Argentina: Shaky Climate Policy Under the New Administration
Argentina faces many diverse and complex environmental challenges, affecting its biodiversity, landscapes, and the well-being of its people. These issues range from deforestation and pollution to soil erosion, water scarcity, and the impacts of climate change, including extreme weather events. Over the years, Argentina has made commitments to address climate change and has developed some plans for mitigation and adaptation. In 2016, the country committed to reducing its emissions by 15% from 2020 to 2030 based on a business-as-usual scenario, with an additional 15% reduction depending on international support.
Despite being a signatory of the Paris Agreement and introducing a new National Climate Change Mitigation and Adaptation Plan in 2022, Argentina’s response to climate and environmental challenges has been hampered by recent political changes. The aftermath of the general elections in October 2023, which saw Javier Milei emerge as the victor, has seen political agendas shift towards restoring fiscal balance, fostering economic growth, and curbing Argentina’s high inflation rates. The Milei administration’s stance on environmental issues, particularly its relaxation of environmental regulations, has sparked controversy. Milei, a climate change skeptic, has proposed policies that could potentially harm Argentina’s forests and glaciers, inviting criticism for their potential to inflict irreversible damage on the country’s natural resources and undermine its environmental and climate commitments.
As the world’s third-largest lithium reserve holder and fourth-largest producer, Argentina is in a unique position. The sector has attracted diverse international investors and positions the country to potentially outpace Chile as Latin America’s leading lithium producer. However, the extraction and production of lithium come with severe environmental and social challenges, such as significant water usage and the use of chemicals, which can contaminate water sources. Mining activities for lithium can also lead to increased air pollution, directly impacting local ecosystems and communities. The importance of addressing these challenges cannot be overstated. It requires prioritizing sustainable practices, regulatory compliance, community involvement, and responsible resource management, facets which many question Argentina’s current government of effectively regulating.
This week, I talked to Fernando Prats, a Program Director at London Politica, a political risk advisory for social impact. In the conversation below, you will discover how the new administration’s policies affect environmental and climate goals and their impact on the lithium sector.
Policy Direction and Priorities
How has the new administration's approach to environmental and climate policy shifted from previous governments?
Milei’s approach to the environment is yet another example of his disruptive stance on a wide variety of economic and social issues. Since his 2021 congressional campaign, his denialist rhetoric has been a defining feature of his markedly unconventional agenda, sharply contrasting with the approaches of past administrations and the Argentine political establishment.
Previous administrations, spanning from the Peronist Alberto Fernández (2019-2023) to the center-right Mauricio Macri (2015-2019), despite their ideological differences, shared a common concern for environmental issues. While their environmental agendas faced criticism for their shortcomings, they underscored the significance of climate policy. For instance, Macri elevated the Secretary of Environment to ministry status, although this designation reverted to a secretary in 2018. Upon taking office, Fernández reinstated it as a ministry.
Milei’s elimination of the Environment Ministry signals a concrete shift in approach beyond his denialist rhetoric. Moreover, the ‘Omnibus’ bill, a comprehensive reform proposal ultimately rejected by Congress, included provisions aimed at easing environmental restrictions.
Impact of Economic Policies
How do the new administration's economic policies intersect with environmental and climate objectives?
As a libertarian with a climate change denialist rhetoric, Milei tends to prioritize economic development over environmental protection, which is reflected in the aforementioned elimination of the Environment Ministry but became evident in his ‘Omnibus’ bill.
This ambitious reform bill, for which Milei is preparing a second version to submit to Congress, includes numerous provisions altering environmental regulations, particularly in 3 areas: fishing, forestry, and glacier protection laws. These reforms primarily aim to relax existing regulations to facilitate resource extraction, such as expanding agricultural land or establishing new mines.
While the success of Milei’s reform efforts remains uncertain, it is clear that his anarcho-capitalist approach results in a disregard for environmental considerations and protection policies, which he dismisses as ‘socialist.’
Lithium Sector
How is the current political administration in Argentina influencing the development of the lithium sector?
Milei’s administration views openness to foreign capital as crucial for the success of the lithium sector. The president emphasizes the necessity of a clear and certain regulatory framework that guarantees private property rights to attract foreign investment. However, it is important to note that this approach does not differ from previous administrations. In fact, Argentina has had a ‘decentralized, pro-market strategy’, even under previous center-left administrations.
In recent months, Milei’s administration and governors from lithium-producing provinces have engaged in discussions with officials and companies from countries such as the U.S., Israel, and Germany to explore potential opportunities for lithium exploitation. While the federal government plays an important role, it’s key to recognize that, constitutionally, the provinces own the resources in their territories. Therefore, fostering a positive relationship between Milei’s administration and lithium-producing provincial governments is essential for the president’s plans to prosper.
What measures are being implemented to mitigate the environmental and social impacts of lithium mining?
Argentina’s most important lithium deposits are located in the Northwestern region, an arid area where numerous indigenous communities live. The major concern for these communities regarding lithium exploitation is related to water security, which is widely believed to be threatened by unsustainable lithium extraction.
Despite the existence of mitigation mechanisms in the country, they are generally only partially implemented and face significant limitations, particularly in light of the sector’s business-oriented strategy. This is further compounded by the current administration’s lack of interest in environmental issues, casting doubt on the prospects for meaningful progress in this area, at least in the short and mid-term.
Consequently, lithium will remain to be ’at the heart’ of social conflict in producing provinces, as evident in the massive protests that took place in the province of Jujuy in 2023. Following a provincial constitution reform, indigenous communities took to the streets en masse, advocating for the protection of their rights to water, territories, and economic activities.
For more information about Fernando’s work and research, follow him on LinkedIn.
Argentina follows a set of policies, laws, and international commitments to guide its actions and regulations related to climate and the environment. This includes national legislation, constitutional provisions, and participation in global climate agreements. Policy highlights include:
The National Climate Change Adaptation and Mitigation Plan (2022): A roadmap to cut carbon emissions, including 250 public policy measures to be executed by 2030. It prioritizes natural gas, targets reduced agricultural emissions and enhances water management.
The National Agriculture and Climate Change Action Plan (2019): Details Argentina's actions to reduce greenhouse gases in the agricultural sector.
The National Plan for Energy and Climate Change (2017): Addresses both energy supply and demand by promoting renewables like biofuels and enhancing household energy efficiency.
Argentina's climate and environmental policy approach has significantly changed under the new administration. Despite having a substantive array of policies and commitments, the current government appears to focus on economic development, often at the expense of environmental considerations. While offering economic opportunities, the lithium sector presents substantial environmental and social challenges that require careful management. As Argentina continues to navigate these complexities, balancing economic growth, environmental sustainability, and social equity will be imperative.