Politics, Business & Culture in the Americas

Mesoamerica’s Infrastructure Projects and Reducing Climate Change

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This week, New York City hosted the Climate Summit 2014, an event aimed at shaping the world’s future developmental policies. Just one month earlier in Nicaragua, delegates from the Mesoamerican region met to analyze the social, environmental and economic impacts of severe droughts this year.  

Proyecto Mesoamérica (Mesoamerican Project), launched in 2008 by heads of state from Mexico, Central America, the Dominican Republic, and Colombia to promote regional integration and economic development, reported last month that 2.5 million people in Central America suffer from the impact of food insecurity and economic losses due to the severe droughts in the region. Guatemala’s agricultural losses this summer were estimated at around $ 57 million. El Salvador lost 90 percent of its bean harvest. Nicaragua reported 88,000 hectares of corn and beans lost and 600,000 livestock affected with malnutrition. Costa Rica reported losses of $19.5 million in the agricultural and livestock sectors, and Colombia reported agricultural losses of $ 28.2 million.

Regionally, water is a scarce, valuable commodity. Nicaragua possesses the largest source of fresh water in Central America, but Lake Nicaragua’s future is now the center of controversy—due to a contract awarded to the Chinese company HKND to build an interoceanic canal that would pass through this reservoir.

Pollution has been a big problem for Nicaragua’s lakes for many years. With technical and financial assistance from the German government, water treatment plants built in Lake Managua have been purifying its waters since 2009. Local farmers are using the abundant dried sewage sludge as an alternative fertilizer to reduce greenhouse gases (GHGs). This ultimately improves the lake ecosystems and proves that infrastructure projects can be used to protect the environment—demonstrating that “green infrastructure” is a lot more than just green roofs or walls on urban buildings.Many environmental experts are concerned that the Nicaragua canal project may pose a new threat to this important water source, especially because the depth of Lake Managua must be modified to accommodate large ships. Additional threats may include invasive species, the destruction of wetlands, coral reefs, mangroves, and biological corridors, and the disruption of Indigenous communities. There are also important legal concerns about how Nicaraguan sovereignty could be compromised for the next 50 to 100 years, and the way the canal’s infrastructure contract was awarded.

The Nicaragua canal is expected to break ground by December of this year. The Chinese and Nicaraguan governments have emphasized the important role this project will play in the future economic development of the second-poorest country in the region. Diplomats, academics, private sector representatives, and neighboring country analysts tout the canal’s possible benefits in terms of job creation, the growth of the construction sector, and trade facilitation for not only Nicaragua, but the region as a whole.

International financing institutions like the World Bank recognize the importance of the canal as a long-term strategy for economic development in Nicaragua, and agree that China’s presence in the region is a key factor for facilitating the process. According to the World Bank, “Today, the infrastructure gap in low and middle-income countries is estimated at $1 trillion. More and more, countries need to turn to the private sector as well as the public sector to build and operate their essential infrastructure.”

The Mesoamerican region is executing major projects to close the infrastructure gap. One regional example is the Mesoamerican Pacific Corridor Project, which supports highway improvements and construction between Mexico and Panama. Individually, Guatemala, Honduras, and Costa Rica are currently negotiating similar mega-infrastructure deals with China—including dry canals, oil pipelines, and hydroelectric dams—to improve their own competitiveness.

The region’s geographic importance is the main reason these new alliances are forming. China, in particular, is helping improve the region’s highways, airports, ports, railroads, pipelines, dams—and now, interoceanic canals—as a vital way to secure socio-economic development in the region and at home.

One positive action proposed at the Climate Summit is to develop more efficient transportation systems. New or expanded interoceanic canals are one big component that must be added to the discussion. How much this infrastructure will reduce GHGs is still uncertain, since these projects have an environmental cost, especially during construction. However, innovation in civil engineering, construction techniques and technological advances are helping to reduce the damage, as the Panama Canal expansion project demonstrates.

The question of how global infrastructure projects can best promote green and inclusive growth while reducing enivronmental damage is particularly important to Mesoamerica. This topic should be included in the overall approach to climate change mitigation and adaptation.

Tags: Central America, Climate change, Infrastructure
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