Can China Contribute to Climate Action in Latin America?

This research paper by Sisi Tang explores how China can transition its economic relationship with Latin America from expansion to sustainable development. The author proposes three specific mechanisms to enhance climate action: the implementation of clean energy crediting mechanisms, the use of debt-for-climate swaps, and the negotiation of 'greener' free trade agreements (FTAs).

• China could implement a crediting mechanism for clean energy projects in Latin America, similar to Japan's Joint Crediting Mechanism (JCM). Such a system would allow credits to be issued for emission reductions, facilitating the transfer of low-carbon technologies and quantifying reductions in host countries to count toward nationally determined contributions (NDCs). In Latin America, existing examples of Chinese investment include wind power projects in Argentina's Patagonia region and a photovoltaic power station in Jujuy province.
• Debt-for-climate swaps are proposed as a tool to provide financial relief to indebted nations in exchange for ecological protection. Ecuador is identified as a promising candidate for this because China's debt exposure there is USD 18.37 billion (17.1% of Ecuador's GDP). One specific proposal suggests China forgive USD 440 million of this debt to protect 200,000 hectares of Amazon rainforest, potentially avoiding 117 million tCO2 emissions.
• The author advocates for 'greener' free trade agreements (FTAs) to lower the cost of eco-friendly technologies and services. Essential elements for these FTAs include the inclusion of environmental services, clear definitions of 'green' goods and services, and environmental provisions such as voluntary sustainability standards. The paper notes that current bilateral investment treaties between China and countries like Argentina and Uruguay are outdated, dating back to the early 1990s.
• Trade volume between China and Latin America grew significantly, reaching USD 451.6 billion in 2021, a 41.1% increase from 2020. By 2020, Chinese investment in the region's infrastructure sector, including clean energy, totaled USD 94.09 billion.

APA

Tang, S. (2022). Can China Contribute to Climate Action in Latin America? International Institute for Sustainable Development. https://www.iisd.org/articles/policy-analysis/china-climate-action-latin-america

Chicago

Tang, Sisi. Can China Contribute to Climate Action in Latin America? International Institute for Sustainable Development, 2022. https://www.iisd.org/articles/policy-analysis/china-climate-action-latin-america.

Wikipedia

{{cite report |last1=Tang |first1=Sisi |title=Can China Contribute to Climate Action in Latin America? |publisher=International Institute for Sustainable Development |date=26 September 2022 |url=https://www.iisd.org/articles/policy-analysis/china-climate-action-latin-america |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tang2022can, author = {Tang, Sisi}, title = {{Can China Contribute to Climate Action in Latin America?}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = sep, url = {https://www.iisd.org/articles/policy-analysis/china-climate-action-latin-america}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }