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13 Latin America and the Caribbean UNECLAC Author: Andrei Jouravlev, Natural Resources and Infrastructure Division. The author acknowledges comments and contributions from Abel Mejia, Andres Arroyo, Armando Llop, Beno Ruchansky, Caridad Canales, Gonzalo Delacámara, Hugo Altomonte, Humberto Peña, Jean Acquatella, Juan Pablo Schifini, Michael Hantke-Domas, Miguel Mathus, Miguel Solanes, Patricio Rozas and Rene Salgado. Water and energy inter-relationships in Latin America and the Caribbean are diverse, complex and intense. Current trends suggest that this interdependence will be subject to increased stress in the future mostly because of population growth and urbanization; rising income levels and economic growth; competition for water in river basins with concentrated economic development; and tendencies towards increasing the water intensity of energy production and the energy intensity of water provision for different uses – all this in the context of climate change. There are two principal areas of the water–energy nexus that stand out at the regional scale: · Water use for hydropower generation · Energy consumption in the provision of water services This is not to say that the water–energy nexus in the region is limited to these two issues. There are various other water and energy inter-relationships, but most of them are either specific to particular areas or countries, or not unique to the region. The most important of these other issues are the following: · The impact of electricity subsidies to farmers on aquifer sustainability (as in Mexico and Argentina) as well as on social equity. The powerful economic incentives created by these subsidies often make it virtually impossible to prevent aquifer deterioration through regulatory instruments alone (Solanes and Jouravlev, 2006). In Mexico, for example, subsidies for electricity used for pumping ‘have detrimental impacts on water demand and groundwater management, and mostly accrue to the richest farmers, making this a particularly regressive subsidy’ (OECD, 2013b). · An increasing interest in biofuels (Saulino, 2011), although in Brazil – the main producer – ethanol primarily comes from sugar cane, which is rain fed (Scott and Sugg, 2011). · A slowdown in the expansion of irrigated area accompanied by a shift to more water efficient, and more energy intensive, irrigation methods (as in Chile and Mexico), and its negative impact on aquifer sustainability due to increased consumptive use and reduced return flows.31 · The impacts of the use of water for cooling in thermoelectric power plants (Section 3.3.1), including the growth in the nuclear energy industry in Brazil. · The perspectives of introducing hydraulic fracturing (Section 3.2.1) in the region, as in Argentina and Mexico, and its implications, especially for groundwater quality. 13.1 Water use for hydropower generation Latin America and the Caribbean has the second largest hydropower technical potential of all regions in the world – about 20% (of which almost 40% is in Brazil) or approximately 700 GW. Less than one-quarter of this is developed (IEA, 2012b; OLADE, 2013). The region has experienced an impressive hydropower expansion, including large binational hydropower projects such as Itaipú, Salto Grande and Yacyretá, which are examples of the long tradition of transboundary cooperation in the region, especially since the 1970s. At present the region has almost 160 GW of installed capacity. As a result, hydropower provides some 65% of all electricity generated (even more in Brazil, Colombia, Costa Rica, Paraguay and Venezuela); in comparison, the world average is just 16% (IEA, 2012b). Hydropower development slowed 31 Improvements in on-farm irrigation efficiency that increase evapotranspiration (e.g. because of application of ‘saved’ [or salvaged] water to additional crops) ‘fail to conserve water on a broader geographic scale when irrigation return flows are an important component of basin- wide hydrology’ (Huffaker, 2010, p. 134). Therefore, investing in more efficient irrigation methods but allowing expansion of irrigated area is likely to actually reduce water availability, increase the energy intensity of agriculture and stress water supplies. WWDR 2014 LATIN AMERICA AND THE CARIBBEAN 95 CHAPTERPDF Image | Water and Energy
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