Apr 5 - McClatchy-Tribune Regional News - John Dorschner The Miami Herald

With little fanfare, hundreds of millions of dollars are flowing annually into Latin America, cleaning up city garbage dumps and country animal manure, financing hydroelectric dams and doing away with coal-burning power plants -- thanks to a foreign-aid program that goes by the name of Kyoto.

For the United States, the program could serve as a view of the future. Although the Bush administration refused to join the Kyoto cleanup effort, the top three presidential candidates have all vowed to become highly active in global-warming issues.

In South Florida, interest is already high, with many residents "going green" in everything from solar panels to hybrid cars, knowing that scientific studies show that this urban coastline would be the first to disappear under water as the icebergs melt.

The Inter-American Development Bank, now holding its annual meeting in Miami Beach, has itself been a leader in promoting the cleanup of greenhouse gases, by investing in hydro power projects in Colombia and Guatemala and a biofuel program in Brazil.

These Latin American efforts are based on a key element of the Kyoto Protocol, in which more than 170 countries agreed to curtail man-made global warming. The 30-some developed countries are working with the 100-plus developing countries in complex schemes to reduce greenhouse gases.

The concept is simple: Because these problematic gases are worldwide, it doesn't matter where on the globe they are removed. Power companies in Japan or the Netherlands often find it cheaper to sponsor cleanups in the developing world than to reduce their own emissions at home -- a swap that's encouraged by Kyoto.

Roughly 3,000 projects have been proposed in Latin America. Marco Monroy, a Miami executive who develops such projects, offers a "semi-conservative" calculation that they bring $260 million a year to that region, climbing to $500 million perhaps next year.

These sums are "frankly peanuts," said Christiana Figueres, the Latin American and Caribbean member on the executive board of the Clean Development Mechanism, a United Nations group that oversees the projects.

"This is just the beginning," Figueres said at a global-warming conference in Coral Gables in January. It's intended to "warm up the muscles for the marathon," when a new Kyoto agreement starts in 2013, one that virtually all experts expect will include the United States.

For a while, Latin America was the world's leading region in these greenhouse-gas projects, but those involved say the projects have frequently stalled because of troubles with financing, bureaucrats demanding payoffs, and the difficulties of doing long-term projects in unstable countries.

In the past two years, China and India have jumped to the forefront, partly because both are so large and have huge pollution problems that need to be cleaned up.

Brazil has been a leader in climate change since it hosted the Rio Earth Summit in 1992, a meeting that eventually led to Kyoto, Monroy said. The country also was the first to propose the concept of swapping pollution in the developed world for cleanups in developing countries.

FLORIDA COMPANIES

Many of the Latin American projects are being developed by two Florida firms: Monroy's MGM International, based in Miami and backed by Morgan Stanley investments, and AgCert Services, a Melbourne company.

MGM is a worldwide leader. In a typical project, it contracts with a Japanese power company required by Kyoto to reduce its emissions from its coal-burning plants. The Japanese company agrees to pay $4 million or $5 million for a Brazilian garbage dump to destroy its methane gas, which is 21 times more powerful in its effect on global warming than the more common carbon dioxide emitted by coal plants.

Burning off methane gas in South Florida landfills and sewage plants has been going on for years -- sometimes just to get rid of the stinking gas, sometimes to convert it into energy to run a power plant, as is happening in 12 places in the state. In either case, no one pays much attention to how much gas is burned.

But in the cleanup of a Brazilian dump, the precise amount of gas burned off is crucial and must be measured by U.N.-approved auditors and engineers. That amount is then converted into carbon credits, which the Japanese company can use to offset its own pollution or sell the credits in the growing carbon markets.

While simple in theory, the reality is much more complex. "There's a lot of research. There are contracts," said Al Vasquez of AgCert Services.

Many landfill and power projects mean dealing with the governments that own them, and that could sometimes involve under-the-table requests for payments by some officials.

"You have to be careful," said Vasquez, particularly because some people will claim that they own the right to the carbon credits from a property when they don't. "You have to do a lot of due diligence. We want to work with the entity that has the emissions license."

"Decision-making in Latin America" can be very difficult," said Monroy, partly because of complex bureaucracies. In China, with its authoritarian government, "it can take two months to develop a plan. It's one year or more in Latin America."

Another issue is financing. Few entities in Latin America have the money to finance Kyoto projects on their own, so developers like MGM International look for investments from European or Japanese firms that want the credits.

What's more, negotiations with Latin American entities are harder, said Jamine Haneef of TFS Energy, a firm involved in carbon trading. The reason is that many Latin Americans have a "relatively high expectation of prices" for the resulting carbon credits, which are trading for about $10 a ton, although there is a wide fluctuation in contracts from $3 to $25.

Even so, the riskiness of developing world markets means that the prices are considerably below the $35 that carbon is trading for in the European market, which has its own requirements for reducing greenhouse gases.

'LOW-HANGING FRUIT'

Monroy said that for several years, his firm concentrated on "the low-hanging fruit" in Latin America, particularly removing hydrofluorocarbons from industrial plants, because these gases cause 11,700 times as much global warming as does the more prevalent carbon dioxide and thus earn much larger carbon bonuses.

"Those projects are pretty much gone," said Vasquez, of AgCert. His company has done much of its work in Brazilian farming operations. AgCert puts livestock and pig manure into lined pits about the size of Olympic swimming pools and then burns off the methane.

While each of these pits is small, the firm aggregates many of them into a project to make for a sizable number of credits. AgCert reports that it has registered 85 projects for work at more than 600 locations in Latin America.

Last December, representatives of 190 countries met in Bali, Indonesia, to discuss what to do after the Kyoto agreement ends in 2012. Developed countries insisted that more must be done by the so-called "Plus Five" countries -- China, India, Brazil, Mexico and South Africa.

Those countries, considered by Kyoto to be developing nations, are responsible for emitting 25 percent of the world's greenhouse gases, according to Figueres, the board member of the Clean Development Mechanism.

Leaders in Europe and elsewhere want those five countries to take responsibility for cleaning up emissions and not simply wait for foreign investment to do so. The five countries said that was unfair. They said the burden needs to remain on the major developed nations.