Chinese-Latin American Relations in a Warming World: Toward a More Sustainable Paradigm?

Chinese-Latin American Relations in a Warming World: Toward a More Sustainable Paradigm?


OK, so good morning everyone. My name is Timmons Roberts. I’m Ittleson Professor
of Environmental Studies and Sociology here
at Brown University. Welcome to the Watson Institute
for International Studies. Watson seeks to promote
a just and peaceful world through research, teaching,
and public engagement focusing on three main
areas, development, security, and governance. The Institute leverages
Brown’s tradition of true interdisciplinary
to foster innovative policy-relevant
scholarly activities. So, a warm welcome to
all of our speakers for making the trip
here, and a special warm welcome to Fundacion
Botin alumni, scholars, and others that are
watching online. We will be remembering
you, and hopefully we’ll be getting your questions
in during the session. We’ll be live tweeting
for the event. So those who are
watching online, you can follow the discussion
at the hashtag #CHLACC. And that catchy hashtag should
get pretty busy during the day. We had an event back
in April that we had 2,000 online viewers
actually about Latin America and climate change. And so we’re hoping to get a
large fraction of that today, and we welcome everybody. And do send in your
questions for your panelists, which we’ll try to incorporate
into the discussion. The conference is
being organized today by Brown’s Climate
and Development Lab at the Institute at Brown
for Environment and Society and the Center for Latin
American and Caribbean studies here at the Watson Institute. It relates to a project
we’re being carried out between the lab– the
Climate Development Lab– and one of the UK’s leading
environmental organizations, E3G. So, our Climate
and Development Lab works on policy-relevant
research. It’s sort of a think tank of
faculty, students, and staff. And we’re all traveling
to the Lima negotiations in about two weeks for the
United Nations Framework Convention on Climate
Change, and we’ve been going for about
the last four years. A huge thank you to
the Fundacion Botin for generously funding this
event, and a big thanks to the Center for Latin
American and Caribbean studies, Professor Richard
Snyder, and the center director and center manager,
administrator Kate Goldman, for their support in helping
us organize this event. Finally, thanks to the CDL team,
the Climate and Development Lab, who which led
the organization, Guy Edwards the mastermind,
Allie Reilly– Allison Reilly– Marguerite Suozzo-Gole, Maria
Camila Bustos back here, [INAUDIBLE], and Sophie
Purdom, and Tory Hoffmeister. The timing of the conference
is particularly pertinent. China’s is playing a major
role across Latin America as a creditor, as an investor,
and as a trade partner. The UN Commission for Latin
America– ECLA, otherwise known as CEPAL in Spanish–
and the Caribbean predicts China could displace
the European Union to become Latin America’s second
largest trade partner in the next year or two. The Intergovernmental Panel on
Climate Change Fifth Assessment Report just released
in the last few weeks. The summaries confirms that
China and Latin America are highly vulnerable
to the climate impacts, such as floods,
droughts, and sea level rise. We could say much
more about that, but we’re going to be brief. Next month, the UN Climate
Change Negotiations will meet in Lima, which
puts the Peruvian government in an important position as
the chair of the negotiations. It’s hoped that countries
will agree there on at least the basic
framework for a draft for a new global agreement,
which will take effect starting in 2020, but it’s
going to start working in 2015. It has to be finalized
in Paris next year. As the world’s largest emitter
of greenhouse gases and soon to overtake the United
States as the world’s largest economy, measured according
to purchasing power parity, this year China’s contribution
to the global response to climate change is pivotal. And the agreement in
the last two weeks now between the United
States and China is, I think, giving a new
impulse to negotiations, to actions around
the world, we hope. We’ll see in Lima really
where we’re going. Latin American
countries also play important roles at the
UN Climate Negotiations, especially Brazil
and Mexico, but also other countries like Peru,
Venezuela, Ecuador, Chile, and Colombia. Latin America is not currently a
major region for greenhouse gas emissions in the global sense. It depends on how you define
that, but it’s not irrelevant. It’s about 11% of
global emissions, with most of these coming
from deforestation, but that’s changing as well. Deforestation rates have fallen
sharply, especially in Brazil, by about 2/3 from their high
in the mid-2000s as Brazil has focused particularly
on this issue. However, sustained
economic growth is driving an increase in
Latin America’s emissions from energy generation and
energy exploration, energy transport, and from agriculture,
and from urban transportation especially. The recent US targets, I want
to spend just a minute on. It’s being heralded as
a vital contribution to build the momentum. The US, as you
probably know, intends to achieve an
economy-wide target of reducing its
emissions by 26% to 28% below its 2005 level
in 2025, or by 2025. China intends to achieve
peaking of its emissions by 2030 and make its best efforts
to peak before then. It’s also trying
to have about 20% of its energy come from
non-fossil fuels, which means nuclear, solar,
wind, and other renewables. This has potentially
enormous consequences for clean energy in
China and in its role as the leader of green energy. In Latin America’s case,
various Latin American countries are taking steps to
confront climate change. Mexico has passed a
comprehensive climate change law in 2012 with targets to
reduce emissions by 30% by 2020 and 50% by 2050. Brazil has established a
national greenhouse gas reduction target of
about 36% below business as usual projected
emissions by 2020, largely based on reducing
deforestation rates. And they’re actually beyond
that level right now. But deforestation may
be coming back up. By early 2014, at least
19 countries in the region had renewable energy policies,
and 14 had renewable energy targets, such as Chile,
which aims to cover about 20% of its electricity with
renewables by 2025. At the APEC– the Asia Pacific
Economic Cooperation– meetings and the G20– Group
of 20– meetings earlier this month, China
and Latin American countries discussed various new agreements
to increase their cooperation. Mexico and China plan
to set up a $2.4 billion investment fund to support
infrastructure, mining, and energy projects in Mexico. You’ll hear more
about this later. Latin America has a remarkable
endowment of natural resources and energy reserves,
including about 25% of the planet’s arable land,
22% of the world’s forest areas, home to the second
largest oil reserves outside of the Middle East. What happens to those
fossil fuel reserves if they stay
underground or are burnt and their carbon launched
into the atmosphere will have determinant
effects for Latin America and the world’s future. So as we can see, China-Latin
American relations are very significant with
potentially far-reaching consequences for global climate
change and for its governance. And as an important example
of South-South cooperation. Further, these relations
have important ties with the Watson
Institute’s focus on development,
security, and governance, getting back to what we’re
here as an institution to do. So allow me to hand over the
program to Guy Edwards, who will moderate the session. Guy is our research
fellow and the co-director of the Climate and
Development Lab here at Brown
University’s Institute at Brown for the
Environment and Society. He’s also manages the lab’s work
on Latin America and climate change. He’s really, I think,
emerging as one of the world’s–
what’s the word? I want to say the greatest
experts on Latin American climate change. He’s been focused on this issue
for almost a decade full time. He was the person who set
up a site originally called Latino Cambio. It then became Intercambio
Climatico in a partnership with the platform Latino
Americano on Climate Change. Guy has a master’s degree
in Latin American studies from the Institute
of the Americas at the University
College London. And we just completed
a book manuscript, I’m thrilled to
say, from MIT Press, which you’ll be
hearing some more on as the day goes on and in
our work in the future. It will be out I guess
sometime next fall, but we’d be eager to get some
feedback from some people if you have any
interest in seeing it. So thank you very
much for coming. I’m looking forward to the
morning, and here you go, Guy. Thanks. [APPLAUSE] Thanks very much, Timmons,
for that very generous introduction. And to the panelists,
thank you for coming. We’ve been following your
work in a number of cases for a few years
now, so we’re really excited you could come here. Thanks to you all
for coming as well and for those in the
live stream joining us. I’m just going to take
a couple of minutes just to make some
opening remarks and then describe
the plan for the day and then introduce our speakers
to get the ball rolling on the presentations. So, one of the reasons we
organized this conference today is following a
paper Timmons and I wrote for Brookings
Institution earlier this year called “A High-Carbon
Partnership, Chinese-Latin American Relations in a
Carbon-Constrained World.” This paper was far
too short to cover the complex and
far-reaching connections China is building
in Latin America. So our hope for the
conference today is to build on some of
these initial thoughts and provide a
platform for new ideas on the subject given the broad
expertise and knowledgeable of our speakers. So, just a couple of points. China’s investment trade
in loans in Latin America, like those of other major
powers in the region, tends to focus on
high-carbon activities, including fossil
fuel extraction, large-scale agriculture, and
energy-intensive industries such as mining. China’s rapidly increasing
investment trade in loans in Latin America
may be entrenching high-carbon development
pathways in the region. In other words, the
type of interactions between China and Latin
American countries appears to be out of
sync with those calling for greater emphasis
on decarbonizing the global economy and
low-carbon and sustainable development. It’s just worth mentioning
that China is not creating a new problem
for certain Latin American countries of
resource dependency, but it’s extending,
transforming, and increasing an old one. One of our key questions
is whether there is a tie between China’s
role in opening up vast resources in Latin
America and the way those nations make
national climate policy and how they act at
the UN Climate Talks. We’ve just heard from
Timmons that China and Latin America are both critical to
the success of any global effort to address climate change
and how both are very vulnerable to climate impacts. Therefore, staying on or moving
towards low-carbon development parkways is critical
for these countries. But substantial
Chinese investments in natural resources
and commodities, when combined with those
of other nations and firms, run the risk of taking
Latin American countries in an unsustainable direction. So the rapidly expanding
economic, commercial, and political ties between
China and Latin America could have far-reaching
implications for the climate change agreement
next year in Paris and global climate governance
in the decades to come. And just a couple
more very brief points, and I hope this
is something we’re really going to look at today. Chinese investments and imports
of Latin American natural resources may be strengthening
the relative power of political and commercial
domestic constituencies and of dirty ministries
such as ministries of mining, agriculture,
and energy in relation to environmental climate change
ministries and departments. So these cleaner ministries
are traditionally weak and marginalized
in the region. So China may be
inadvertently undermining Latin American
countries’ efforts to deal with climate change by
reinforcing and strengthening actors within those
countries and governments that do not prioritize climate
change in the first place and that regards efforts
to protect the environment or carbon development as a
break on economic growth. So, of course there is
two sides to this story. And with the slide
and the poster for the event with
these two bubbles coming together with the wind
turbines and then the chimney spewing carbon
emissions, we really want to talk about the
two sides to this story. And there is a very
positive situation going on, which if could be expanded
could be really quite transformative for Latin
America’s low carbon development, And that is that China
is interested in working with the region
on climate change, but thus far official or
multilateral exchanges have been limited. But I think the opportunities
for low carbon growth are considerable. And just one example is
China’s growing influence in global renewable
energy markets, which present excellent
opportunities for the region. So to wrap up, the
aim of this conference is to better understand the
development of Chinese-Latin America relations and explore
some of the opportunities and limitations
towards establishing a more sustainable agenda
and tackling climate change. The timing is
particularly relevant given preparations are under
way to hold the first China Community of Latin American
and Caribbean States– CELAC– forum and the launch
of a new Chinese, Latin American, and the
Caribbean cooperation plan from 2015 to 2019,
which is going to be happening early next
year in January apparently. So therefore there’s an
important opportunity to discuss how the issues
of climate change, promoting low carbon development, and
protecting the environment might feature in Chinese-Latin
American relations going forward. So that’s just a couple
of opening comments. So, the plan for
the day, we’re now going to hear from
our panelists, who are going to present for
about 12 minutes each. That’s the aim. So I’ll try and
keep you on time. I’ll give you a
wave from over here. Then I’m delighted to say
we’re being joined by Dr. Gao Jian, who is the
former vice governor of the Chinese Development
Bank, which is the largest vendor in Latin America,
who will be commentating on the presentations. We’re then going to
have a quick break, and we’ll come back
for a discussion. But let me introduce
our speakers for this morning panel. Firstly, Lisa Viscidi, who’s
director of the Inter-American Dialogues Program on
Energy, Climate Change, and Extractive Industries. Lisa has written numerous
reports on energy policy, climate change, social
environmental impacts of natural resource development,
and the geopolitics of energy. Sandra Lopez, on the far end,
works for the Inter-American Development Bank as a
consultant in the climate change as the sustainability
division in charge of the promotion of low
emissions development strategies in Latin America
and the Caribbean countries. Sandra used to work
for Colombia’s Ministry of Environment and
Sustainable Development and was also a former member
of Colombia’s delegation to the UN climate change talks. Rebecca Ray is a research
fellow of the Global Economic Governance Initiative of
Boston University’s Pardee School of Global Studies. She’s a PhD student in
economics at the University of Massachusetts Amherst. And her research examines
development strategies in Latin America and the
impact of international finance on domestic labor
markets, living standards, and environmental
sustainability. And then we have Reggie
[INAUDIBLE] from the Institute of Latin American Studies in the
University of Texas at Austin. Reggie’s a second-year
master student, and her research interests
include the political economy of development, human
environment relations, migration, gender,
and ethnic studies. And we’re excited
to hear about how her work on Ecuador’s
hydroelectric projects, which are being financed
by China, which is a really important case study. And then finally, Dr. Gao Jian. He’s a senior economist advisor
of the China Development Bank, and he’s currently a visiting
scholar in the Department of Economics at Harvard. And he was formerly
vice governor of the China Development Bank. So, a very warm welcome to you
all, and thank you for coming. Lisa, should we– Perhaps we should– yeah. Thank you. Thank you so much for
the invitation, Guy. I’m just going to talk about
some of the– sort of set the stage of the background of
the China-Latin America climate change relationship. And I think we have
some interesting data both from my organization,
the Inter-American Dialogue, and from other sources. So, as a general
picture, emissions from China and other developing
countries are rising. As we know, China and the
US are the largest emitters. And Asia is the
fastest growing region. Latin America, interestingly,
has quite low emissions per capita. The main exception
is Brazil, and that’s because of deforestation that
causes very high emissions. And this also
gives you a picture of how Latin America counts for
a relatively small percentage of emissions in the world. Latin America’s total greenhouse
gas emissions actually decreased over a decade
from 2000 to 2010, and this occurred
despite the fact that it was a period of
high economic growth. However, emissions are
increasing in the region. So Latin America, the main
cause behind the emissions is actually deforestation,
because the region has among the biggest area
of forest in the world. So reductions in
deforestation are expected to drive a major
reduction in greenhouse gas emissions. But emissions are growing
from other sectors, so essentially energy-related
emissions are rising. Particularly, electricity
and transportation emissions will more than double over
the next couple of decades. So, globally, the norm
is for approximately 2/3 in most countries of
emissions to come from energy, and about 1/3 comes
from land use. Latin America is reverse. 2/3 approximately come from land
use, and 1/3 comes from energy. So this is very important,
because Latin America in terms of emissions,
it’s a very unique region. You have extremely clean energy
compared to the global norm, and the majority of that
is because the region is so dependent on hydropower. You have several of
the largest countries in the region– Brazil,
Colombia, Venezuela– they’re all around 70%
dependent on hydro. You compare that to
China, India, the US, where the majority
is from coal, and you come with extremely low
emissions in the electricity sector. Transportation is more
traditional makeup, coming mostly from fossil
fuels, although Brazil has significant
ethanol, so that also lowers their
transportation emissions. However, as I said, you have
a huge land mass of forests, and because Latin America
has maintained so much of the forests,
any deforestation leads to higher emissions. And what we’re
seeing is the picture in Latin America is moving more
towards the global average, which is more energy
emissions, less land emissions because
deforestation is coming down. But then that’s speaking
about the region as a whole, and of course you have
to look by country. So it varies a lot by country. Brazil with the Amazon is
really the largest emitter. The other countries are smaller. Even Mexico, which
is a large economy, it’s not nearly
as high as Brazil. And then also looking
between countries, so Brazil and Argentina, they’re
major agricultural producers. They have a lot of
land-use related emissions, while Mexico and
Venezuela have much higher energy-related emissions. Venezuela in particular has
extremely high per capita emissions. And that’s because
they have incentives for the use of fossil fuels that
are really distorting markets. You have the lowest gasoline
prices in the world. You have extremely
low electricity prices as well and huge inefficiencies,
and so the per capita emissions are very high,
which is not really the average for the region. Then to bring in the
picture of China, growing Chinese
demand has increased Latin American
commodity exports. So mining exports to
China including energy have grown significantly. Just looking at the oil
sector, 10 years ago, exports, oil exports
to China were insignificant or even zero. And they’ve really
ramped up quickly in the last couple of years,
especially from Venezuela. Exports to China
account for up to 8% of Latin American
countries’ GDPs. So exports to China are really
important for these countries. It’s a relationship
that’s become extremely important over
the last couple of years, some countries more than
others, but overall it’s definitely growing. Energy-intensive sectors attract
the most Chinese investments. So not just talking
about exports, but also talking about foreign
direct investment, there’s a huge
amount of investment coming into coal, oil, metals,
all of these industries. So we have the breakdown here. Also, Chinese foreign
direct investment has stimulated Latin America’s
oil and gas industries. So if you look at these two,
what this chart shows is overall investment
from the world, the portion that’s oil and
gas, for example, is only 15%. But when you look at the
breakdown from China, it’s very different. It’s 70% is in oil and gas. Now, what impact that
has on the industry is another discussion,
because I think you would have to ask
whether these– there’s a demand for oil and gas, so
these investments may be coming from somewhere else anyway. That doesn’t necessarily mean
that if the Chinese weren’t investing that there
would be no oil and gas production in the region. Of course that’s not true. But it does mean if
there’s more capital, it could bring down costs,
and it could make it easier to extract oil and gas. But that’s something that
we would have to debate. This is a snapshot from
the Inter-American Dialogue and Boston University database,
which if you haven’t seen, it’s hosted on our website,
and we get a lot of the data from BU. And this is something that
my colleague works on, but it’s very important
for the discussion that we’re having, so I
wanted to show a snapshot. China’s provided over $100
billion in loan commitments to Latin America. That’s more than all of
the major development banks combined. It’s really significant. And this database is
updated every year, and it shows you by
country, by sector. So a lot of what I’m talking
about comes from here. In terms of
environmental impacts, there’s been a lot
of controversy. And many people say
Chinese banks have low environmental standards. I think that it’s hard
to really generalize. So it’s true,
certainly Chinese banks include environmental provisions
in their loan agreements. The standards are
not necessarily the same as the
Western institutions, and there are some cases where
Chinese firms have been fined for environmental degradation. There’s a project in
Peru that was widely cited as an example of poor
community engagement and lax standards. But you really have to
look at it case by case, and it varies a lot. And some recent
research has shown that there’s been some major
improvement in this area. So I think that’s
something that needs to be continually monitored. In terms of the climate talks
coming up right now in Peru, there’s also an interesting
relationship, I think, between China and Latin America. So, China has certainly
had a leading voice in some of the negotiating groups. So you’ve got the like-minded
developing countries that take the
hardest line, saying developing countries are not
as responsible for emissions, and the burden needs to
fall on developed countries. You have the ALBA
nations– Venezuela, Bolivia, Ecuador, and
Nicaragua are part of that. Then you also have the
basic group with Brazil that has a similar stance. But then you have other
Latin American countries that are more progressive
in their views. And I know some of
the other speakers will be able to talk
more about that. And then Timmons
also mentioned there are some plans in the region
for emissions reductions. I think that these are
pretty much voluntary, so I don’t think that there’s
a really strong commitment. But I think as I
mentioned, it’s also a region that already
has very clean energy. But this is kind of interesting. It’ll be interesting to see how
the Latin American countries align with China on this. There are also some
challenges that are common to many developing
countries in that we can talk about in terms of
China and Latin America. So just to give two examples,
fuel efficiency standards. Fuel efficiency standards are
extremely important in terms of reducing oil demand. The US oil demand has
come down substantially since it peaked in
2005, and that’s basically because of improved
fuel economy standards. Latin America basically has no
fuel economy standards at all. Mexico was the only country that
just introduced them last year, and then China is
also a new area. So I think this is a
really important area where they face similar challenges
and need to do more. And then similarly
with carbon markets, this is sort of a nascent
initiative that’s happening in a couple of countries. You’ve got carbon
taxes that have been very recently introduced in
some countries, carbon markets, and that’s something that we
see in Latin America and China. And then there are opportunities
for technical cooperation. I think there’s not a whole
lot going on right now. We did a report that I
had brought some copies about Chinese investment
in Brazil’s energy sector. We looked at oil and gas
renewables and transmission. And I think that there is this
China-Brazil center that’s cooperating on renewables,
but it’s still pretty small. We found that,
for the most part, the investments in renewables
in Brazil by Chinese firms were extremely limited,
but it was mainly because the conditions
for investing in renewables in Brazil aren’t
good for any firm really. So there’s not the
right incentives. There’s a lot of distortions
because of prices, the way the tariffs are set. It’s not a very stable
environment for investments, so that affects Chinese
firms as well as other firms. And I think this
is the last slide. So China is slowly
increasing investment in low-carbon technologies. So there has been some
expansion in this area even though I said
that it was limited. But hydropower is the main
area where there actually is a lot of Chinese
investment, especially State Grid is investing in
a transmission line that’s going to be bringing energy
from a major hydro project. Other renewables, as I
said, it’s more limited, but there is some
growing investment in Chile and other
places, and then also nuclear with
Brazil and Argentina. So I will wrap up there,
and I’m sure there will be a lot more to discuss
in the next session thank you. [APPLAUSE] Well, so, thank you very
much for inviting me to this interesting conference. As Lisa has given us a good
picture of GHG– Greenhouse Gas– emissions
in Latin America, now I would like to
provide some examples on how the bank, the
Inter-American Development Bank, is contributing
to the region and how Chinese investments
are included in those projects. Firstly, the Inter-American
Development Bank is helping its borrowing
member countries, basically 26 Latin American
and Caribbean countries, adapt to climate change impacts
and review greenhouse gas emissions through
lending operations, technical cooperation,
and knowledge generation. The IADB’s response
to climate change focuses on land
use and forestry. As we have seen previously,
forestry degradation is a huge source of emissions,
agriculture and livestock, energy efficiency, sustainable
urban transport, water resource management and sanitation,
and also renewable energy. I would like to highlight
about that, by 2015, 25% of the total bank
lending support operations in climate change,
environmental sustainability, and sustainable energy,
it’s a huge target for lending operation,
which has no precedents. The IADB is working to meet this
25% goal through its climate change strategy that
promotes the development and use of a range of public
and private-sector financial and non-financial instruments
to enhance the region’s institutional, technical, and
financial capacity to address climate change. It also provides guidance
for the bank’s dialogue on regional and national
climate policy agendas with governments, private
society, and private sector, and civil society. Regarding mitigation activities
promoted by the Inter-American Development Bank, I
would like to highlight some of the
operations of the bank to give you an example on the
importance of collaborating not only internally within different
divisions within the bank, but also extending outreach
with different governments, development banks,
and multi-donor funds in order to achieve resource
mobilization for greenhouse gas emissions reductions
projects that also contribute to quality
of life and private sector participation. So firstly, we have
the Ecocasa program, which is a sustainable
housing program in Mexico. Last year, exactly last
year on November 20, the United Nations Framework
Convention on Climate Change awarded the Ecocasa
program a global example in the fight against
climate change. The Ecocasa program
supports the construction of 27,000 efficient
homes that will help to reduce GHG
emissions by at least 20% compared to conventional homes
while improving quality of life and low-income families
who live in these houses. So Ecocasa, it’s a good
example of collaboration, of resource mobilization
from different governments, development banks,
and multi-donor funds. It is involve IADB Bank,
some resources from the Clean Technology Fund,
German industry, and European Union’s Latin
American Investment Facility. Both are administered
by the KfW, which is the German development bank. This is a loan for $49.5 million
and has an estimated target to reduce 1.1 million
tons of CO2 per year. A second project that I
would like to highlight is our recently approved loan
through the Clean Technology Fund. This is the Geothermal Financing
and Risk Transfer Program. The risk mitigation
and financing program will apply innovative
geothermal financing schemes such as guarantee and
insurance mechanisms to reduce risks associated
with exploration of geothermal energy,
one of the main obstacles to the development of this
clean energy source in Mexico and also in Latin American
and the Caribbean countries. This is a $31.5
million loan that could reduce approximately 1
million tons of CO2 per year in a period of six years. A third project is the
promotion of development of local solar
technologies in Chile. This is a global environment
fund, the GEF fund, that approved funding for these
projects that will contribute to support transfer
of technology to develop the solar
industry in Chile by reducing technology and
financial barriers that prevent the development of this
type of technologies in Latin American countries,
promote a market approach, and encourage the participation
of the private sector, and provide the necessary
policy regulation. This is $2.7 million
and is assumed to be provided on a
non-reversible basis. And it has an estimated
emission reduction potential of 1.1 million tons
of CO2 per year. This is a good example to link
Chinese efforts on the climate change agenda. As a result of the
promotion and development of local solar
technologies in Chile, the IADB is now
working on preparing two loans for the private
sector to implement solar energy in Chile
with Chinese resources. Another Chinese example,
participation on clean energy has been made through a
private sector loan approved by the IADB for up
to $132.6 million to partially
finance construction of two wind farms in Uruguay. Financing includes $88.4
million from the bank’s ordinary capital
and $44.2 million from the China coal
financing fund for Latin America and the Caribbean. The project aims to contribute
to the diversification of Uruguay’s energy
matrix and will help to mitigate the
vulnerability of the country’s electricity sector to variations
in hydrologic conditions and reviews CO2 emissions by
an average of 300,000 tons annually. Then, regarding to
knowledge generation, Chinese contributions
to public sector have been promoting
institutional capacity as threatening. For example, by promoting
knowledge and capacity building through the regional
policy dialogue, which constitutes one of
the IADB’s main mechanisms to promote knowledge sharing
between high-level government officials from Latin
America and the Caribbean and experts in key
development areas. This dialogue covers the
strategic topics for the region through its 17 networks. To mention some, we have the
Water and Sanitation Network, Climate Change Network,
Education, Energy, Disaster, Risk Management Network,
Gender Equality, Transport, among others. To give you an example of these,
last year’s policy dialogue of the Climate
Change Network was focused on mainstreaming
climate change into urban public
housing programs. It has already mentioned
that urbanization in Latin American countries
has been increasing rapidly, so there were some
high-level policy discussions that based on opportunities
for promoting development. On one hand, sustainable
public housing, which comprises energy-efficient materials,
energy conservation, and energy efficiency, and
also land planning and density and public sector. On the other hand,
receiving public housing to adapt to climate change. Next year’s dialogue
will be focused on urban planning and its
role on climate change mitigation and adaptation. This topic becomes
an important issue to bring together
national-level authorities with local governments in order
to analyze the main drivers for increasing greenhouse
gas emissions in Latin America and the Caribbean
due to the rapid urbanization and motorization rates and
inadequate mass transit options and large commuting distances. This is another example
of Chinese experience that could provide support to
Latin America and the Caribbean to tackle climate change. Referring to the
transport sector, as mentioned by Mr.
Roberts, we are currently developing some
technical corporations with Ecuador and Paraguay,
assessing clean vehicle technologies for mass
rapid transit buses. The studies will compare
electric and hybrid buses, and also trolley buses in terms
of GHG emissions reductions, performance, and
capital investments. China is well known
for being [INAUDIBLE] of these electric buses, and
can create a great opportunity for future collaborations. As highlighted by
Guy, now, at least, we have low emissions
development strategies to contribute to a
low carbon pathway. So finally, in
this topic, the IDB is working on giving support
to the low emission development strategy initiative. In Latin American and
Caribbean countries, it’s called LATS LAC which is
a community of practice that brings together leaders of low
admissions development in Latin American and the Caribbean
international institutions. It is a platform for changing
experiences, best practices, and lessons learned. So you’re very welcome
to enroll this platform. To conclude, I believe
there are many opportunities for collaboration
between China, Latin America, and the
Caribbean countries, not only for capacity building
activities, technology, transfer, deployment,
and local development of those technologies,
but also to work together on a low carbon path
and climate change. Thanks. [APPLAUSE] Thanks very much San Joon. Rebecca, would you
like to join us? Before you get started, do
you have a Twitter handle? Do I have a Twitter handle? I’m sorry, I don’t. Does BU? Yeah, he does. But I’m afraid it’s
brand new, and I don’t know what the handle is yet. I’m sorry. So good morning, everybody. Thank you for joining us. A special thank you for
everyone who’s here in person and braved this icy, New
England morning to be with us. My name’s Rebecca Ray. I’m a research fellow
at Boston University. And today, I’m going to
share with you some brand new preliminary results from
a multi-year study that Kevin Gallagher and I are
just finishing up, funded by MacArthur and Mott. It’s an eight country case
study intensive project looking at the social and
environmental implications of Chinese involvement in the
economies in these eight Latin American countries. And today, in this
presentation, I’m just going to focus on the
environmental aspect of it, keeping up with our theme
today, specifically, in these three areas– GHG
emissions, water footprint, and deforestation. And our data shows that exports
to China from Latin America are much higher in their
greenhouse gas intensity and in their water footprint, as
well as in their deforestation implications. The Latin Americas exports
elsewhere in the world. Lisa has already showed you
this in terms of the investment, incoming money. But also, in terms of
trade, it’s the same story. If I have time at
the end, I’d also like to share some of
the best practices, some of the good news
that we’ve learned from various countries
in the region, as well as Chinese Lenders
and NGOs in the region. As Lisa’s already shown a
US similar chart to this, looking at investment. But here’s the trade
side of things. Along the bottom, you’ll see,
we have LAC exports to China to the right, to the world as
a whole, and Chinese imports. As you can see in
the middle column, all that, the American
exports, are fairly balanced between ag,
extraction, and manufacturing. But LAC exports to
China are overwhelmingly concentrated in extraction. And we have ag secondarily,
whereas Chinese imports are overwhelmingly
concentrated in manufacturing. So this story of concentration
from Latin America to China is actually quite unique
for that relationship. And that’s going to
be the basis for a lot of the rest of my presentation. When we move on to greenhouse
gas and water intensity, like I said, we see along the
bottom all economic activity, all Latin American exports,
and all Latin American exports to China. And we can see that
the greenhouse gas intensity of those
exports is higher for Latin American
exports to China than for the rest of the world. Also, the weather
footprint is much higher. And the reason for
that is Glen Peters at the University of Oslo, he’s
put together fantastic data, looking at the greenhouse
gas intensity of production by sector and country. We can combine that
with UN trade data to look line by line at the
sources of greenhouse gas emissions in train flows. And this includes embedded
upstream emissions, so land use change,
for example, as well as if we’re talking, for
example, about ranching all of the inputs to that
are also taken into account. You might be surprised. We tend to think of
greenhouse gas emissions as primarily an
industrial thing. But in Latin America, the
largest, most intense sector for greenhouse gas emissions
is actually ranching. We see the major factors
here, the second column is the greenhouse gas
intensity for each of them. And from the
Peter’s data, we can see that the highest greenhouse
gas intensity sectors in Latin America is ranching, with
actually, surprisingly perhaps, wool being the absolute
pinnacle of greenhouse gas intensity for the region. And going to the
right, we see they are shared, the share way
sectors over the last decade in all exports from Latin
America and exports to China, specifically. If we look just at
the highest greenhouse gas intensity
sectors, that would be the first four of those. Those comprised in 2002. They comprise 30% of exports
to the world, but nearly 70% of exports to China. And that gap has
actually continued. It’s closing some, but it’s
rising in both of these export markets. In 2012, the highest greenhouse
gas intensity exports to the world as a
whole had grown to 43%, but had grown to over
70% of exports to China. So this is an intensification
of the commodity basket towards more intense things. I’m afraid half of those
text boxes didn’t show up, but I’ll walk you
through what it is. Exports are obviously only
half of the trade relationship. If we take into account
imports as well, we have to take into account
the fact that the greenhouse gas intensity of Chinese
exports to Latin America are actually even higher
than the greenhouse gas intensity of Latin
American exports to China. So all of the products, or
as the basket as a whole, Latin America’s
imports from China would have a lower
greenhouse gas intensity if they were produced
domestically in Latin America. So if we take into
account, the red line is embedded imports from
China to Latin America. This middle line is embedded
in Latin American exports to China. So as you can see, the
greenhouse gas emissions from imports to China are
actually higher than those from the exports to China. So the import story is
a very important part of the overall greenhouse
gas intensity of the trade relationship with
China, that the imports of manufactured
goods from China is a huge part of the overall
demand based greenhouse gas emissions from Latin America. Moving onto water, as I
said, it’s much higher when it comes to
exports to China than to the rest of the world. As you can see, that varies
dramatically by country, especially in Argentina
and Brazil is largely where that concentration comes from. And it’s because of the
enormously soy plantations and the enormous
ranches primarily, is what we’re talking about here. Obviously, that
does not hold true for countries that are
more manufacturing driven. But again, we can do a balance
of payments type analysis and look at the role of
imports, as well and exports. And we can see, I
have references there for the volume of
the Three Gorges Dam, as well as the volume
of Lake Nicaragua. So we can see in
general, currently, as of 2012, Latin
America was importing about the volume of
the Three Gorges Dam every year, just in embedded
water in their imports. But they were exporting
about 1.5 times the size of Lake Nicaragua in
their exports to China. So the water locally that’s
being sent to China embedded in the exports is much higher. I’m going to end by talking
about deforestation, which several one
of the speakers today have already talked about. It’s a crucial part
of the climate story, especially in Latin America. Research from
renowned ecologists have pointed very directly
to the most important source of deforestation in
Latin America is not just the extraction projects, is not
just the dam projects, but is the roads getting there. Overwhelmingly, this is
all roads, all railroads, all commercial waterways. That is the source
of the deforestation. And the mechanism is
that it brings humans. It brings ranches, it
brings small settlements. This is especially true
in countries like Ecuador, for example, that
border places that have civil unrest until you have a
lot of displaced people coming out from the border and
looking for places to settle. If there’s brand new roads
opened up into the jungle, that’s where they settle. A great or rather
depressing example of this if the famous
Repsol Block 16 in Ecuador. This is often considered one
of the most progressive setups in the region in terms
of extraction projects. It’s a nearly
roadless development in which the only roads into
and out of the extraction site don’t connect to the rest of the
highway system in the country. They connect only to a river. So everything coming in and
out has to go through a barge. But even so, estimates are
that within the next 50 years, that within the 2
kilometer border of that road from the
river, 50% of the jungle will be gone within 50 years,
just from human settlement. So these roads really are the
crux of the deforestations. Or if you want to talk
about deforestation, you can’t just talk
about the massive soy plantations in Brazil. You have to talk
about the access roads to get those to a port. And what we’re seeing more
and more in the region is Chinese financing
of these accessorants, of these rail roadways, to get
these products to the ports to get them back to China. If you want to talk about
the most important pieces to focus on deforestation
in the region, this is a fantastic
map that was recently published by Bass et al. All the reference is up there
on overlapping biodiversity hotspots. So they have four groups of
species, mammals, plants, amphibians, and birds. Where there is red
on this map, that is a place that is a
biodiversity hotspot for all four of those groups. And it scales down to
green is everywhere that there’s a biodiversity
hotspot of one of those groups. And now, I’m going to overlay
on top of that Chinese financing in the region. Now that you know that roads
are the biggest danger, the black lines are Chinese
finance highway systems that are coming in. The grey is Chinese
financed railroads. This light blue here is
Chinese oil concessions. Obviously, that red is
the most important place to talk about conservation. And these triangles
are mines, which are less concentrated in
those super important areas. These brackets are dams and
new commercial waterways that are being financed. So these are the
very sobering picture of where we’re headed next,
because these are not realities yet. These black and grey
lines are financed, but have not yet been developed. So this is where
we’re headed next in the deforestation story. When we talk about
best practices and where the bright spots
are looking in the future, because there is good
news in that region, some of the countries
in our case studies have really shown us
examples that we can learn from the NGOs, can learn from
in different countries to say, well, we can learn from
our neighbors who are doing this thing very successfully. One of the most important
things that NGOs have been doing to push
against deforestation is to push for
community consultation. And there have
been huge advances. And community consultation with
local communities as projects advance into forested
areas and compete with traditional livelihoods. Bolivia, Peru, and Ecuador have
all new legislation about this. Bolivia and Peru have
really shown us tremendously successful community
consultation programs. In Bolivia, they’re
bringing online their new world’s
largest lithium deposits, which are huge for anyone
talking about climate. You can’t talk about
climate without talking about lithium deposits. Bolivia is holding the line
with community consultation. And we are seeing that
Chinese financed lithium mines and development
plants, processing plants are being located in communities
that are accepted but are minimal to them,
and therefore, going to have a lower deforestation
impact and a lower traditional livelihoods impact. So that is very good news. And moving onto Brazil, we’re
seeing very innovative changes in their regulatory regime
when it comes to financing. Of course, in Brazil,
public financing is very important to all sorts
of industrial development. And while in the past,
polluters have been able to tie up in the courts fines
from the environmental ministry for years to be able
to just either consider those fines just another
cost of doing business or put them off for many years. But now, there’s this
innovative lending rules from the
public banks saying, if you’ve ever had any
environmental irregularities, or if you any environmental
irregularities that are still stuck in their courts, we
will not lend you any money. And this is especially
important in Brazil, where the Chinese involvement
story is one of exporting soy. It’s not too much investment
in new extraction projects, for example. So these are
Brazilian plantations that are getting public
financing for the expansion of their projects. But they’re not going
to be able to do it if they’ve had deforestation
finds that are still pending, for example. And that is great. It’s great news to see that. And Peru is the first
Latin American country to join and become compliant
with the EITI, which is the Extracted Industry
transparency Initiative, where the reports of flows of funds
from extractive companies to the government from any
agreements with communities have to be published
internationally and verifiable. And since corruption is one
of the worst places where these legal frameworks fall
apart, that’s a huge advance. And the Chinese mining
companies, as of very, very recently, just
within the last few weeks, have become compliant
with it, as well. So this is a huge step
forward in transparency, which is a crucial part of
the deforestation story. In China– and I hope
we’ll hear more about that very soon as the day
goes on, new green credit initiatives coming out of
China, putting requirements on their firms going
abroad about living up to the environmental
standards of the countries where they’re operating. And finally, NGOs, [SPEAKING SPANISH] These two organizations
from Ecuador and Peru have done phenomenal work
of connecting communities that are affected by these
firms with the Chinese lenders back home in China so they
can send back information to those lenders about whether
or not these firms are living up to their standards, which
is a phenomenal innovation in terms of networking
and coming together. Finally, I want to end
with one more chart, which is Latin American countries
have a lot of leverage when it comes to setting their
ground for these industries. And the reason is that these
resources are very location specific. As Lisa shared earlier,
these are the five most important exports
from Latin America to China in order of
importance– refined copper, copper ores and concentrates,
iron ores and concentrates, soy, and crude petroleum. And in each of
these categories, we can see up the y-axis is the
market share of world trade that Latin America accounts for. And just as an example,
when it comes to copper, Latin America
accounts for a quarter of all world imports of China. It originates in Latin America. Overwhelmingly, that’s Chile. They account for 1/3
of the copper of China, which means they have
tremendous negotiating power, tremendous
bargaining power that they can bring to
the table and enforce those environmental regulations. They don’t need to worry about
chasing away demand for copper, because they account for
1/3 of China’s imports. It has tremendous market power. It’s much greater when
we talk about copper ores and concentrates. Over half of the world imports
of copper ores and concentrates comes from Latin America. Similarly, of course,
you can’t talk about this without talking
about soy and Brazil. Brazil accounts for such a huge
share of China’s imports of soy that they can set the
environmental ground rules. They have the negotiating
power for this. So I’m going to end
there on that happy news to turn it over to
the next speaker. Thank you so much. [APPLAUSE] Great. Thanks very much Rebecca. Rachel, would you– Yeah. Thanks very much for
the previous speakers for outlining very
exciting instructor analysis for the low carbon
future between China and Latin America. I’m going to be
bringing a more case study that I did for my master’s
thesis research, what I’m doing, I’m completing my
researching University of Texas at Austin. What I’m doing is I’m looking
at hydroelectric, hydropowered development that China
is financing and building in Ecuador right now. So the government of Ecuador
plans to generate more than 90% of its electricity
from hydropower between 2016 and 2020. And China is financing
and constructing up to more than 10
new projects there. But those projects
are generating numerous environmental
and social protest. So I did empirical
field research in one of the biggest ongoing
hydroelectric project China is constructing
right now in Ecuador, which is the Coca Coda Sinclair
Project, which is not a dam. And they started in 2010. So the export and
import, Bank of China provides 85% of finance for
the $1.7 US billion project. And the inauguration of the
biggest hydroelectric project, which is CCS, as I will
refer to later, in 2010, kicked off a new
face of cooperation in infrastructure building
between China and Ecuador. And I will give
two case examples to demonstrate the ways
in a low carbon future and more environmentally
friendly operation can be achieved between
Chinese protects in Ecuador, and also, some of the
challenges and obstacles lying ahead in doing so. So my case studies
concentrate on the interaction between Ecuador government,
its public agencies, the Chinese state companies,
and in environmental issues, and the implications for
responding to climate change. The first case will
trace the design for the project,
which will likely lead to positive
outcomes for reducing deforestation due to our
better coordinated effort. This map, you can
see, is compiled by the NGO, which
Rebecca just mentioned from the Centro Derechos
Economicos Sociales in Ecuador. And they mapped some of
the biggest projects, including hydropower, and
infrastructure building, and other mining projects
in Ecuador, which is huge, as you can see from the map. But here is another picture
of the direct environmental impacts that people
often talk about when they refer to the Coca
Coda Sinclair Project. So when I try to
access, I want to try to assess the environmental
impacts of the project. I observed that over the course
of the project construction during the past five years, the
public criticism and concerns over the environmental
impacts of the project have reduced considerably. I think initially,
the biggest concern was the destruction of the
tallest waterfall in Ecuador. Right now, you can
see from the picture that I took when I was
doing research there. This is the San Rafael
Waterfall of Ecuador. So the concern was that after
the project was completed, there will be reduced amount of
water flowing to the waterfall, and then until a level that
will completely dewater this entire beautiful scene. So right now, hardly any
criticism of the project concerns this issue. My research provides
me some of the ways to observe why this happened. And I think there are two major
reasons contributing to this. First of all is the
Ecuadorian government’s environmental consciousness and
their really strict supervision during the construction
phase of the project, as well as Chinese companies
adapted to strategies to the higher
environmental standards in the hosting country. So in fact, during the
project construction phase, the Ecuadorian public company,
which presents the Coca Coda Sinclair dam, and the Chinese
designing firm for the dam coordinate to manage the
environmental impacts and deforestation of the surface
vegetation and watershed. So the Ecuadorian state agency
strictly controls the design and avoids damming
the river, and avoids taking large areas for forest
in the northern Amazon, where the project happens. So under the current
design, which you can see from the
slide, a diversion dam directs water through
an underground tunnel so that instead of
permanently reducing the water level of the
river, the amount of water will only be significantly
reduced during dry seasons, because it’s a divergent
that does not completely dam the river. And it directs the
water underground, which avoids deforestation
on the surface level of the forest. So due to the explicit goal
to protect the watershed, both Ecuadorian state company
and the Chinese design firm have placed environmental
standards and impacts in a more prominent
role for consideration. And besides, the Chinese
state construction firm, which you can see now, is
their base for operation for the CCS Project. The Synohydro company has
adapted considerably also to the local
environmental regulations in terms of constructing
the residential compartments and the actual project
sites for construction. For example, as you
can see from the slide, the design of the main camp
for administration offices and housing for the project
went through multiple versions of change and improvements
to fit the National environmental standards for
construction compartments, and the company’s
operation are also under very strict supervision
by a CCS public company from Ecuador and the
third party supervision company from Mexico. However, as we know, the large
resource extraction projects, and also infrastructure
building projects do directly cause large
scale deforestation, as Rebecca mentioned,
especially when people open up new roads and construction
sites in some part of the primary rainforests. As you can see in the picture,
for example, although, according to the contract,
which is the one, the sites for project
compartments and roads will be restored after
the project is completed. But when I did interviews
and observations on the site, it reviews that. It remains very
ambiguous whether or not the local government wants to
keep the compartment facilities for community building and
for hosting more people who will likely move to the area for
better chances of livelihood. So if they do keep those
projects and facilities, it means that we will
lose more rain forest coverage in Northern Amazon,
which will likely have a larger impact on climate
change and carbon absorption in the long run. And this is another picture. You can see when they
open roads to build those hydroelectric projects in
different parts of the forest. So my other case study suggests
how Ecuadorian government are environmental advocates and
Chinese companies are situated in the debate for environment
protection and climate change. I hope this can help us imagine
some of the possible spaces and strategies to reduce
high impacts and high carbon emission in the near future. So one of the emerging
environmental concerns at this concluding
phase of the project happens around the
route of transmission for the electricity that will
be generated from the project. The electricity corporation
of Ecuador, which is Celec, contracted the Chinese state
company, Harbin electric international, to
build and operate the transmission aligned
for the CCS Project. Since the transmission
line will go through, will cause very, very
large scale deforestation where it goes through, and adversey
affect climate change, contestations arise because
the proposed electricity line, as you can see, which
is the red line right now, will partially go through
a UNESCO Sumaco biosphere reserve. And the environmental
activists and conservationists in this area affected
by the transmission line have been negotiating
with the electric company Ecuador, which is Celec. They have proposed a
new transmission route, which will avoid going
past this reserve directly, and will also reduce some of
the volcanic and seismic risks. As of now, the
Ecuadorian company, the state agency Celec, has
signed an initial agreement to change the route due
to the pressures given by private stakeholders. However, the Chinese company,
Harbin Electric International remains very passive,
and was not even involved in the
decision making process. So when conservationists
and environmental activists negotiate with Celec, the
Chinese company, Harbin, is not included in the process. And the discourse in sentiments
has that they are only the contractors of the
project, and they do not have the rights to change
the route of the transmission line or the plans that the
Ecuadorian government has. So this very picture
depicts one of the conflicts between a team of
geologists from Harbin who went out to the
proposed transmission ground site for our geological survey. And they accidentally
invaded an area of private land reserved for
conservation and wildlife observation. Now, the owners of
the conservation site are negotiating with
Celec to change the route. And they’re also
seeking legal actions against those Chinese invaders,
who are not necessarily informed about the changes that
the government is negotiating with the private
entities about the route. So the ongoing
construction of CCS Project and its transmission
line briefly reflect some of the
environmental concerns and different rows
that Ecuadorian state, its public agencies, and the
civil society and Chinese state owned companies are playing
in this entire game, or in this entire planning
for the future of a low carbon development. On the other hand, I find
that civil society advocates seem to have some leverage. And as Rebecca also suggested,
that the government has a lot of control
over policies that will reduce higher environmental
constitutes, climate change. But on the other
hand, there seems to be a lack of coordination
between Ecuadorian public companies and their
so-called Chinese contractors or partners, in terms of taking
concrete actions to reduce carbon emission or other,
more impactful operations. So although Chinese companies
have improved and adapted considerably to higher
environmental standards in Ecuador. Currently, they remain
very passive in responding to emerging concerns over
global warming and a low carbon future. It becomes very problematic
if the Ecuadorian state and Chinese companies maintain
this model of corporation around the environmental
impacts, carbon emission, and climate change, because
especially considering the models of
cooperation are moving to other areas for
imminent carbon intensive projects, such as
mining, petroleum, exploration, and other infrastructure
building projects. So my research suggests that
both Ecuadorian government agencies and the
Chinese partners need to cooperate
and collaborate more to achieve other goals in
reducing environmental impacts in those emerging infrastructure
and resource extraction projects. Thank you. [APPLAUSE] Great. Thanks very much, Reggie. If I could ask the speakers
to come back to the front and invite Dr. Gao Jian to come
and comment on the speakers, that would be fantastic. So let’s– Gao, please. Thank you, Professor,
for inviting me here. I was here actually
three weeks ago in this room for a speech on
Chinese investment in Africa and the development aid
elsewhere in the world. So this is a different subject. And I think maybe I made
some of the remarks. It’s hard to see the issues
currently of the environment, even though they
impact conference has finished in Beijing. And Chinese people, Beijing–
I’m the resident of Beijing. We’re called the APEC Blue Sky,
because the government removed all the factories
and all the factories in the surrounding promises. And as a resident in Beijing,
the first thing I think is the air in Beijing. But 30 years ago, when
we started to reform, we never thought about the air. We thought about how
we can have a house, we can even have a rental house. Very limited space of life,
living standard improved. We think about the air. And that is natural. And perhaps the first priority
for the central government in Beijing is
apparently with the air. But it is difficult,
because Beijing removes all the factories away, and
the surrounding provinces still has emissions. It’s a big problem. And then I understand China
has the largest carbon emission countries. But imagine, China
is a world factory. And all the consumer
goods American consume, enjoy,
they are produced in China that has a consequence
of the carbon emissions. And I found $600 to $1,000
in Chinese factories less than $20, the wages. But still, we have the
consequence of the environment. So China produces a majority
of the consumer goods. And then it becomes
a world factory so that Europe and Americans
can enjoy relatively better air. But maybe, this argument
is not welcome here. But I’m not a politician. I’m retired. I used to work in the
[INAUDIBLE] finance for many years, and
I moved to the bank. I’m the government officials,
but I’ve retired now. I’m the outside observer
to see the issue. Anyway, I think the
environment is important. China needs to pay
greater attention to that. We folks are on the
Latin America now. But China development back, and
the largest investor overseas was invented a lot in Africa,
Middle East, western Europe, central Europe, Eastern Europe,
Russia, Asia, elsewhere, were not focus on the entry
resources and commodity. I traveled to all these regions
except for Latin America. So when you invited me here,
I feel a little bit reluctant, because I feel
vulnerable for criticism, because Latin America is the
only region I know in travel. But I’ve been to some countries
where I can say something. The president,
ruler, which is where the headquarter of
the city is– twice. And the president of
Venezuela, [INAUDIBLE] the city headquarter three times. So when you talk about
a Chinese regimen, it looked like Chinese banks
and companies are [INAUDIBLE] and this is not the
culture [INAUDIBLE] for their own profit. But that is not true. In Latin America, that is a
country to country cooperation. It’s a bank to bank
cooperation that is based on the
comparative advantage. Latin America, they don’t
have other projects. And so they will
have some commodity. I think that is the emission
of the local government, not the Chinese government, and not
the Chinese development bank. I’ve been to Latin America. I personally met with the
current president of Mexico when he was the governor
of New Mexico state, and he [INAUDIBLE]
Hong Kong, Beijing. Or maybe we talked
a lot about it. So the first thing local
country thinks about is economic development. That is their
political perspective. This is the priority. So they will initiate
some projects. All of the countries
around the world, when they start
economic development, they have the
accumulation of capital, but in different models. In Europe, 200 years ago,
they focused on the trade colonialisms, slaves. And I read the new
book, American Slaves in the 19th century, from
1900– is it from 1800, 1860s– the 60 years build up
the base of the US capitalism. That is, initial accumulation. And China is relying on the
exploration of the farmers and the depositors. The depositors has in real
terms, [INAUDIBLE] return. And the farmer have very low
prices in the government, and they have cheaper
lands, and cheaper money. So it accelerates the
investment, the accumulation of the capital. So China’s city
primitive has come up, imagine they accumulated
very quickly. But some customers, like
Russia and Latin America, they have the advantage of
resources and commodity. So they want to
develop faster, not to use financial depression. This is their comparative
advantage, to develop faster. So we need to find the roots
of the [INAUDIBLE] problem. So when we talk about the
environmental problems, we need to think of political
logic, economic logic, and the environmental
logic to come into line. This is my first view. Second, China going abroad
is a kind of rebalancing. Not just a great deal
of Chinese firms. This is a government
public, because we’ve drawn a kind of account separate. And we have to balance
our external account by the capital content deficit. So we make the balance
payment balance. So this is the strategy. So we have money accumulated. We need to invent. But there are a lots of
demand for that– Africa, to get rid of the
colonialism, tribal fighting, and that this
[INAUDIBLE], they start to think about
economic development. We invested in Eastern Europe
because Eastern Europe always looked westward. And then when they discovered
the financial crisis, the West cannot support
money for their development, they look eastward, to China. So all the presidents
came to Beijing to see. And then they asked for the
money for the investment. And China’s investment is
at four different levels. The first is government
to government. And we have government
assistance that is small, because that’s from the budget. We have the action
banks investment that is substantive as a government. And we have the bank level that
[INAUDIBLE] China Development Bank and other commercial
banks like ICBC, CCBB will see that they own the
largest in the world in terms of assets. And they invest in the region,
but under the directory of the government guidance. They always sign the
agreement with a witness of the leaders of
the local government and Chinese government. So this is just
the way they do it. And a certain level is state
only, the conglomerate. You can use a vehicle,
the constructors, and the operators, and
there are many others. And they are a private company,
like [INAUDIBLE] and JT. And they will come to these
small private companies. When we see the environmental
issues, this private company issue, they’re not under the
direction of the government. They go to somewhere
on their own, even without the notification
to the local embassies. And this is a problem
we’ve discussed many times. So the [INAUDIBLE] companies are
small, private companies, not SOE. Because SOE– one
minute– the SOE, they’re not sick for the
mathematics and prophet, because the major
salaries is control. The solution is again,
the political logic, economic logic, and
environmental logic come into line. I think we have a lot
of new initiatives. And this conference
is very important. We had a conference just
two months ago in Brazil, in St. Paolo, and it was held
by MIT, and China, and Latin America. This is a subject not focused
solely on the environment. And I was a speaker
in that conference. And I think this
conference very important to draw the attention to
the environmental issues, just like CDP and many times
companies, local government, start to realize the
importance of the environment. This is very important. And CTP has, what we
call responsibilities. We need that. And the
responsibilities, we need the work of the local people. So we invest in a lot in Africa
in agriculture, irrigation, residential housing, small,
medium sized enterprise, and micro financing. So every single on
this [INAUDIBLE]. We’ll continue to do
that in Latin America. We have less discussion with
Latin American countries, because this is far away. We take about 30 hours, two
trains from the US to China. So this is a very time
consuming, less discussion. I think this kind of
conference should be held more in China, in Latin
American countries, and that the local government
of Latin American countries need to shift their
attention to the environment. And also, they need to
introduce updated technologies. And I think the project
invest in Africa for the hydro electricity is a good example. But maybe they have many others. And the Chinese
government and the CDP would definitely
like to go that way, like we committed in China. And after I return to Beijing,
I will talk again with them about the investment
in Latin America. I think we can do a lot by
the multiple initiatives from the academic and
from the local government, from China’s government, and the
[INAUDIBLE], and many others. It’s concerted effort
towards that direction. I think that is it. So this is the right time
to have this subject. Thank you. [APPLAUSE]

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