THE RENEWABLES ENERGIES IN THE CARBON MARKET IN LATIN AMERICA 22nd International Sustainable Development Research Society Conference, School of Science and Technology, Universidade Nova de Lisboa, Lisbon, Portugal, 13 –15 July 2016 THE RENEWABLES ENERGIES IN THE CARBON MARKET IN LATIN AMERICA Lira Luz Benites-Lazaro1, Alice Falleiro2, Neli Aparecida de Mello-Théry1, André Luiz Miranda Silva Zopelari3 Celio Andrade 4 1 University of São Paulo, lbenites@usp.br,2 Universidade Federal Santa Maria, 3 Universidade Federal do Rio de Janeiro, 4 Universidade Federal da Bahia. The paper aims to describe the main features of the countries’ positions in the CDM renewable energy projects in Brazil, Mexico, Chile and Peru. The first effort was to evaluate the CDM portfolio concentrating on renewable energy projects. Moreover, a special analysis was in the public policy in order to identify how political-institutional and economic aspects have influenced the development of CDM projects. Abstract CDM portfolio and renewables energies in Latin America Four countries (Brazil, Mexico, Chile and Peru) leading the CDM projects development in the renewable energies sector. In Brazil it represents 62.8% of total of projects registered. In Mexico the renewable energy represents 40.1%. In Chile 73.5% and in Peru 88.3% of total CDM projects registered. The economic growth and energy consumption in Latin America The past decade was the best in economic terms of the modern history of the region. An overwhelming majority of countries showed growth rates, allowing the improvement of their social situation and the rise of millions of people in poverty towards the new middle class. Consequently, Latin America has reproduced certain growth patterns that affect heavily on environmental and social issues: the higher levels of demand for energy. The renewable energy projects in Latin America that have received CDM revenues was generation from hydro, wind, geothermal, landfills, and biomass from sugarcane production.   Brazil México Peru Chile Contribution CDM projects registered 49% 28% 15% 9% Energy Industries (renewable/ non renewable sources) 51% 18% 13% Hidro power plant (HPP) 24% 4% 30% 41% Small hidro power plant (SHPP) 91% 1% 5% 3% WIND Landfill 14% 73% 8% Biomass 72% 22% Solar 0% 50% 36% Others 65% 12% * until april 2016 Renewable energy policies in Latin America Latin American countries have begun to promote renewable energy with incentives and mandates. The four countries created public policy that influenced the development of CDM projects in renewable energy. However, the most important barriers to project development are politically and bureaucratically related. The political-institutional barriers of a lack of a long-term vision for energy policy that incorporates renewable, closed electricity markets and frequent and abrupt political upheaval may seem like insurmountable challenges to project development. Tax Incentives Brazil Chile Mexico Peru VAT exemption Exemption from tax on fuel Exemption from income tax Tax benefits import/export National exemption from local taxes Carbon tax Accelerated depreciation Other tax benefits National policy Brazil Chile Mexico Peru Renewable energy target Strategy/renewable energy law Law /solar thermal program Law /solar program Law / wind energy program Law / geothermal energy program Law / Biomass Program Law / biofuels program Conclusions References The paper shows the effort of the four countries studied to building the institutional-political capacity to encourage the development of CDM projects in renewable energy sector. Furthermore, the economic context and demand for energy spurred investments in this sector. However, each one of the four countries needs to face important obstacles in order to advance in the environment topic and contribute to climate change mitigation. Lokey, E. (2012). Renewable energy project development under the clean development mechanism: A guide for Latin America. Routledge.. UNFCCC - United Nations Framework Convention on Climate Change (2016). CDM Project activities. WORLD BANK. (2016) Global Database. http://www.worldbank.org/ Acknowledgements This work was supported by the National Council of Scientific and Technological Developments (CNPq), Brazil.