SIGNIFICANCE: Although Argentina and Chile make only a small contribution to global greenhouse gas emissions, they are already seeing the effects of global warming and, in the longer term, face challenges that include risks to hydroelectric production.
ANALYSIS: According to a report published in February by the Intergovernmental Panel on Climate Change, temperature increases in the southern part of South America are likely to be similar to average global warming. Changes in rainfall are more difficult to predict because of the overlapping impact of the El Nino phenomenon, the effect of the Andes Mountains and possible modifications of land use. However, several studies in Argentina and Chile have attempted to provide a more detailed picture of the possible changes:
• Depending on global levels of greenhouse gas emissions, temperatures in some parts of both countries could rise by as much as 5C by the end of the century.
• This would be particularly the case in the Andes Mountains where winter snow would be less likely to settle, depriving hydroelectric dams of an important reserve of water for use in spring, summer and autumn.
• In Chile, rainfall would drop sharply in almost all the country but would tend to increase in Argentina, causing flooding particularly in the northeast and centre of the country, including Buenos Aires, as well as along the Parana River. Coastal areas would also be affected by a rise in sea level.
Early signs. Initially, the land masses of the Northern Hemisphere are thought to be more vulnerable to global warming while, in the Southern Hemisphere -- particularly the west coast of South America -- the oceans are expected to have a postponing effect. However, some signs of climate change are already apparent:
• Retreat of glaciers. In Chile, a recent study of 100 glaciers along the length of the country found that 87% are shrinking, in one case by some 50 metres per year. Similar findings are reported in Argentina, where many glaciers are expected to disappear within 20 years.
• Extreme weather events. The severe flooding that occurred in Argentina's Santa Fe province in 2003 was identified as a possible result of climate change and, in 2004, the southern coast of Brazil was hit by a tropical storm that was widely hailed as South America's first hurricane.
• Dengue. A sharp increase in cases of dengue, a mosquito-transmitted fever, in Bolivia, southern Brazil and Paraguay has also been tentatively linked to global warming, following reports of a shortening of the mosquito's life-cycle. However, in Bolivia, it also appears to be the result of new breeding grounds in the form of stagnant water left by floods earlier this year (not attributed to climate change).
Economic impact. According to a report presented recently by the Geneva-based World Economic Forum's Global Risk Network, climate change together with deforestation and environmental degradation is one of the key risks facing Latin America. The report puts this risk on a par with economic shocks, threats to political stability and social inequalities. The report cites water supply, illegal logging and hurricanes as the main concerns but also suggests that a disproportionate part of the consequences may be borne by the poor (in a region in which income distribution is extremely unequal).
However, climate change remains only an incipient issue in Argentina and Chile. Debate surges when an international report is published -- or, for example, during the recent visit by former US Vice-President Al Gore as part of his campaign against global warming -- but then rapidly subsides.
As a result, there are few studies of the potential economic consequences. The UN Economic Commission for Latin America and the Caribbean, which has so far focused on extreme weather events in Central America and the Caribbean, plans to start more comprehensive studies, including the possible impact on different economic sectors, in 2008-09. The Chilean government would also like to carry out an analysis of the outlook for specific sectors but has indicated that financing may be a problem.
In this context, it is impossible to arrive at any reasonably accurate estimate of the cost of climate change to Argentina and Chile. However, it is possible to identify the direction of the impact on some key sectors:
• Hydroelectricity. According to a 2006 study by the Torcuato Di Tella Foundation in Argentina, hydroelectric output in the Comahue area of southern Argentina, which currently produces just over a quarter of the country's hydropower, would show a reduction of almost a third by the 2020s, due to a drop in river levels. Similarly, a study by the Engineering School of the University of Chile estimated that the autumn level of the Maule River in central-southern Chile, also important for power generation, could show an 80% drop by 2070.
• Agriculture. In Chile, projections of higher temperatures and lower rainfall suggest that significant investment may be required in new reservoirs and irrigation systems and that fruit farmers and vineyards -- important exporters -- would eventually be forced to move further south. By contrast, in Argentina, the impact would be mixed, with higher rainfall permitting a westward expansion of agricultural production to previously semi-arid areas (a process that started several decades ago) while flooding and increased climate variability would become an important hazard for farmers in other areas.
• Mining. Water supply is a key concern for mines in Chile, the world's largest copper producer, since most mines are located in the northern Atacama Desert. However, a recent climate projection by the University of Chile suggests that the Andes Mountains to the east of these mines would be one of the few areas of Chile in which rainfall would increase.
Economic opportunities. Under the Kyoto Protocol to the UN Climate Change Convention, Argentina and Chile, as emerging economies, are not obliged to reduce their greenhouse gas emissions but can sell carbon credits for climate-friendly projects to companies in industrialised signatory countries, which have agreed to achieve a cut of at least 5% in their emissions by 2008-12.
In 2003, Hidroelectrica Guardia Vieja, a Chilean electricity generator, became one of the first companies in the world to sell carbon credits for a run-of-the-river hydroplant that, when water levels permit, replaces thermal generation. Brazil has also played a pioneering role in using this mechanism. However, at least in Chile, environmentalists are critical of carbon credits, arguing that they are being sold for projects that would have been implemented anyway -- for example, to comply with environmental standards required by export markets -- and, therefore, have little real impact on global emissions.
The production of alternative energy -- principally ethanol -- is also seen as a potentially important opportunity for South America. Brazil already rivals the United States as the world's largest ethanol producer and uses sugar cane, seen as more energy-efficient than the maize used in the United States. In addition, Chile's forestry companies are increasingly interested in the development of technology that would allow ethanol production from wood chips.
CONCLUSION: In both Chile and Argentina, more research into the precise nature of the impact of global warming is required. As this involves public expenditure, it also implies raising awareness of climate change as a global phenomenon, not just a problem of industrialised countries.