPP), and over the period 2003-2013 it recorded cumulative growth of 86%.

Energy intensity measured as the supply of primary energy with respect to real GDP showed no change between 2003 and 2013, and remains at 0.17 tonnes of oil equivalent (toe) per thousand dollars (2005 prices at PPP). This intensity is 31% greater than the average index for OECD countries (0.13 toe per thousand dollars at PPP), demonstrating that there is room for improvement in Peru’s energy efficiency.

Primary energy supply per capita rose by 66% to 0.71 toe per capita in 2013, or 17% of the value recorded for the OECD (4.2 toe per capita).

The sector that consumes the most energy is transportation, with 42% of domestic energy consumption, followed by the manufacturing sector (29%). The sectors that have shown the greatest increase in consumption during the period are services (457%) and transportation (115%).

According to figures from the National Institute of Statistics and Informatics (INEI), Peru’s production of electricity increased by 79% over the period 2003-2012, reaching 41 036 gigawatt hours (GWh). The number of power supply customers stands at 5.83 million, up by 56% over the same period.

The energy mix

The National Energy Balance prepared by the Ministry of Mines and Energy indicates that the domestic primary energy supply doubled in the period 2003-2013. Moreover, the energy mix has shifted significantly, with a growing share for natural gas, which jumped from 10% of domestic supply in 2004 to 57% in 2013 (MINEM, 2013).

Cumulative growth in the domestic supply of natural gas was 998%. This stands in contrast to the 9% fall in the oil supply over the same period, the share of which in domestic primary energy supply was 13% in 2013.

While there has been an increase in the provision of hydropower and coal, their share in the domestic primary energy supply fell to 8% and 3%, respectively, in 2013. Biofuels and solar energy have also lost domestic supply share, and together they now represent 9%.

It should be noted that in 2013 the supply of natural gas, liquefied natural gas and hydropower was domestically sourced. By contrast, 52% of oil and 84% of coal was imported from abroad.

By way of comparison, the IEA shows that the proportion of renewable energy within the total primary energy supply in Peru is 2.6 times greater than that for the OECD, owing primarily to the use of biofuels. At the same time, Peru consumes relatively less coal but relatively more oil and natural gas (including liquefied natural gas).

The sector with the greatest final energy consumption during 2013 was transportation, at 41%, followed by the residential, commercial and public sectors, and manufacturing and mining, both at 27%.

Growth in the transportation sector has tracked fluctuations in GDP, and since 2008 it has been growing continuously.

According to the Ministry of the Environment (MINAM, 2014a), the rate of automobile use has doubled, and the market for cheap used cars has grown. In addition, traffic flow has expanded by an annual average of 7% in the last five years. The number of vehicles per 1 000 inhabitants rose by 42% during the period 2003-2012, from 50 to 71, a figure that is still far below that for OECD countries.

Figure 1.4. Peru: energy intensity and primary energy supply by source, 2003-13
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Note: a) GDP at constant 2005 prices and purchasing power parity.

Source: ECLAC calculations on the basis of IEA.

2.2. Efficiency in the use of inputs and in waste generation

Material productivity

According to a study by the United Nations Environment Programme (UNEP, 2013), Peru’s domestic material consumption (DMC) increased by 37% over the period 2003-2008, and stood at 512 million tonnes in 2008.

The growth rate of domestic material consumption is lower than the rate of real GDP growth (at purchasing power parity and 2005 prices), denoting an increase in material productivity.

Domestic material consumption on a per capita basis in Peru rose by 29% in the period 2003-2008, and in the latter year stood at 17.8 tonnes per capita, slightly lower than the OECD average of 18.1 tonnes per capita. Domestic consumption per capita is in fact 31% higher than the average for Latin America, and 74% above that for the rest of the world (UNEP, 2013).

Metallic ores and industrial minerals constitute the largest component of domestic material consumption, accounting for 37% of DMC in 2008, followed by construction minerals (7%), biomass (7%) and fossil fuels (1%).

In terms of growth by component, over the period 2003-2008, cumulative consumption of construction minerals rose by 93%, followed by fossil fuels (38%), metallic ores and industrial minerals (34%), and biomass (14%).

Waste generation and treatment

According to the Ministry of the Environment (MINAM, 2014b), 664 districts (24.5% of the total) reported data on waste in 2012. This figure represents a major increase from 2011, when 214 districts reported such information.

Based on various official extrapolations, it may be inferred that municipal solid waste in Peru amounted to 6.2 million tonnes in 2012, of which 4.6 million tonnes represented domestic waste and 1.6 million tonnes commercial and other waste, for a rate of 0.583 kg per person per day. A disaggregation by geographical zone reveals that the greatest generation of waste per capita occurs in the Selva (0.599 kg per person per day), followed by the Coast (0.597 kg) and the Sierra (0.527 kg).

Municipal solid wastes in Peru in 2012 consisted primarily of organic material (50.9%), plastics (10.1%) and hazardous waste (8.5%). In 2012, non-municipal solid waste amounted to 11.03 million tonnes nationwide, of which nearly 98% came from the agriculture sector, with smaller proportions from the housing and health sectors.

Hazardous solid waste in 2012 represented 8.5% of total waste reported at the municipal level. Beyond the municipal level, hazardous solid waste consists primarily of contaminated containers (41.4% of the sector’s hazardous waste) in the manufacturing industry; oil residues in the fisheries sector (52.5%); waste contaminated with oil and water mixtures and emulsions in the communications sector (65.7%); oil residues in agriculture (57.4%); septic tank sludge, wastewater and run-off from cleaning equipment in the construction and sanitation sectors (99.7%); and metallic residues (38.05%) in the transportation sector.

The country currently has 11 sanitary landfills for the treatment and final disposal of solid waste. In 2011, 45% of provincial municipalities had developed comprehensive plans for the environmental management of solid waste, and there is a growing trend among municipalities to adopt such plans.

Fertiliser consumption

Over the period 2003-2012, the volume of agricultural output rose by 127%, while the equivalent figure for the livestock sector was 45% (INEI, n/d).

The use of nitrogen- and phosphate-based fertilisers per hectare of arable land rose by 27% over that period (World Bank, n/d).

In comparative terms, the indicator of fertiliser consumption per hectare of arable land stood at 104 kg in 2012. This figure is below that observed in the OECD (122 kg per hectare) and below the average for Latin America and the Caribbean (126 kg per hectare).

3. Improvement in environmental living conditions

3.1. Air quality

Peru has made significant progress in achieving the objectives of the Montreal Protocol, and substances that deplete the ozone layer are being eliminated at a significant and accelerating pace. Over the years 2003-2013, the release of such substances declined from 191 tonnes to 22 tonnes per year (UNEP, 2013).

The main source of pressure on air quality is associated with the growing size of the automotive fleet and the use of fossil fuels. Other sources of pressure identified for various zones of the country are brickworks, mineral extraction and smelting, the fishing industry and power generation (MINAM, 2014a).

Over the years 2003-2012, the automotive fleet grew from 50 to 71 vehicles per 1 000 inhabitants. The departments of Lima-Callao and Tacna stand out in particular, with 135 vehicles per 1 000 inhabitants in 2012 (MINAM, 2014a).

Estimates for the country show that, over the period 2003-2012, particulate matter emissions rose by 14%, reaching 77 500 tonnes. Nitrogen oxide emissions were up as well, by 72% to 114 600 tonnes. By contrast, sulphur dioxide emissions declined by 11%, to 45 700 tonnes (INEI, 2015).

In 2012, sulphur dioxide (SO2) and coarse particulate matter (PM10) emissions were the subject of monitoring exercises in 13 cities of the country, and monitoring was conducted in 15 cities in 2013. Lima and Callao have been systematically measuring various air quality parameters since the beginning of 2000: during the period 2007-2013 there was a decline in concentrations of PM10, fine particulate matter (PM2.5), SO2 and nitrogen dioxide (NO2) (MINAM, 2014a).

Figure 1.5. Peru: average concentration of particulate matter (PM10) in the Lima Metropolitan Area
(micrograms per cubic metre)
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Note: Annual Environmental Quality Standard value of 50 micrograms per cubic metre (ug/m3), established in D.S. Nº 074-2001-PCM. PM10 has been monitored since July 2007.

Source: ECLAC calculations on the basis of National Institute of Statistics and Informatics (INEI).

3.2. Water supply and sanitation

In 2013, the proportion of the population using improved sources of drinking water in Peru was estimated at 86%, up from 81% in 2003. The urban coverage rate was 91%, and in rural areas it was around 67%. The proportion of the population using improved sanitation facilities rose from 66% in 2003 to 75% currently (urban 81% and rural 50%).2

In terms of households with access to basic services, 83.2% had access to water via the public network and 77.8% had access to improved sanitation services in 2013 (INEI, 2013).

Although access to water has increased in Peru, in many cases the service is not continuous. Lack of access to water is primarily a problem in the central and north-eastern regions of the country. The regions with the greatest percentage of dwellings without water access are Huancavelica (59.9%) followed by Pasco (55.2%), Huánuco (52.5%), Amazonas (48.3%) and Loreto (42.4%). Intermittent service for less than six hours a day is frequent in coastal regions, such as Ica, La Libertad and Ancash.

It is important to note that the percentage of unbilled water exceeded 40% in 2008, due primarily to leaks and apparent losses explained by clandestine withdrawals, inactive connections and faulty metering (Rojas-Ortuste, 2010).

The Ministry of Environment (MINAM, 2014a) reports that in 2012, 32% of wastewater was being treated in the country as a whole, up from 21% in 2003. There is still significant room for improvement, as there is as yet no treatment of wastewater in the departments of Amazonas, Apurimac, Huancalevica, Huánuco, Loreto, Madre de Dios, Pasco, San Martín and Ucayali.

Water quality is monitored in 98 of the country’s 159 hydrographic basins. However, more than 40% (41 of 98) of the basins monitored do not meet environmental quality standards (ANA, 2015). The main factors behind the decline in water quality are the lack of wastewater treatment, industrial and mining pollution, and the use of agrochemicals.

Available information shows that over the period 2003-2013 the environmental quality of coastal waters declined to varying degrees, depending on the zone. In particular, high concentrations of pollutants associated with industrial and domestic discharges have been detected in the bays of Huacho, Callao, Chancay and Chimbote, among others. Callao and Chimbote have total and thermotolerant coliform counts in excess of the country’s quality standards.

3.3. Health impacts

During the period 2003-2013, the number of children aged under 5 years suffering from acute diarrhoeal disease dropped from 693 000 to 225 000. The departments that currently have the greatest numbers of affected children are Lima (13% of all cases), Cajamarca (11%), Cusco (8%) and Loreto (8%). In per capita terms, the incidences are highest in the departments of Amazonas, Loreto, Cajamarca, San Martín and Cusco (INEI, 2015).

There is still a persistent risk of contracting acute diarrhoeal diseases among the school-age population: in 2013, 13.7% of urban education institutions and 56.1% of rural schools were not connected to the public drinking water network (Ministry of Education, 2013).

The number of children aged under 5 years being treated for acute respiratory infections declined by 32% over the period of analysis, from 3.5 million to 2.4 million (INEI, 2015).

Available information shows that acute respiratory diseases in Lima and Callao declined during the years 2008-2012 from 142 to 102 cases for every 10 000 inhabitants, reflecting the reduction in the concentrations of particulate matter measuring less than 10 micrograms (µm). Nevertheless, there are episodes that exceed the environmental quality standards for PM10 and PM2.5 (MINAM, 2014a).

During 2012, there were 1 252 cases of heavy-metal poisoning identified, the majority of them in the departments of Junin and Pasco. Such cases are associated for the most part with lead and its compounds (MINAM, 2014a).

Emissions and releases of mercury from artisanal and small-scale mining are a matter of great national concern.

Because of its geographical characteristics, Peru is particularly vulnerable to climate change and to the risk of natural disasters. According to information from the International Disaster Database (EM-DAT), the extreme natural events and disasters that have had the greatest impact on the Peruvian population are those associated with earthquakes, flash flooding and extreme temperatures. During the years 2003-2013, at least seven major earthquakes were recorded, affecting a total of more than 675 000 people. In climatological terms, more than 2.3 million people were affected by flooding (18 events) and nearly 5.2 million by extreme temperatures (9 events).

Among other natural phenomena there has been an increase in frost emergencies, which rose from 73 in 2003 to 413 in 2013 (INEI, 2015). The population affected by this phenomenon varied from 25 708 in 2003 to 280 930 in 2013. The people hit hardest were those living in the high Andes.

4. Use of the natural resources base

4.1. Biodiversity and ecosystems

Peru is ranked among the 17 mega-diverse countries. However, pressures on ecosystems are such that the country has 492 species of fauna and 777 species of flora that are listed as threatened, of which 64 and 194, respectively, are in critical danger (MINAM, 2014c). The registry of threatened species of fauna dates from the year 2014 (Supreme Decree 004-2014 of the Ministry of Agriculture), while that for threatened species of flora was initiated in 2006 (Supreme Decree 43-2006-AG).

In 2012, protected land and marine areas represented 18.3% of the national territory, a figure slightly lower than the average for Latin America and the Caribbean (20.8%), but higher than the OECD average (13.6%). The period 2003-2012 saw these areas expand by 82%, a rate higher than that recorded for the region and for OECD countries (World Development Indicators based on United Nations Environment Programme and the World Conservation Monitoring Centre).

A disaggregation by type reveals that protected land areas currently constitute 19.1% of the national territory, while protected marine areas cover only 3.9% of territorial waters, far below the average for the region and for countries of the OECD (World Development Indicators based on United Nations Environment Programme and the World Conservation Monitoring Centre).

The National System of Protected Natural Areas (SINANPE) has experienced steady growth: the number of protected natural areas under national administration rose from 40 in 2003 to 64 in 2015.

Peru has demonstrated its commitment to achieving the Aichi Biodiversity Targets by establishing a correlation between its National Biological Diversity Strategy to 2021 (MINAM, 2014c) and the goals of the Convention on Biological Diversity, which it expects to meet by 2021.

Figure 1.6. Peru: protected areas and threatened species
picture

Source: ECLAC calculations on the basis of the United Nations Environment Programme (UNEP); World Conservation Monitoring Centre (WCMC) and Ministry of the Environment (MINAM), Estrategia Nacional de Diversidad Biológica al 2021. Plan de Acción 2014-2018, Lima, 2014.

4.2. Renewable resources

Water resources

Peru’s water supply amounted to 2 482.3 billion cubic metres (m³) in 2012, placing it among the countries with the greatest water availability (INEI, 2015).

The water supply is distributed unevenly across the country: 98.2% of the volume corresponds to the Atlantic (or Amazonian) watershed, the Pacific watershed contains 1.5% and the Titicaca basin the remaining 0.3% (INEI, 2015). This distribution, together with seasonal variation, produces a high degree of aridity in the southern portion of the Pacific watershed, with moderate stress in the northern Pacific, and an abundance of water in the Atlantic watershed.

Figure 1.7. Peru: water resources
picture

Source: ECLAC calculations on the basis of National Institute of Statistics and Informatics (INEI).

The three watersheds supply both surface water and groundwater. In 2012, more than 22% of the water supply from the Atlantic watershed was derived from underground sources, while the equivalent figures for the Titicaca and Pacific basins were 9% and 8%, respectively.

Over the period 2003-2012, the water supply expanded by 21%, from 2 046 billion m3 to 2 482 billion m3. During this time there was an appreciable increase in the groundwater supply, from 2 739 million m3 to 546 730 million m3.

An analysis of the hydric balance by watershed shows that: (i) the Pacific watershed presents a generalised water deficit, due primarily to the fact that most of the precipitation in the region takes place in the upper part of the catchment area; (ii) the Lake Titicaca watershed shows surface water availability, except during occasional dry years; and (iii) the Atlantic watershed shows a significant water surplus, owing primarily to the level of precipitation. Nevertheless, deforestation in this last zone could cause changes in the water cycle variables (UNESCO, 2006).

Because of the water deficit and the fact that 63% of the country’s population lives in the Pacific watershed, this is the zone that is experiencing the greatest pressures on water availability.

According to information from the Food and Agriculture Organization of the United Nations (FAO, n/d), in 2013 the per capita domestic availability of fresh water amounted to 53 688 m³. This figure far exceeds average water availability in Latin America and the Caribbean (22 615 m³ per capita) and in the OECD (8 286 m³ per capita).

In terms of water use, agriculture is the largest consumer, accounting for 87.7% of the total, followed by demand for human consumption (9.9%), the mining industry (1.5%) and manufacturing (0.9%). For uses other than consumption, the principal demand comes from the energy sector (99.1%) (MINAM, 2014a).

Forest resources

According to a 2009 map of Peru’s vegetation cover, the forested area amounts to 74.2 million hectares. Of this total, 69.9 million hectares corresponds to humid Amazonian forests, 4.1 million hectares to dry forests, and 211 000 hectares to Andean forests (MINAM, 2014a).

According to FAO information, the land covered by forests represented 52.9% of the national territory in 2012. This figure is greater than the averages for Latin America and the Caribbean (46.9%) and the OECD (30.5%) (World Bank, n/d).

During the period 2003-2012, the forested area declined by 1.86%, according to the World Development Indicators (on the basis of FAO data). According to the National Forest Conservation Programme of the Ministry of the Environment, deforestation in the country’s humid Amazonian forest amounted to an annual average of 113 056 hectares between 2000 and 2013.

The Amazonian region is the most affected by deforestation, caused by changes in land use brought about by small-scale farmers in search of larger areas for agriculture and livestock raising. The departments with the greatest cumulative loss of forest cover in the period 2000-2011 were San Martín (277 333 hectares), Loreto (219 671 hectares) and Ucayali (177 630 hectares) (MINAM, 2014a).

The activities that exert the greatest pressure on forest conservation are related to agro-industry, export agriculture, and livestock raising. There is also a significant impact, however, from illicit narcotics cultivation, deforestation due to the lumber industry (both legal and illegal), the opening or improvement of highways and various forms of exploitation of tropical forests (MINAM, 2014a).

The greatest level of deforestation has occurred in forests that do not correspond to any official category, and which therefore have no authority responsible for their administration or care (National Forest Conservation Programme). Unclassified zones in fact accounted for the majority of total cumulative losses of forest cover between 2000 and 2011 (MINAM, 2014a).

Figure 1.8. Peru: forested area and deforestation in the Amazonian zone, 2003-2013
picture

Note: On the basis of the 2007 National Census.

Source: ECLAC calculations on the basis of MINAM (2015).

Fishery resources

The seas off the Peruvian coast are highly productive, thanks to the complex set of currents that give rise to a recirculation system that cools the waters and boosts their nutrient content, thus increasing the availability of food for fish and invertebrates (Tam et al., 2008). However, this ecosystem is subject to major periodic disturbances caused by the El Niño phenomenon.

In 2003, Peru was the world’s third-largest fish producer, accounting for 6.3% of the world catch, after China (17.6%) and Indonesia (6.6%). Its catches have since declined, with a cumulative reduction to 2013 of 3.5%, from 6 061 000 tonnes to 5 849 000 tonnes (FAO online statistics). Peru has the world’s largest fishery based on a single species, the anchovy (FAO, 2007). The anchovy catch has been shrinking, however, leading to reduced exports of fish meal and fish oil. Peru is much less engaged in aquaculture, accounting for only 0.2% of global aquaculture production (FAO online statistics).

The greatest pressures on the coastal marine ecosystem have been identified as stemming from the growing percentage of industry and population concentrated along the Peruvian coast, which leads to over-exploitation of marine resources and changes in the quality and properties of marine and terrestrial waters. The situation is exacerbated by inadequate infrastructure for the unloading and preservation of catches, and a deficient marketing system that tends to pollute marine and coastal surface waters. Other sources of pressure on fishery resources include the introduction of exotic species, as well as by-catch and illegal fishing (undeclared and unregulated), where fishing methods are inappropriate and unsustainable (MINAM, 2014a).

Figure 1.9. Peru: fisheries production, 2003-2013
(Thousands of tonnes)
picture

Source: ECLAC calculations on the basis of Food and Agriculture Organization of the United Nations (FAO).

4.3. Non-renewable resources

Fossil fuels

In 2012, proven reserves of crude oil amounted to 632.9 million barrels, distributed geographically among the Selva (43%), the Costa Norte (37%) and the Zócalo (21%). Liquid natural gas reserves were 789.8 million barrels, and were found almost exclusively in the Selva zone (98%) (INEI online statistics).

Production of liquid hydrocarbons reached 56 million barrels in 2012. There were some significant changes in the composition of production during the period 2003-2012. In 2003, 96% of hydrocarbon output corresponded to crude oil: this share fell to 44% in 2012, owing to the considerable increase in liquid natural gas.

During the period 2003-2012, hydrocarbon output recorded a cumulative increase of 68%, led by the sharp jump in the production of liquid natural gas (which went up by 2 049%), while oil production dropped by 23%.

During the period 2003-2011, the value of hydrocarbon exports rose by 658%, from USD 621 million to USD 4.704 billion. In 2011, exports of oil and derivatives represented 7.4%, and natural gas exports 2.8%, of the country’s total exports by value.

Figure 1.10. Peru: hydrocarbon reserves and production, 2003-2012
picture

Source: ECLAC calculations on the basis of Ministry of Energy and Mines (MINEM), 2015.

Metal mining

Peru has large reserves of numerous metallic ores. In 2011, proven and probable ore reserves included 69 890 000 metric fine tonnes (MFT) of copper; 60 362 000 fine ounces of gold; 24 103 000 MFT of zinc; 2 790 345 000 fine ounces of silver; 7 494 000 MFT of lead; 1 082 423 000 MFT of iron; and 91 000 MFT of tin (INEI online statistics).

In 2013, copper production was nearly 1.4 million MFT; zinc, 1.4 million MFT; gold, 5.0 million fine ounces; silver, 116 million fine ounces; lead, 266 000 MFT; iron, 6.7 million MFT; tin, 24 000 MFT; and the molybdenum, 18 000 MFT (MINEM, 2014).

The volume of metallic ore production over the period 2003-2012 reveals significant cumulative growth for several metals: iron 92%, molybdenum 75%, copper 54%, and silver 19%. By contrast, there were declines in the volume of production of other metals: tin -35%, lead -19%, zinc -7%, and gold -6% (INEI online statistics).

The principal mining regions include Ancash (copper, silver and zinc), Arequipa (copper), Cajamarca (gold), La Libertad (gold) and Pasco (silver, lead and zinc) (MINEM, 2014).

In 2011, metallic ore exports accounted for more than 59% of the country’s total export value. The main metallic exports are copper (23.2% of total export value), followed by gold (21.8%), lead (5.2%), zinc (3.3%) and iron (2.2%) (INEI online statistics).

Around 15% of the national territory is covered by mining rights, and 63.6% of the territory is in areas that are closed to mining activity (MINEM, 2014). Nevertheless, there is still a wide margin for further expansion of the area under mining concessions.

Figure 1.11. Peru: copper and gold reserves and production, 2003-2013
picture

Source: ECLAC calculations on the basis of Ministry of Energy and Mines (MINEM), 2015.

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Notes

← 1. See Economic Commission for Latin America and the Caribbean (ECLAC), CEPALSTAT database.

← 2. The statistics come from the World Health Organization (WHO) and United Nations Children’s Fund (UNICEF) Joint Monitoring Programme for Water Supply and Sanitation [online] http://www.wssinfo.org/.