Rio Turbio serves as an example of Donald Trump policies - IDESA

Informe Nº: 20/07/2017

Rio Turbio serves as an example of Donald Trump policies

The decision of the US president to withdraw his country from the Paris Agreement about the mitigation of global warming has generated justified criticism around the world, including Argentina. But in Argentina, there are internal policies that respond to the same logic, are justified by similar motives and cause enormous damage. An illustrative case is the use of public funds to subsidy the company Yacimiento Carbonífero Río Turbio.

The Paris Agreement to fight against global waming is a pact signed within the framewok of the United Nations, aimed at uniting all countries in a cordinated effort to reverse climate change. The goal is to keep the global temperatrue 2°C bellow the levels registered before the Industrial Revolution. To this end, each country agrees to modify, from 2018 onwards, its sources of energy generation.

A key adherence was that of former US President Barak Obama. Because of the size of that country, a reduction in carbon use and fossil sources of energy generation on its part is crucial for the achievement of the goals of the agreement. The fact that the current president has decided to reverse that decision on the grounds that it is necessary to protect coal mines workers in the United States generates concerns and repudiation.

Except for some differences in orders of magnitude, Argentina carries out similar policies to those promoted by Donald Trump. A very illustrative case is Yacimiento Carbonifero Río Turbio– a Carboniferous Site-. According to the 2017 National Budget, the financial situation of the company for the current year is as follows:

  • Its total budged amounts to AR$ 4,360 million annually.
  • With income generated by their own, they will only cover 3% of its budget.
  • The remaining 97% of its budget, or AR$4.216 million, will be covered by subsidies provided by the National Treasury.

These data show that Argentina follows, as Trump’s proposals, policies to protect coal mining. Although this mineral has been displaced as an energy source since the 1980s, the use of public funds to support a company that intends to produce energy from coal has continued. The decision to adhere to the Paris Agreement and, in parallel, to include in the National Budget an important amount of funds to subsidize coal mining is contradictory. It is a “negative contribution” to the goals of global warming reduction.

Argentina is a country with enviable advantages in the generation of clean energies. Although fossil, the country has enormous potential for the production of conventional and shale gas. It also has huge natural resources to produce hydroelectric, wind and solar energy. However, between 2007 and 20017, US$ 3 billion from the National Treasury were allocated to Río Turbio carboniferous site. This amount used to subsidize the coal industry, is similar to the one required by the 60 aeolic, solar, hydroelectric and biogas projects planned by the Renewable Energy Plan (RenovAR 1.0 and 1.5).

The most frequently used argument to defend the use of public funds in projects like Río Turbio is the protection of jobs. As with Trump’s proposal, this argument rather than a legitimate goal of social equity is an excuse to defend spurious interests. On the one hand, because there are much more rational, efficient and fair ways to generate job opportunities, on the other hand, because almost 40% of the resources that the State transferred to the company were not used to pay wages, but to finance other contracts with providers under little transparency and rationality.

Donald Trump's decision to protect employment in the coal industry deserves forceful rejection because of the damage to the environment. But it also requests a review about the consistency of the policies that are currently applied in Argentina. A critical and sincere examination reveals the enormous social damage done by unsustainable projects from the technological, ecological and financial point of view. With the same amount of resources, and better targeting and managing, pollution and corruption risks could have been avoided, and more genuine and productive jobs created. 

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