The capital is the host of the final major international meeting before next year’s crucial climate change summit in Paris. Against the backdrop of these talks, one of the questions that will undoubtedly be asked is what is Peru itself doing to take action on climate change?
Peru is one of Latin America’s economic success stories, with a rapidly expanding economy and a population being brought out of poverty. Much of this growth has been thanks to energy-intensive sectors, such as oil and gas, mining, construction and manufacturing.
This has been positive for Peru’s population. The World Bank estimates that between 2005 and 2013 the poverty rates in the country dropped at a staggering rate, from 45 percent to 24 percent. But all this development comes with the need for a modern energy infrastructure to power it, as well as to meet the demands of a burgeoning urban middle class.
Outside of the remote rural areas, where grids can be inconsistent at best, electricity supply in Peru is comparatively secure and cheap. This is thanks to abundant hydroelectric resources and significant natural gas reserves. However the long term potential for both these resources has been called into question by climate change, driving a need for greater efficiency in their use.
This goes beyond the global focus on reducing greenhouse gas emissions. Peru gets very little rainfall on its arid Pacific coast and areas of the country are already facing serious water scarcity. As well as worries around providing drinking water and irrigation for agriculture, this could cause a number serious energy issues in the future. Much of the water powering the country’s hydroelectricity plants is provided by rivers flowing from rapidly melting tropical glaciers in the Andes.
A greater focus on energy efficiency is one of the main solutions to the energy challenge facing Peru, as well as a way of boosting economic development and competitiveness. To support this the Carbon Trust is currently leading on a new project to help identify and enable energy efficiency for businesses in Peru, as well as helping to build self-sustaining local implementation capacity.
This work is being delivered with local partner, Perú 2021, working alongside two local technical consultants, SENATI and Südesco Energy. The project is financed by the Climate and Development Knowledge Network (CDKN), an alliance of organisations with a mandate to deliver climate compatible international development, with funding from the UK and Dutch governments.
"The partnership between the Carbon Trust, SENATI, Südesco Energy and Perú 2021, with support from CDKN, is a great example of the opportunity to share knowledge and skills to accelerate action on energy efficiency," explained Sam Bickersteth, CEO of CDKN. "We are delighted to be working with them on this project and we hope to demonstrate how these types of business models can be commercially viable, scalable and replicable, and in doing so help shift private sector finance towards climate compatible development."
An initial pilot phase is currently taking place, involving large Peruvian organisations across a number of target economic sectors. The seven pilot companies are: Corporación Lindley, a soft drinks company and Coca-Cola bottler; Universidad de San Martín de Porres, a private university in Lima; Peru’s second largest supermarket chain, Supermercados Peruanos; pension fund manager, AFP Integra; Tgestiona, a large outsourcing and shared services business; gold miners, Poderosa; and fish processors, Austral.
Energy efficiency will benefit these businesses in other ways than just saving them money on energy. It will put them ahead of the curve as local government seeks to limit the impacts of industry on the environment. Just as importantly a number of multinational companies are now putting a far greater focus on the sustainability performance of their supply chain. Demonstrating robust energy and carbon performance supports winning international work, particularly from European companies.
The work that is being done in the pilot phase of the project will help identify what is needed to build a successful programme across Peru. This will be built on the Carbon Trust’s 13 years of expertise in successfully accelerating the adoption of energy efficiency around the world, in countries including the UK, China, South Africa, and Mexico.
Through their actions to become more energy efficient the businesses involved in the pilot are setting an example for others in their sectors, helping to prove the case for change. So when the spotlight shines on Lima during the climate negotiations, it will be possible to point to clear action that is being taken to help create a more low carbon, sustainable economy for Peru.