6. Mainstreaming

This chapter discusses the importance of aligning sectoral and other policies with biodiversity objectives. It focusses on the sectors that pose particular pressures on Latin American biodiversity, such as agriculture, fisheries, forestry, energy and infrastructure development, and tourism. The final section highlights synergies in policy approaches that benefit both biodiversity and climate change goals.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

6.1. Introduction

Latin America’s rapid population and economic growth is creating opportunities, and challenges, for biodiversity conservation and sustainable use. Mainstreaming and aligning sectoral and other policies with biodiversity objectives will become increasingly important in the region, as development continues and most areas remain outside official protection. The region’s population (including the Caribbean) is expected to reach 700 million by 2030, with 500 million categorised as middle-class, and GDP is expected to double from current levels (IDB, 2015). GDP growth is creating opportunities to reduce poverty, but is also increasing pressures on biodiversity, as people’s consumption habits change and production adapts accordingly. International calls for mainstreaming biodiversity into development have grown over the past decade, such as through the CBD and the Sustainable Development Goals (in particular Goals 14 and 15), and the OECD Development Assistance Committee’s Policy Statement on Integrating Biodiversity and Associated Ecosystem Services into Development Co-operation (OECD DAC, 2010).

While there have been improvements in the integration of biodiversity considerations into sectoral policies in Latin America, significant further work is required to ensure that the approaches are comprehensive, consistent, effective and accepted by local communities. Mainstreaming is particularly important for policies and programmes related to agriculture, fishing and aquaculture, forestry, tourism, mining, energy and infrastructure development because these sectors are heavily dependent on natural resources and the services that healthy, well-functioning ecosystems provide, but are also sectors whose activities can have substantial negative effects on biodiversity. Health, processing and manufacturing and construction are also recognised by the CBD as priority sectors for mainstreaming. There are significant benefits to be gained from aligning biodiversity considerations with climate change mitigation and adaptation policies and programmes.

There are many opportunities for governments to mainstream biodiversity considerations at sector level. For example, sectoral strategies, action plans and programmes, industry standards, sector guidelines and good practices, and certification schemes offer potential for adjustment (Van Winkle, 2015). It is also important to mainstream development considerations into biodiversity policies and to mainstream biodiversity into development co-operation portfolios (Drutschinin et al., 2015). Mainstreaming is preferable to isolated policy development in that it allows for integrated approaches that consider economic, environmental and social objectives, allowing for greater potential to achieve optimal outcomes that can be sustained into the future.

Mainstreaming biodiversity is not something that can be done overnight. It is a complex process that requires sustained investment and engagement over long time periods (at least 10-15 years), relationship-building, high-level buy-in and managing trade-offs. Enabling conditions are also key factors for success. Better, higher-resolution and accessible data and analysis on the status, trends and value of ecosystems and species can support mainstreaming efforts by helping to establish environmental baselines in areas where development is occurring, and identifying protection priorities. Good governance, effective processes and strong institutions are essential. In addition, effective partnerships and open dialogue with external stakeholders can help improve engagement, support and the business case for biodiversity (Drutschinin et al., 2015; Huntley et al, 2014).

Development co-operation providers can facilitate the biodiversity mainstreaming process in developing countries, such as in those in Latin America, through both financial and technical assistance. This can include assistance with national and sectoral plans, but also with data gathering, assessment tools (e.g. ecosystem valuation and cost-benefit analysis), and the design and implementation of informational, regulatory and economic instruments that support biodiversity mainstreaming (Drutschinin et al., 2015).

6.2. Agriculture

Agriculture is a significant source of income and employment in Latin America. With roughly 8% annual growth in exports since the mid-90s, agricultural products now make up around 25% of total exports. Latin America represents 13% of agricultural trade (World Bank, 2013). In Peru, close to half of workers are employed in agriculture or retail and restaurants (OECD, 2015a). In Chile, agricultural production grew by 27% between 2002 and 2013, and the country has become one of the world’s leading exporters of fresh fruit and wine (OECD/ECLAC, 2016).

However, Latin America’s growing agriculture sector is also putting increasing pressure on fragile terrestrial and aquatic ecosystems as a result of land-use change and deforestation, livestock grazing and effluents, water use, and pesticides and fertilisers (Chapter 2). The challenge is to find ways to grow productivity rather than agricultural area, promote sustainable cultivation and irrigation practices, and protect areas with high biodiversity value. While trade agreements and market demand are influencing a trend towards more sustainable production practices and organic products, sustainable practices continue to lag in most countries and the proportion of organic agricultural production remains small.

Pesticide and fertiliser use is a major source of water and soil pollution. Most Latin American countries are increasing their fertiliser consumption, albeit it remains modest compared to many OECD countries. Most Latin American countries have also increased their pesticide use, though Colombia managed to reduce theirs between 2006 and 2011 (Figure 6.1). While comparable data was not available for Brazil, the country’s agriculture sector is considered one of the world’s top consumers of fertilisers and pesticides (ABRASCO, 2015). High pesticide sales may partly be explained by the fact that Brazilian agriculture is practiced in tropical and subtropical environments, with a high incidence of pests. In Chile, rapid growth in the use of pesticides per unit of agricultural land since 2000 has been linked to the death of bee populations (CIAP, 2012).

Many Latin American countries are struggling to integrate biodiversity considerations and efficient natural resource use into the agriculture sector. Agricultural support systems have not yet been reformed to discourage pesticide use (Section 4.3); Mexico, for example, still provides VAT exemptions for agrochemicals (OECD, 2013), and pesticides and fertilisers are exempt from some federal and state taxes in Brazil (OECD, 2015b). While Peru has improved its institutions and instruments for environmental management in agriculture, challenges remain in terms of the widespread lack of land title, slash-and-burn techniques for converting forest to farmland, and an overall unplanned approach to agriculture (OECD/ECLAC, 2017). Colombia has an ambitious livestock strategy that calls for the return of 10 million ha of pasture to a more natural state through reforestation or conversion to silvopasture1 and the intensification of cattle rearing and agriculture. Progress was also made with regard to closure of the agricultural border, reforms in land access and use, formalisation of property, and protection of reserve areas as part of the commitments of the Peace Agreements. However, Colombia will be challenged to achieve its goals without reforming incentives that promote the expansion of grazing land – such as property tax exemptions and agricultural credits (OECD/ECLAC, 2014).

Agriculture is the largest water user in most regions (UN Water, 2014), and represents over 80% of total water withdrawal in Chile and Peru. This contrasts with the OECD average, where the greatest water withdrawal is from industrial sectors (Figure 6.2). In Chile, water demand is increasingly exceeding supply in the central parts of the country, where agricultural production is concentrated. The Chilean agriculture sector’s water demand further threatens biodiversity by draining wetlands and eroding soil (OECD/ECLAC, 2016). In Peru, export agriculture is heavily practiced in water-deficit zones that cannot guarantee its sustainability (OECD/ECLAC, 2017). Water scarcity reduces the ability of water bodies to eliminate excessive nutrients, thereby contributing to eutrophication.

Despite growing water scarcity risks, irrigation practices have yet to significantly shift to modern water saving practices (Box 6.1). Irrigation subsidies have encouraged the adoption of modern water-saving techniques, but older methods still account for 70% of irrigated area and Chile has among the highest irrigation water application rates in the OECD (OECD/ECLAC, 2016). Mexico has a programme that provides financial incentives for water conservation, but farmers’ uptake of the payments has been limited and subsidy programmes continue to support irrigation, particularly for electricity used to pump water (OECD, 2013). In Brazil, water abstraction is not charged in many regions (OECD, 2015b).

Box 6.1. Irrigation practices in Latin America

Agricultural irrigation is responsible for the largest proportion of water use in Latin America, with expectations for significant growth to support export and feed growing domestic populations. At the same time, many arid and semi-arid regions are experiencing water shortages, exacerbated by climate change, that threaten biodiversity and create conflict.

Shifting agricultural practices and technologies to become more water efficient is possible through design and modernisation of irrigation approaches. Improved knowledge of crop water requirements is also important.

Approximately 95% of irrigated lands in South America are surface irrigated, with the remainder using more water-efficient sprinklers or drip and micro-sprinkler irrigation, highlighting the potential to improve water productivity. Brazil has managed to achieve 35% sprinkler irrigation and 6% drip and micro-sprinkler irrigation. New methods and tools for irrigation include deficit irrigation (optimising irrigation to apply water during drought-sensitive growth stages of a crop) and remote sensing (using satellites to obtain regular water management information feedback from the field).

Source: de Oliveira et al. (2009), Irrigation Water Management in Latin America.

Policies for the protection and conservation of agro-biodiversity in Peru have been strengthened but resources remain inadequate. While policy initiatives are in place, they have not borne fruit, and there is limited support to develop germplasm banks of native crops or research on native and introduced species. Peru is considered one of the “centres of origin” for farming in the Americas, and the Andean zone has the second largest variety of maize after Mexico. Peru has a wealth of native plants that could be strategically used for climate change adaptation, given that they are particularly efficient in their use of water (OECD/ECLAC, 2017).

Brazil has begun to make progress in greening agricultural support systems, by making access to subsidised rural credit in the Amazon biome conditional on the legitimacy of land claims and compliance with environmental regulations. Starting in 2017, rural credit will also be conditional on land registration in the Rural Environmental Cadastre. Other subsidies include the Family Production Socio-economic Development Programme which awards farmers and ranchers with up to one-third of the minimum wage when they use more environmentally sound production practices, and the Low-Carbon Agriculture programme that provides subsidised credits for implementing good environmental practices. However, the volume of programmes supporting sustainable agriculture is small compared to the total support provided to farmers (OECD, 2015b).

6.3. Fishing and aquaculture

Fishing and aquaculture are important sources of employment and income in Latin America. Peru and Chile have some of the largest fisheries in the world, and production in Mexico and Brazil is also significant. Peru has a major industrial-scale maritime fishery, with anchovies accounting for 86% of the catch, and is also the world’s leading producer of fishmeal and fish oil. Fish catches are generally declining in the region, while production from aquaculture is increasing (Figure 6.3). For example, in Chile, fish catches halved between 2005 and 2010, due to low fish stocks and overexploitation, but aquaculture production has increased to make the country one of the world’s largest producers. Aquaculture production in Brazil grew five-fold between 2000 and 2015. Fishing and aquaculture threaten marine and aquatic biodiversity due to overfishing, bycatch, invasive species, disease and pollution (FAO, 2011) (Chapter 2). Further effort is needed to improve monitoring of marine and aquatic ecosystems, and develop and enforce more sustainable fishery and aquaculture policies.

A number of regulatory, economic and information instruments for fisheries and aquaculture management have been introduced and strengthened in Latin America over the past decade. In Peru, improvements have been made to fishing season limits, quotas, and minimum size, with the anchovy quota shifted from aggregate to per vessel, helping to reduce the size of the fleet and the number of processing facilities (OECD/ECLAC, 2017). Chile has embraced a quota system to manage its fisheries, and has a transferable quota licence system for industrial fisheries covering a part of the industrial sector’s overall quota (Section 3.3). In 2013, the country’s Law on Fishing and Aquaculture was amended to shift the basis for quota establishment from economic and social considerations to scientific and technical factors. The law also introduced concepts such as the precautionary principle and ecosystem approaches, and reserves the first nautical mile from shore exclusively for smaller vessels. In 2014, Chile implemented a new tax on Fisheries Law Extraction Rights based on the quota size of each industrial operator. The certification of salmon production centres to best practices in the country has increased (OECD/ECLAC, 2016).

Despite progress in the use of a variety of instruments for fishery and aquaculture management, governance is fragmented and monitoring insufficient. In Peru, for example, responsibility for the ocean is divided among many agencies, with co-ordination through the Multisectoral Commission for Environmental Management of the Coastal Marine Environment (COMUMA). While industrial fisheries are subject to remote tracking through a satellite monitoring system, a significant portion of marine and inland fisheries and aquaculture activities have little to no supervision as a result of limited human and financial resources dedicated to monitoring and enforcement (OECD/ECLAC, 2017). In Chile, while the Fisheries Act is being amended to limit emissions of solid and liquid waste from aquaculture, constrained resources for monitoring and enforcement is slowing progress (OECD/ECLAC, 2016). Brazil’s shared fishery management model is challenged by insufficient mechanisms to monitor and control compliance, and difficult co-operation between the Ministry of Environment and the Ministry of Fisheries and Aquaculture (MMA, 2015).

Effective fishery management requires good data on the status and trends of species and ecosystems to identify priorities for action. For example, while Colombia uses catch quotas established by the Ministry of Agriculture with scientific support from the National Aquaculture and Fisheries Authority (AUNAP) and the executive committee on Fisheries, the lack of data on commercial fish species has posed a significant challenge to developing effective biodiversity policy (OECD/ECLAC, 2014). Limitations in data on aquatic habitats and fishery resources are is also a challenge in Brazil (OECD, 2015b).

Local initiatives targeting fishing communities and artisanal fishers are proving to be an important component of biodiversity conservation and sustainable use in Latin America. Chile has established over 700 Areas of Management and Exploitation of Benthic (bottom-dwelling) Resources where exclusive rights are assigned to organisations of artisanal fishers. The North of Choco Department in Colombia has implemented co-operative management initiatives where local fishery communities are involved in the development and implementation of sustainable fishery policy. These approaches could be replicated in other coastal areas.

Brazil’s fishery and aquaculture management is in dire need of improvement. Currently, most of the country’s fisheries involve obsolete fleets targeting overexploited fish stocks. Brazil has no formal environmental licencing required for fishing activities though there are restrictions on fishing periods, areas and gear, and aquaculture activities are subject to licensing. The 2015 OECD EPR noted the need for additional measures, including fish catch quotas, more effective management plans for overexploited species, and extension of marine protected areas, particularly in areas where fish stocks are at their limit (OECD, 2015b).

6.4. Forestry

Forestry is an important economic sector in some Latin American countries, accounting for 5.2% and 7.3% of Chile and Brazil’s exports respectively (OECD, 2015b; OECD/ECLAC, 2016). In all Latin American countries, both forestry and deforestation practices pose a major threat to biodiversity (Chapter 2). While commercial forestry practices have improved and efforts to preserve and expand native forests have been strengthened, further efforts are needed to address illegal deforestation (Section 2.2) and direct consumption (FAO, 2015).

Most major producers of forest products in Latin America increased their use of forest certification between 2005 and 2014. However, certified forest still represents a relatively small proportion of forest area designated for production (Figure 6.4) (FAO, 2015). Brazil, Chile and Peru have improved certification rates in their forestry sectors. For example, Chile now has at least 70% of plantation companies affiliated with the trade association qualified for Forest Stewardship Council (FSC) certification (OECD/ECLAC, 2016). Mexico has two forest certification schemes; the Mexican Standard for the Certification of Sustainable Forest Management, which makes products eligible for green public procurement, and the FSC label (OECD, 2013). Brazil has two national certification schemes as well as the FSC (OECD, 2015b).

Some countries implement measures beyond certification schemes in order to promote sustainable forest management. For example, Brazil’s 2006 Forests Management Law introduced concessions as an instrument to promote sustainable forest management for timber production. Under the law, federal, state and municipal governments can grant the legal right for private companies to harvest timber and non-timber forest products, provided that the forest is sustainably managed. However, the concessions have been slow to expand due to a lack of expertise both in companies and government, high concession fees and unsolved land tenure conflicts. Additionally, a large number of rural land holdings do not comply with forest conservation obligations set in the 2012 Forest Code (OECD, 2015b). Chile’s 2008 Native Forest Recovery and Forestry Promotion Law created a financial incentive for the protection and preservation of native forests, and a Conservation Fund to promote management, conservation, restoration and research on native forest ecosystems (OECD/ECLAC, 2016).

Many Latin American countries provide incentives to promote reforestation. Brazil’s National Plan for Native Vegetation and Recovery (Planaveg) aims to promote large-scale forest restoration, targeting 125 000 km² within 20 years. It intends to do this by raising awareness, making seedlings available and affordable, creating markets for products from restored forests and introducing new finance mechanisms, inter alia (OECD, 2015b). The Mexican government runs a national reforestation programme, PRONARE, which gives support to landowners/users for reforesting degraded forest land, providing seedlings, training and funding. Since 2007, 1.87 million ha have been reforested (OECD, 2013). In both countries, high reforestation costs are a barrier to further progress. To maximise the impact of funds, they should be targeted at priority areas, e.g. those that are most important for biodiversity protection and ecosystem service provision (OECD, 2013; OECD, 2015b).

Increased forest area does not necessarily mean positive trends for biodiversity. For example, Chile’s forest expansion, encouraged by long-standing afforestation and forest plantation subsidies, has primarily consisted of non-native tree species plantations, such as Radiata Pine and Eucalyptus. While these plantations have climate change and soil erosion benefits, they can also increase pressure on native vegetation, habitat-specific species and water resources (OECD/ECLAC, 2016). Colombia encourages the planting of native species by providing larger subsidies for native planting than introduced species. The government subsidises 50% of the up-front planting costs for certified introduced species and 75% for certified native species through its Forestry Incentive Certification Programme. Between 1995 and 2011, the initiative supported reforestation of 173 950 ha. The initiative will, however, need additional funding and stronger monitoring, reporting and verification to achieve the government’s goal of reforesting one million ha with 60% commercial plantation (OECD/ECLAC, 2014).

Box 6.2. Slowing deforestation in Brazil: Progress and challenges

Brazil has the second largest forest area in the world and is home to the world’s largest rainforest. Two-thirds of the country is covered with forest or other wooded land. The Amazon represents 30% of the world’s tropical forest, hosting 600 types of terrestrial and freshwater habitats and the Cerrado region is one of the world’s biodiversity hotspots.

The rate of deforestation has slowed significantly in Brazil. However, Brazil has the largest number of hectares of forest lost each year in the world. Forest area has decreased by 5% between 2000 and 2015, and by 10% when compared to 1990.

Unclear legal tenure, especially in the Amazon, has been a major driver of deforestation. In 2011, only 4% of the Amazon area had a valid private property title. In 2006, the government pledged to reduce deforestation in the Amazon by 80% by 2020. Annual deforestation in the region dropped from 27 700 km² in 2004 to 4 800 km² in 2014. Brazil’s NDC pledges to end illegal deforestation in the Amazon by 2030.

Brazil has innovative instruments helping to achieve these reductions in deforestation. For example, Brazil’s Action Plan for the Prevention and Control of Deforestation in Amazonia Legal (PPCDAm), which aims to clarify land tenure, strengthen monitoring, enforcement and compliance, and promote sustainable production chains that provide alternatives to deforestation, has been held up as a model for other countries. A new Forest Code and its innovative implementation and enforcement instruments promise to help further reduce illegal forest clearing and reconcile the objectives of agricultural development and biodiversity conservation. Effective implementation will depend on having sufficient financial and human resources and improving co-ordination across levels of government.

Source: FAO (2015), Global Forest Resources Assessment 2015; OECD (2015), OECD Environmental Performance Reviews: Brazil.

Mining is an important part of many Latin American economies, and Latin American countries are some of the world’s largest mineral producers. Chile and Peru are the world’s first and third largest copper producers respectively, and Mexico and Peru are the first and third largest silver producers. Brazil is the third largest producer of iron ore (USGS, 2016a, 2016b, 2015a, 2015b). Ore and metal exports represent roughly half of merchandise exports for Chile and Peru, and over 10% for Brazil (Figure 6.5). The oil and mining sectors represent more than half of Colombia’s exports (OECD/ECLAC, 2014). However, mining is also a major driver of ecosystem degradation (Chapter 2). Mining and illegal mining are also an important source of social conflicts that hinder a proper management and governance of biodiversity; for example 20 of the 30 cases of environmental conflict documented in Chile are linked to mining activities (Segall, 2014).

Important steps are being made to improve environmental performance in the mining sector. For example, Environmental Impact Assessments (EIA) of large mining projects have improved, and the use of tools such as biodiversity offsets, where biodiversity loss at the site is compensated with conservation projects in other locations, has increased with examples in Peru and Chile (OECD/ECLAC, 2016) (Section 3.3). However, more effort is needed on enforcement and monitoring, effective Environmental Impact Assessment processes (biodiversity considerations are not always consistently and comprehensively addressed), accelerated clean-up of abandoned mines, and avoiding conflict with indigenous and local communities.

Several incidents have highlighted the significant risks associated with mining projects that do not have adequate oversight. Tailings ponds of hazardous mining waste present a risk to humans and ecosystems, particularly in regions prone to earthquakes, landslides and heavy rains. The collapse of a mining dam in the Brazilian state of Minas Gerais in November 2015, for example, where communities below the mountain mine were covered with toxic mud, caused both human casualties and environmental damage from the flooding of the Rio Doce river with mining waste that killed aquatic species and impacted the source of drinking water for thousands of people (Phillips, 2015). Since the tragedy, there have been calls for improved regulations and enforcement at Brazilian mines. Many residents in the flooded town were not aware of the risks above, generating mistrust (Phillips, 2015). Minimising the risks of resource-based mining development requires transparent and robust legal frameworks and fiscal regimes that are implemented and monitored by strong governmental and societal institutions (Lizanco Rodriguez et al., 2013).

Small-scale and artisanal mining also represents a risk to biodiversity as it is often poorly monitored or controlled. In Peru, artisanal miners (mainly of gold) often operate without any environmental permit, increasing the likelihood of pollutant releases into water and soil. Peru’s government is, however, actively seeking to formalise small-scale and artisanal mining, eradicate illegal mining and improve environmental performance. Authorities now have the legal right to conduct environmental audits of mining activities of this nature, which are pursued without any operating or environmental permit, and The Corrective Environmental Management Instrument applies to existing small-scale and artisanal mining operations that are in the process of formalisation, to bring them into line with legally determined environmental obligations. In Chile, where the regulatory focus has been on large-scale mines, there is insufficient information available on the environmental impacts of small-scale mining operations, which are subsidised by the government (OECD/ECLAC, 2016).

The rapid expansion of mining development, particularly in rural, poor areas and on or adjacent to lands occupied by indigenous peoples, has led to growing conflict in numerous Latin American countries. Many of the concerns relate to the impact of mining activities on land and water. Peru has been a leader in tackling social conflict and improving transparency in the sector. In 2012, the government established the National Office for Dialogue and Sustainability (ONDS) to help resolve mining-related disputes. Peru was also the first country in Latin America to successfully implement the accountability standard of the Extractive Industries Transparency Initiative (EITI), which aims to improve the transparency of tax revenues and payments from mining and the extent to which they flow back into the development of mining areas (OECD/ECLAC, 2017).

Strained dialogue and co-operation between different parts of government can be a barrier to the effective enforcement of environmental policies in the mining sector. In Colombia, environmental authorities have been unable to prevent the Ministry of Mines and Energy from granting mine titles in areas of environmental importance over the past decade. In 2010 alone, over 400 mining titles were granted in protected areas, and over 1 000 in wetland habitats and 2 000 in forest reserves. In 2013, however, the Ministry of Mines and Energy and the Environment Ministry signed an agreement to secure protected areas from development and pursue sustainable development within the sector. The mining ministry has also established an office to deal with social and environmental issues, and the two ministries are conducting research on the impact of mining on natural resources (OECD/ECLAC, 2014).

Several countries have taken steps to limit future environmental damage from companies currently operating mines. However, clean-up of historical damage remains limited due to a lack of legal frameworks making companies liable to do this. Abandoned mines represent a significant ongoing risk to soil and water contamination in Latin America. Peruvian legislation on the treatment and clean-up of environmental mining liabilities (PAMs) could provide a model for the region. The first step taken was to draw up an inventory of abandoned sites, with 8 616 PAMS as of 2015, 50% of which were determined to pose a high or very high risk. The organisation Activos Mineros pursues remediation at sites abandoned by former state-owned mining enterprises. Currently-operating mining companies in Peru are also liable for the closure of mines, and are required to take measures to avoid risks to human health and the environment from abandoned mines (OECD/ECLAC, 2017). While Chile has made progress in identifying abandoned or inactive mine sites, and a new 2012 law requires all new mines to have approved end-of-life closure plans (Box 6.3), there are no decontamination plans in place for its estimated 650 abandoned mining sites (OECD/ECLAC, 2016).

Box 6.3. Chile’s mine closure financial guarantees

Chile’s 2012 Mine Closure Law aims to prevent the creation of abandoned mine sites in the future by requiring mining companies to provide financial guarantees for each operation and develop detailed mine closure plans. This mechanism is meant to generate sufficient funds for site closure should the operator default on its decommissioning obligations. The first phase of the law’s implementation affected every mine over a minimum size threshold with an approved closure plan. These companies had to provide, by November 2014, a cost estimate that took into account remaining mine life and a discount rate based on a state-provided index. Once the estimate was approved, the mining company had to provide a guarantee for the amount, using one of the approved financial instruments.

Initially, 20% of the present value is required to be guaranteed. The amount gradually increases over 15 years (or two-thirds of the remaining mine life, whichever is shorter) to the full present value of closure costs. The law allows for partial reductions of the guarantee. The total amount to be guaranteed is estimated to be USD 30 billion.

Source: OECD/ECLAC (2016), OECD Environmental Performance Reviews: Chile 2016; Weeks (2015), Mine closure in Chile – challenges and changes.

6.5. Energy and infrastructure

Latin America produces energy products for both export and domestic consumption, making it an economically important sector in the region. While the region has relatively large oil reserves, they are concentrated in few countries. Mexico, Brazil and Colombia are major oil producers and exporters (IEA, 2016), and oil is also a factor in Peru’s economy. Natural gas and coal reserves are not as significant in Latin America (IEA, 2015). The region’s electricity consumption is projected to grow by 75% between 2009 and 2035 (Tissot, 2012). While electricity coverage has increased substantially, there remain significant populations without coverage in rural areas, particularly in countries such as Peru. Many sources of generation will be needed to meet this demand – hydropower, wind power, oil, natural gas, coal and biomass (largely from sugarcane residues), each of which pose their own risks and challenges as far as biodiversity is concerned. The expansion of road and industrial infrastructure is another major driver of land-use change and habitat loss and fragmentation in Latin America (Chapter 2).

Hydroelectric development continues to be contentious in many regions of Latin America. While it is an important source of energy to limit greenhouse gas (GHG) emissions and air pollutants, the projects can also result in displacement of people and destruction of natural habitat for the creation of reservoirs. Hydropower dominates electricity generation in Brazil and is also an important electricity source in Chile, Colombia and Peru (OECD/ECLAC, 2016; OECD, 2015b; OECD/ECLAC, 2014). Across Latin America there are more than one thousand dams measuring 15 metres tall or more (Cevallos, 2006), and this number is expected to grow as governments seek ways to meet growing energy demands at the same time as climate change commitments. Carefully managing hydroelectric expansion, and using the latest technologies and approaches to limit ecosystem impacts, will be important in Latin America in the coming years.

To take an example, in Brazil, hydropower represents almost three-quarters of electricity production. While this share has declined over the past decade, there remains substantial growth potential to meet rising demand. However, most potential is located in the Amazon, creating challenges for environmental licensing and public acceptability. While hydropower projects are subject to environmental licensing and impact assessments, unlike other countries Brazil has not paid significant attention to the impact on water flows needed to sustain freshwater ecosystems and ecosystem services. Impacts have also generally been addressed as mitigation measures late in the process rather than early in the planning stages. The 2015 OECD EPR suggested using strategic environmental assessments to identify where energy capacity could be built with the least environmental impact, taking into consideration cumulative impacts (OECD, 2015b).

Strategic environmental assessment (SEA) and environmental impact assessment (EIA) are key tools to integrate biodiversity considerations into energy and other infrastructure plans and projects. While EIA has existed in most Latin American countries for some time and SEA is increasingly being used, the design and implementation of both tools needs to improve significantly to consistently and comprehensively take biodiversity into consideration (Chapter 4). In addition to these traditional instruments, there is a leading international initiative in this space called Biodiversity Understanding in Infrastructure and Landscape Development (BUILD), implemented by the Conservation Strategy Fund. BUILD aims to create lasting human capacity for energy and transport infrastructure analysis in partner countries that assesses the ecological and economic trade-offs involved in infrastructure investment decisions. It does this through a series of courses (e.g. in cost-benefit analysis, valuation methods, natural resource and environmental economics), regional forums, in-depth analyses of specific infrastructure projects, and information sharing. To date, BUILD has been applied in Peru, Bolivia and Brazil, as well as Africa and the Himalayan region (CSF, 2016).

6.6. Tourism

In 2015, Latin America received more than 96.6 million foreign visitors, the highest number reached over the last decade. The United States, and increasingly Latin American countries, are the main sources of visitors (UNWTO, 2016). Tourism offers significant economic opportunity; it represents the fourth largest export sector in Chile, with an estimated 4.5 million foreign visitors in 2015, and generates more than 8% of GDP in Mexico. It also presents an opportunity for increased biodiversity financing. However, tourism can also present a risk to biodiversity and ecosystems if it is not managed sustainably.

Nature-based tourism has particularly high potential in Latin America. While three-quarters of tourists in Chile visit a natural area, Brazil has yet to fully capitalise upon its natural wealth. A 2014 study estimated that the potential income in Brazil from tourism in protected areas could reach BRL 53 billion (USD 15 billion) over 10 years (Semeia, 2014). In 2013, just two national parks (Iguaçu and Tijuca) welcomed nearly 60% of visitors, and only 26 of Brazil’s 68 national parks are open for tourism. Colombia is seeking to increase nature-based tourism by offering a 20-year income tax exemption for eco-tourism investments once they are certified by the Environment Ministry. The Colombian National Parks Authority is also implementing Community Ecotourism Programmes in some national protected areas that aim to improve the livelihoods of communities in the parks’ zones of influence, while reducing pressures on natural resources by fostering sustainable economic activities (OECD/ECLAC, 2014).

Many governments have recognised the need to improve the sustainability of tourism to limit the negative environmental impacts of the sector’s expansion, and to attract a growing number of environmentally-conscious, nature-seeking travellers. Chile and Mexico have developed national strategies for sustainable tourism and several countries are pursuing certification and labelling schemes. Colombia has a voluntary environmental certification system for tourism providers, while Mexico promotes eco-certification for tourism-related businesses in conjunction with the Rainforest Alliance and EarthCheck programmes (OECD, 2013). Chile has created New Sustainable Distinction Systems for Chilean Tourist Accommodation and Destinations based on global sustainable criteria suggested by the World Tourism Organisation (OECD and LEED, 2014).

6.7. Climate change

There are strong linkages between biodiversity and climate change adaptation and mitigation, creating opportunities to identify synergies in policy approaches that benefit both biodiversity and climate change goals. International climate change financing, market mechanisms and programmes may create opportunities to finance climate change adaptation or mitigation projects that also conserve or restore biodiversity. Climate change is expected to exacerbate water-related challenges, risks to biodiversity and the vulnerability of resource-based sectors in a number of regions in Latin America.

Forests in particular offer opportunities for synergistic climate-biodiversity benefits. Forests provide carbon sequestration services as well as species’ habitats and other ecosystem services. Deforestation and forest degradation are also the second leading cause of climate change, responsible for about 15% of global GHG emissions. In some countries, such as Brazil, deforestation and forest degradation together are the main source of national GHG emissions (FCP, 2015). The UN Framework Convention on Climate Change (UNFCCC) process developed an initiative aimed at Reducing Emissions from Deforestation and Forest Degradation (REDD). In addition to stemming deforestation and forest degradation, the initiative also seeks to foster conservation, sustainable management of forests, and enhancement of forest carbon stock (REDD+). There are several international financing opportunities for countries able to demonstrate reduced GHG emissions through REDD+ activities (FCP, 2015). In 2014, Brazil was the first country to submit its forest reference emission level to receive payments under the REDD and REDD+ initiatives. It has received about half of the total approved international finance from REDD and REDD+ through its Amazon Fund (OECD, 2015b). Mexico has played a leading role in promoting the REDD+ initiative in international negotiations on climate change and Colombia has a Strategy for the Control of Deforestation and Forest Management which includes a REDD+ strategy. However, the benefits of REDD+ programmes on biodiversity may not be universal and could in some instances provide perverse incentives. For example, there may be poor overlap between biodiversity, carbon storage and the provision of other ecosystem services.

Several Latin American countries are working to leverage synergies between climate change mitigation, adaptation and biodiversity conservation. In its Intended Nationally Determined Contribution (INDC) under the UNFCCC, the government of Brazil set out goals to achieve zero illegal deforestation, compensate for GHG emissions from legal suppression of vegetation, and restore an additional 15 million ha of degraded pasturelands by 2030 (Government of Brazil, 2015). Chile has also committed to the sustainable development and recovery of 100 000 ha of mainly native forest land between 2020 and 2030 (Government of Chile, 2016). Mexico has developed a strategy for climate change adaptation in protected areas and its 2015 INDC embraces the concept of ecosystem-based climate change adaptation.2 Colombia’s national law and policy on climate change also recognises climate change as a driver of biodiversity loss and, in turn, the conservation and managing biodiversity as a strategy for climate change adaptation and the mitigation. In Peru, biodiversity-relevant sectors are at the core of the National Adaptation Plan and any of the actions taken to improve resilience are likely to also benefit biodiversity and ecosystems (Government of Peru, 2015).

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Notes

← 1. Silvopasture is an agroforestry practice that integrates livestock, forage production, and forestry on the same land-management unit.

← 2. This includes reaching a rate of 0% deforestation by 2030, reforestation of watersheds and riparian zones, conserving and restoring ecosystems, strengthening the protection of priority species from the negative impacts of climate change, conservation and recovery of coastal and marine ecosystems, and integral management of water across agricultural, ecological, urban, industrial and domestic uses (Government of Mexico, 2015).

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