Current Policy Projections
Historical emissions, excluding LULUCF, have increased by 93% from approximately 50 MtCO2e in 1990 to 96 MtCO2e in 2014 (SEEG, 2019). Under current policies, GHG emissions will continue to increase up to 125 MtCO2e, excl. LULUCF, by 2030 (150% above 1990 levels) (APEC, 2019). These projections are about 14% lower than the BAU scenario included in the last National Communication and the NDC and show a slower growth rate in emissions excluding LULUCF. This will soon be contrasted with the updated projections to be published in the upcoming second Biennial Update Report (BUR), which is expected to be published in the coming months. Until then, our main source for projections of the Current Policies scenario was the latest APEC Energy Outlook (APEC, 2019), which projects a slower GDP yearly growth rate over the projection period than the last National Communication and BAU scenario (3.8% vs 4.3%).
Under current policies, Peru’s is expected to overachieve the country’s unconditional NDC target (excluding LULUCF). However, the government will still need to put additional measures in place to comply with their conditional target. Given that Peru is already moving towards the achievement of its NDC targets, it is also a good time to start discussing options to raise ambition of their mitigation goals, in light of the next NDC submission round, expected by 2020.
In April 2018, President Vizcarra announced Peru’s long-awaited framework law on climate change, which serves as a legislative instrument for the 2014 National Strategy on Climate Change and would effectively make Peru’s NDC legally binding (Ministerio del Ambiente del Perú, 2018). The law emphasises the need for climate adaptation, but also describes how mitigation efforts should be pursued: carbon sequestration in forests, sustainable transport, waste management, switching to renewable energy and energy efficiency in industry.
During most of 2019, the government held a participatory consultation process on the regulation of the framework law with all relevant stakeholders, including indigenous communities. The regulation of the framework law is expected to be approved at the end of this year, which would make the Climate Change law enter into force as of next year.
The law also creates a high-level commission (or Comisión de Alto Nivel de Cambio Climático, in Spanish), which can propose adaptation and mitigation measures to the Peruvian Government, as well as suggesting changes to the NDC. The Ministry of Environment should report annually to the Parliament on the progress made in implementing adaptation and mitigation measures (Ministerio del Ambiente del Perú, 2018). For this purpose, a multi-sectoral working group was established to develop the “Road Map for the implementation of the NDC”.
During 2019, the working group reviewed the 76 mitigation options identified in the iNDC in 2015 and submitted 62 mitigation options (result of aggregating some of the initially proposed measures, excluding and adding new measures) in seven sectors to the high-level commission. It is expected that the implementation of the 62 mitigation measures would reduce close to 70 MtCO2e (over 60% expected to come from the LULUCF sector), representing about 23% reduction of the BAU 2030 emissions, with a gap of 6.7% pending to achieve the 30% commitment.
The working group identified some additional measures to be considered for the energy and LULUCF sector which would lead to a 31.7% reduction, slightly overachieving their conditional target for 2030 (Government of Peru, 2018). These last measures are yet to be approved by the high-level commission.
In 2012, the contribution of Peru’s energy supply sector to overall emissions (excl. LULUCF) was around 32% (Ministerio del Ambiente del Perú, 2016). Policies that aim to mitigate these emissions include the policy for ‘promotion of investment for the generation of electricity from renewable energies’, which builds on the National Strategy on Climate Change and prioritises renewable energy generation as a matter of national interest and public necessity. It mandates the setting of renewable energy targets as a share of electricity consumption in five-year intervals ‘up to 5%’. Since 2009, four renewable energy auctions have contributed towards achieving this target (El Comercio, 2017). With 21% of renewables in its total primary energy supply in 2016 (IEA, 2018), Peru is lagging behind in its efforts compared with its Copenhagen pledge of 40% renewable energy by 2021.
Peru also has a law to promote an efficient use of energy. Law no. 27345 mandates the Ministry of Energy and Mines to carry out activities aimed at encouraging a culture of improving energy efficiency, in coordination with other public institutions and the private sector. It also defines sectoral programmes for the efficient use of energy.
The law to promote a market for biofuels (Law no. 28054) establishes the general framework to promote the development of biofuels with the aim of diversifying the fuel market. However, the current fuel mix quotas (5% for biodiesel and 7.8% for ethanol) are only considered in the BAU scenario (Government of Peru, 2015a).
In 2012, the contribution of Peru’s transport sector to overall emissions in Peru (excl. LULUCF) was close to 21% (Ministerio del Ambiente del Perú, 2016) and constitutes the largest contributor to energy-related emissions in the country. To mitigate these emissions, Peru has already implemented phase I of the Lima Metro Network and the COFIGAS Programme which supports the conversion of vehicles to run on natural gas.
Peru has also had a Maximum Allowable Emission Limits regulation in place since 2007. This regulation mandates that new private vehicles being imported into the country should comply with Euro 3 or Tier 1 fuel standards and cannot be older than five years.
In 2018, the President and other government representatives made statements that they intend to accelerate the entry of electric vehicles in Peru. The NDC includes a 5% EV share target by 2030 (Government of Peru, 2015b), which is highly insufficient considering that, at global level, the last fossil fuel car should be sold before 2035 to reach full decarbonisation in the road transport sector by mid-century.
In 2015, Peru approved a Sustainable Construction Code to improve technical criteria for the design and construction of public and private buildings (Supreme Decree no. 015-2015-VIVIENDA). More recently, energy efficiency labels for household appliances have been introduced (Supreme Decree no. 009-2017-EM).
In 2012, the contribution of Peru’s LULUCF sector to overall emissions in Peru (incl. LULUCF) was 53% (Ministerio del Ambiente del Perú, 2016). Peru hosts about 740,000 square kilometres of forests, including the largest area of the Amazon rainforest after Brazil (World Bank, 2015). However, the Amazon is poised to become one of the 11 regions in the world to have more deforestation and forest degradation in 2030 than anywhere else (WWF, 2015).
Concerns increased significantly with the proliferation of fires in the Amazon rainforest in August this year. Although the number of fires decreased by 35% in September, experts say this is merely a slowdown in a crisis with global repercussions(Phys News, 2019). As response, seven South American countries, including Peru, signed a pact setting up a disaster response network; satellite monitoring; and agreeing to work on reforestation (BBC News, 2019).
Further, deforestation remains a critical problem in Peru due to expansion of palm oil, agriculture, illegal logging and informal mining (Swenson et al., 2011; WWF International, 2015).
Under current policies projections for the LULUCF sector, emissions from Peruvian deforestation are projected to increase by 82–84% between 2012 and 2030 (Ministerio del Ambiente del Perú, 2016), a growth rate not seen before in Peru’s history. We note that this estimate is significantly higher than previous estimates by CIFOR (CIFOR, 2014). This appears to be at odds with Peru’s refined Copenhagen pledge of reducing LULUCF emissions to zero by 2021. As world LULUCF emissions would need to decrease towards 2030 to fall in the Paris Agreement emissions pathway, Peru needs to address—and prevent—this significant projected increase.
Peru’s forest law (Law no. no. 29763) and the National Strategy on Protected Areas aim to reduce deforestation through sustainable forest management and improved management of protected areas, respectively. Both policies are included in the current policies projections. To fund such efforts in the Amazon, Peru has received USD 36 million support in form of grants and loans from the Interamerican Development Bank and the Climate Investment Funds (IDB, 2018).
Finally, Peru has further policies in the forestry sector such as the National Forestry and Climate Change Strategy, the law and an executive decree aimed at compensation for services to Ecosystems (Law No. 30215) and the commercialisation of fees by ecosystem conservation (Executive Decree no. 26-2014-SERNANP). However, the emission reduction impact of these policies is not clear and government estimates are not available.