Peru

This assessment includes our policy analysis from 27 November 2020 translated into our new rating methodology without new analysis of Peru’ climate policies since then, except the NDC update submitted in December 2020. We will fully analyse Peru in the coming months and the rating may change.

The CAT rates Peru’s climate targets and policies as “Insufficient”. The “Insufficient” rating indicates that Peru’s climate policies and commitments need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit and lead to rising, rather than falling, emissions. We rate Peru’s conditional target as “Insufficient” as it is not in line with modelled domestic pathways, and the unconditional target as “Insufficient”, too, meaning that this target is falling behind Peru’s fair share contribution.

We rate Peru’s policies and action as “Almost sufficient”. The “Almost sufficient” rating indicates that Peru’s climate policies and action in 2030 are not yet consistent with the Paris Agreement’s 1.5°C temperature limit when compared to Peru’s fair share contribution, but could be, with moderate improvements. If all countries were to follow Peru’s approach, warming could be held at—but not well below—2°C. With international support, Peru should pursue additional actions beyond its fair share, to be fully Paris compatible, also when compared to modelled domestic pathways.

According to our assessment, Peru’s emissions (excl. LULUCF) in 2020 would be 14% to 16% lower than in 2019. This can be attributed to the strict and long, four-month lockdown period. The COVID-19 pandemic and the complete immobilisation of the population also resulted in one of the most dramatic economic downturns in the world, with a devastating 30.2% GDP drop in the second quarter of 2020, with annual 2020 GDP growth projected to fall between 12% and 13.9% Although the government’s response to the pandemic has so far mainly taken the form of financial bailouts, its representatives have in several instances referred to a ‘building back better’ approach, taking into account sustainability and responding to climate change.

Amongst the most relevant climate policy developments, the government approved the National Programme for Sustainable Urban Transport, which supports cities in developing cycling infrastructure, referred to as low-emissions and low-risk mode of transport. In July, Peru established its high-level climate change committee to signal its commitment to fighting climate change. In September the country received a EUR 250 million loan from the KfW Development Bank that will help small businesses survive the current economic crisis and, once economic recovery begins, will be used to promote climate-friendly investments.

In October, Peru and Switzerland signed a carbon credit deal where Switzerland will finance emission reduction projects that are designed to contribute to sustainable development in Peru while the emissions reductions would count towards the Swiss NDC. This poses a major risk for Peru in the long-term, as achieving further mitigation reductions in the future (as needed under the Paris Agreement) will become much harder.

The full policies and action analysis can be found here.

We rate Peru’s internationally supported reduction target (its conditional NDC) “Almost Sufficient” when compared with modelled domestic emissions pathways. The “Almost Sufficient” rating indicates that Peru’s conditional NDC in 2030 is not yet consistent with the Paris Agreement’s 1.5°C temperature limit but could be, with moderate improvements. If all countries were to follow Morocco’s approach, warming could be held below—but not well below—2°C.

We rate Peru’s unconditional NDC target as “Insufficient” when compared with its fair-share contribution to climate action. The “Insufficient” rating indicates that Peru’s fair share target in 2030 needs substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit. Peru’s target is at the least stringent end of what would be a fair share of global effort, and is not consistent with the Paris Agreement’s 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow Peru’s approach, warming would reach over 2°C and up to 3°C.

The land use, land-use change and forestry sector has consistently been a significant source of emissions in Peru over the last 20 years. For those years where data is available, emissions from LULUCF are at a similar level as those from all other sectors together.

Peru’s updated NDC makes reference to a goal of reaching carbon neutrality by 2050. However, no further details have been communicated so far, which limits our ability to assess the comprehensiveness of the target. The CAT has not yet evaluated this target.