VZCZCXYZ0010
RR RUEHWEB

DE RUEHMN #0181/01 0921116
ZNR UUUUU ZZH
R 021116Z APR 09
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 8915
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS MONTEVIDEO 000181 
 
SIPDIS 
 
STATE FOR WHA/BSC MDASCHBACH 
 
E.O. 12958: N/A 
TAGS: SENV KGHG UY
SUBJECT:  URUGUAY ADVANCES ON CLIMATE CHANGE 
 
Summary 
------- 
 
¶1.  An environmental current is gathering momentum in Uruguay, with 
a notable increase in the number of public and press events related 
to climate change.  On March 17, President Vazquez announced the 
launching of a National Agenda on Climate Change that creates a $6 
million emergency fund to help mitigate damage by natural disasters 
resulting from climate change.  Uruguay's economy is largely 
dependent on natural resources; its economic health, in large part, 
will depend on its ability to manage its resources as they are 
affected by climate change.  The GOU is a faithful adherent to 
international climate change agreements, and the new national agenda 
reinforces its commitment to a sustainable response to the growing 
challenges in that area.  End summary. 
 
GOU Announces a National Agenda on Climate Change 
--------------------------------------------- ---- 
 
¶2.  Climate change grabbed headlines in Uruguay with President 
Vazquez's March 17 announcement of its inclusion in the national 
agenda, but the issue is old news in Uruguay.  For years, the GOU 
and Uruguayan civil society have carried out regular outreach 
programs and promotion campaigns aimed at increasing the awareness 
and understanding of climate change issues by different sectors of 
society (the general public, GOU agencies, and stakeholders in 
general) as well as building support for the implementation of 
response measures. 
 
¶3.  President Vazquez's National Agenda on Climate Change is another 
step toward promoting a national debate on the issue.  "Fighting 
climate change must be a matter of the nation's politics," Vazquez 
said.  He announced the establishment of an emergency fund to 
alleviate the impacts of climate change-induced disasters.  An 
initial $6 million will be committed to the fund with increasing 
amounts planned for the future.  The fund will be used to address 
the damage wrought by droughts, tornadoes, and floods.  A joint 
working group, including representatives from the GOU and local 
governments, will help manage risk with a focus on the impact that 
natural disasters could have on the economy.  The 220-page document 
also includes a summary of climate change research results obtained 
in Uruguay, and a description of the projects that are already being 
implemented. 
 
¶4.  Both public and private sectors are involved.  A measure to 
require new hotels, sports clubs and hospitals to have solar-powered 
hot water heaters was passed in the Senate in December and is 
awaiting approval in parliament.  Although it is a progressive 
environmental measure, it stands to face significant resistance from 
developers, especially during an election year, due to the 
additional construction costs.  In an ongoing project to increase 
the percentage of electricity from renewable sources, last week the 
national electricity agency named several private companies winners 
of contracts to produce 26.2 MW of renewable energy (including a 5MW 
contract awarded to U.S. company Weyerhauser).  Uruguay has eight 
projects underway that are reducing the emission of the equivalent 
of 300,000 tons of CO2, and nine biomass and wind energy projects 
saving 200,000 tons of CO2. Note: Since they are all Clean 
Development Mechanism projects, the GHG emission reduction that they 
will bring, will not be allocated to Uruguay, but to the foreign 
company that bought them.  Therefore, they will not be reflected in 
the GOU inventories.  End note. 
 
Climate Change Impacts on Uruguay 
--------------------------------- 
 
¶5.  Although a minor contributor to global warming, Uruguay faces 
the possibility of being severely affected by climate change.  That 
could result in serious problems in achieving sustained, 
environmentally-sound economic and social development, given the 
link between the country's natural resources and its economic 
performance.  Uruguay presents a significant inter-annual and 
inter-seasonal climate variability, which results in large climate 
anomalies that manifest themselves as droughts, floods, tornadoes, 
and modifications in wind, precipitation and storm patterns. 
Experts believe these extreme weather events are likely to become 
increasingly frequent and intense. 
 
¶6.  Climate change is affecting many sectors in Uruguay, but for the 
moment the GOU has decided to concentrate its efforts solely on the 
economy and the environment.  The announcement of the plan comes on 
the heels of a severe drought which is estimated to have caused a 
loss of $450 million (roughly 1.5 percent of GDP) for the 
agricultural sector alone.  Losses could end up being even higher, 
though, once the costs of using more expensive energy sources (in 
the absence of hydropower) are incorporated into the analysis. 
Other agricultural implications of climate change could include 
impacts on Uruguay's traditional crop/livestock production system. 
Minister of Agriculture Agazzi said there may be a "tropicalization" 
of Uruguay's agriculture, a need for land-use changes (crops vs. 
livestock vs. forestry), switching of animal species, and changes in 
biodiversity.  Fisheries may also be affected as a result of an 
increase in the mortality rate of juveniles, and an increase in 
toxic algal blooms.  In terms of tourism (4 percent of GDP), beach 
erosion is a problem, and the Ministry of Tourism has initiatives to 
develop environmentally friendly tourism. 
 
¶7.  Uruguay's economy is largely dependent -- directly or indirectly 
-- on natural resources.  The management of those resources is a 
critical link in Uruguay's efforts to both adapt to and help 
mitigate climate change.  Although the agricultural sector's 
contribution to the country's GDP is only 10 percent, agricultural 
products constitute about 65 percent of the value of the country's 
exports.  If manufactured goods from agriculture are included, this 
contribution increases to 85 percent.  Eighty-five percent of 
Uruguay's land is suitable for agricultural production, one of the 
largest proportions in the world.  Livestock production is the most 
important agricultural activity. 
 
¶8.  Uruguay's coast also plays a critical role in the national 
economy.  An estimated 80 percent of the country's GDP is generated 
from activities taking place in coastal areas (e.g. tourism, 
fishing, construction industry).  Urban growth increases pressures 
on coastal areas since 70 percent of the population resides in the 
coastal zone. 
 
¶9.  Along with President Vazquez's announcement, Minister of 
Environment Colacce announced the 2010 launching of a special World 
Bank-funded Clean Development Mechanism (CDM) for small and medium 
sized enterprises.  Colacce stressed the need to focus on the impact 
of climate change on the availability, use, and management of the 
country's water resources and explained how Uruguayan coastal 
resources are particularly vulnerable to climate change impacts 
through sea-level rise (he cited an estimated 0.40 meter sea level 
rise by the end of this century).  He pointed out that climate 
change-caused storm surges could produce a cascade of impacts from 
beach deterioration and morphological changes to negative effects on 
wetlands, human settlements, coastal infrastructure, and 
coast-dependent industries like tourism. 
 
Uruguay's Commitment to Combat Climate Change 
--------------------------------------------- 
 
¶10.  Uruguay ratified the United Nations Framework Convention on 
Climate Change (UNFCCC) and the Kyoto Protocol in 1994 and 2000, 
respectively.  The GOU has excelled in fulfilling its commitments 
under the agreements over the past 15 years.  A Climate Change Unit 
(UCC) was created in 1994 within the framework of the National 
Environment Office (DINAMA) of the Ministry of Environment (MVOTMA). 
 In addition, in 2000, the General Environmental Protection Act was 
passed which provides a framework for environmental management and 
incorporates specific provisions for climate change. 
 
¶11.  The submission of National Communications is one of the 
country's main commitments under the UNFCCC.  Uruguay was one of the 
first countries to submit its Initial National Communication in 
1997, and was the first developing country that submitted its Second 
National Communication in 2004.  Uruguay is currently working on the 
Third National Communication, tentatively scheduled for release in 
November 2009. 
 
¶12.  As a result of the work coordinated by the UCC within the 
context of the formulation of those National Communications, Uruguay 
has been able to produce five GHG Emissions Inventories (1990, 1994, 
1998, 2000, and 2002), a comprehensive Program of General Measures 
for Mitigation and Adaptation to Climate Change in Uruguay 
(PMEGEMA), and several related documents.  Both Communications 
reflect the efforts of the country in exploring strategies that 
would allow it to deal with the effects of climate change.  Leading 
universities and research institutions carried out the research, in 
coordination with all relevant stakeholders, through the 
establishment of inter-institutional, multidisciplinary working 
groups.  The implementation of the measures listed in the PMEGEMA 
was declared of national interest in 2003.  The first comprehensive 
assessment of the country's vulnerability and adaptation to climate 
change was funded by the USG through the U.S. Country Studies 
Program.  Subsequent to that, the Global Environment Facility (GEF) 
has been the largest donor. 
 
¶13.  Uruguay has also carried out mitigation and adaptation analysis 
for a wide range of sectors including the agricultural sector, 
forestry, coastal resources, biodiversity, waste, energy, water 
resources, fisheries, human health, and transportation.  Response 
measures were identified for each sector, as well as cross-sectoral 
measures.  They were all included in the PMEGEMA Program.  An 
example of successful implementation of a mitigation measure is the 
World Bank-funded project by which a methane recovery system was 
built on top of an existing urban landfill in the interior if the 
country.  The methane obtained is used to generate electricity that 
is later sold to the national grid. 
 
¶14.  Since ratification of the Kyoto Protocol on 2000, the GOU has 
been actively engaged in the identification of potential projects 
and partners under the Protocol's CDM.  Uruguay represents an 
attractive market for countries interested in engaging in carbon 
emission trade opportunities and transfer of GHG-reducing 
technologies and services.  Bilateral agreements have been signed 
with Canada, The Netherlands, and Spain. Business people appear 
eager to understand the issues at play and how to set up projects to 
generate carbon credits.  Uruguay has nine CDM projects under way, 
as well as several others in the pipeline. 
 
A Congruence of Views 
--------------------- 
 
¶15.  The GOU and the USG have similar views on many international 
environmental issues.  This has facilitated dialogue on how 
countries can promote economic growth and protect the environment. 
There is a strong commitment, from both the government and the 
general public, to reduce emissions.  Clean energy cooperation is 
therefore an easy target for bilateral cooperation in Uruguay. 
 
MATTHEWMAN