Guiding Chile toward a sustainable future

The European Union is clearly taking climate change seriously and many of its member nations are mounting aggressive campaigns in response to this threat. The majority of these efforts place an emphasis on identifying and deploying renewable energy alternatives to fossil fuels.

Countries in Africa and Latin America, heeding scientist's predictions that they are among the areas most likely to be hardest hit by the impacts of climate change, are also taking actions.

In Chile, elected officials are taking a somewhat different approach to the problem. They realize that the private sector must play a major role in coming up with solutions. However, in order to provide the best assurances that those solutions will lead to a sustainable future, they must be framed and guided within an appropriate legal and regulatory framework. (GW)

Official: Chile may become regional environmental leader

By Eva Medalla
Business News Americas
Friday, April 27, 2007

Chile may become the Latin American leader in environmental sustainability due to the strength of its regulatory framework, the VP at the World Business Council for Sustainable Development (WBCSD), Julio Moura, told BNamericas.

According to Moura, Chile has a number of factors that favor environmental sustainability, including a strong legal framework, an increasing number of sound environmental regulations and authorities, and good relations with national and foreign investors.

The country's environmental diversity is also interesting, as authorities are creating different regulations taking into consideration the wide-ranging climates throughout the country, he said, adding that this could also help Chilean authorities lead the way toward sustainable development.

PREDICTIONS

Experts have predicted strong climate changes at a macro level, and there is no data to build predictions at a regional level, said José Goldemberg, co-president of Global Energy Assessment for the International Institute for Applied Systems Analysis (IIASA).

"If the planet is in a state of emergency, the same happens with the financial sector," said Moura, calling on people to help mitigate the effect of pollution on climate change.

At the WBCSD, companies are grouped by sector, and that is likely how the world will start operating after 2012, when the Kyoto protocol ends, he said, adding that carbon credits rankings are likely to operate per company and not per country, as now.

Although the world's natural resources are at stake, there are some companies that have more responsibility over the damage than others, and they all need to work together to reduce this, he added.

According to Moura, companies should have both an environmental and a social license to operate, the second one being an intangible product developed through each firm's values and operations.

A strong legal framework and expeditious reaction time on the authorities' part have become absolutely necessary to achieve sustainable development, he said, defining sustainability as the "positive balance of economic, social and environmental issues."

REACTIONS

Companies must adapt to environmental needs and regulations or they will end up dying, said the Chilean minister of mining, Karen Poniachik, adding that companies operating at a local level are working hard to reduce damages and find environmentally friendly energy solutions, but that there is still a long way to go in this matter.

"Climate change is restructuring the way business is done," said the minister, adding that, sometime in the future, investors will begin punishing those with heavy carbon emissions.

The longer companies wait to adapt to the new environmental standards, the more expensive it will become for them in the future, she said, adding, "if they do not invest now, the cost of doing so in the future will be too high."

But not all depends on private firms, as governments must provide stable frameworks and conditions, along with secure investment agreements, said Olav Skalmeras, president of Norsk Hydro Brasil.

According to him, there is still not enough support from the authorities, as some firms are not forced to find environmental solutions, or even to reduce damaging emissions.

ENVIRONMENTAL VALUE

Skalmeras pointed out that Latin America has more opportunities than the rest of the world for environmental improvements and damage prevention, because it is still environmentally sustainable.

According to Julio Moura, company and government officials must begin to identify environmental issues as a business opportunity, not only for the region, but also for the rest of the world.

Authorities should work to place a higher value on natural resources, making it more profitable to protect the environment than to destroy it, said Moura, adding that most of the world's biodiversity and drinking water resources are in Latin America.

He also pointed out the need to increase the value of carbon bonds, in order to promote improvements and prevent further environmental abuses.

According to the executive, who is also CEO and chairman of the board of GrupoNueva Chile, it has become absolutely necessary to protect water resources and work on reducing climate change, as levels of water reserves are becoming critical.

The cost of producing desalinized water continues to be too expensive in terms of energy and environmental costs to look at it as a solution, especially because, although it may help solve some water needs, it will not solve the biggest ones, he said.

Officials met at the World Economic Forum on Latin America, held in Santiago, Chile, where they discussed business strategies in climate change.