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Argentina is currently revising its energy planning and, in December 2017, released a new set of energy scenarios, which would lead to significantly lower emissions – if additional measures are implemented - compared to current policy projections. With the lower end of the scenarios, assuming a more modest growth of energy demand and optimistic assumptions on renewable and nuclear additions, Argentina could even overachieve its unconditional climate target (NDC) submitted under the Paris Agreement. Since 2015, when President Mauricio Macri was sworn into office, Argentina has shown significant positive developments in the climate arena by adopting policies such as the ‘Biofuels Law’ and the new ‘Renewable Energy Law,’ and implementing a carbon tax in December 2017.
Argentina is one of the few countries we have assessed that has increased the targets in its NDC since the adoption of the Paris Agreement. Nevertheless, CAT still rates Argentina’s NDC “Highly Insufficient”, indicating that the climate commitment is not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C as required under the Paris Agreement, and is instead consistent with warming between 3°C and 4°C: if all countries were to follow Argentina’s approach, warming could reach over 3°C and up to 4°C. If Argentina were to increase its ambition by making its conditional target unconditional, we would rate it “Insufficient.”
In November 2016, Argentina submitted its revised Nationally Determined Contribution (NDC), including an unconditional absolute emissions reduction target limiting emissions to 483 MtCO2e/a by 2030, including land use, land use change and forestry (LULUCF) emissions (405 MtCO2e excl. LULUCF). This is equivalent to a 22% increase compared to 2010 levels or 74% above 1990 levels, excluding LULUCF. Argentina has also put forward a conditional target to limit emissions to 369 MtCO2e/a by 2030 including LULUCF (310 MtCO2e excl. LULUCF), which equals to a reduction of 7% compared to 2010 levels or an increase of 22% compared to 1990, levels excluding LULUCF).
Whether Argentina will achieve its unconditional NDC depends mostly on the development of the energy sector. Uncertain variables are the speed of renewable energy expansion, additional nuclear plants, and demand projections. Under the most optimistic scenario, if Argentina were to implement additional policies to scale-up low carbon energy sources and reduce energy demand, it could even significantly overachieve its unconditional NDC target. The scenarios from the Ministry of Energy and Mining suggest an increase of renewable capacities of 14–18 GW by 2030, compared to only 4.5 GW that have been contracted under the renewable auctioning scheme RenovAr. The scenarios also assume further additions of nuclear capacity of almost 2 GW by 2030, although the scenarios show that investment costs for nuclear are about seven times higher than the costs of renewables and gas in Argentina. Also, solar PV is projected to be cost competitive with gas turbines before 2030.
Under more conservative assumptions, which only consider renewable and nuclear capacity additions currently underway, Argentina will miss its targets, unless it revises the energy split or implements actions in other sectors. Our policy projections, as well as the new scenarios from the Ministry of Energy and Mining, do not yet reflect the recently implemented carbon tax, and no studies yet exist that quantify the impact.