2021 is a make or break year for people and the planet. The international community needs to orchestrate a sustainable recovery from the pandemic while delivering more ambitious commitments to protect nature and ensure a climate safe future. In LAC, there is the added challenge of responding to tough issues such as inequality, poverty and unemployment, which COVID-19 has considerably worsened.
As global temperatures and fossil fuel production continue to rise, there is no time to lose to change course. How countries respond to the pandemic will likely determine whether we can limit global heating to 1.5 degrees Celsius. If countries fail to deliver sustainable recovery, we will likely be unable to prevent climate breakdown and impacts will hurt everyone especially the most vulnerable as we saw in Central America with hurricanes Eta and Iota.
The pandemic has underlined the need for international cooperation to confront these interconnected problems. At the recent Climate Ambition Summit and One Planet Summit, many countries announced impressive measures. This is a vital first step to help ensure that this year’s UN climate and biodiversity summits deliver the ambition we need and reinforce the case for sustainable recovery in countries.
Connecting decarbonization and resilience plans with sustainable recovery is critical
The UN Secretary-General, António Guterres, is aiming to build a Global Coalition for Carbon Neutrality this year. The UK is also making the goal of reaching net-zero by 2050 a priority for its COP26 presidency. Over 100 countries have already committed to carbon neutrality by around mid-century including Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Grenada, Jamaica, Panama, and Uruguay.
In LAC, decarbonization will require transformations that complement development objectives including creating jobs. These transformations such as delivering electric public transport carry important co-benefits such as reducing air pollution. Countries will also need to continue to back renewable energy, promote the electrification of energy uses at home and industry and boost low-carbon agriculture and forest protection.
Formulating long-term strategies requires a national conversation to create a joint vision for decarbonization, where emissions reductions and development priorities are addressed. This conversation is key to foster understanding and transparency around important sectoral choices, such as identifying where new jobs will be created and how to support affected communities. From there, governments working with stakeholders, can define a roadmap of actions to deliver net-zero emissions, such as how many electric buses will be needed. Contingency plans for a world of 2 degrees or higher will also be an essential consideration to ensure food security for example.
What are 5 ways decarbonization and resilience plans matter for sustainable recovery?
1. Provide a strong signal to the private sector to boost growth and competitiveness
Designing long-term strategies (LTS) towards net-zero emissions by 2050 and creating stronger goals for 2030 can send powerful signals to investors and businesses to encourage them to embrace new technologies, markets, and public-private investment opportunities to boost sustainable recovery in the short-term. For SMEs, there are myriad opportunities such as enhancing energy efficiency, which can support decarbonization and their bottom line. LAC countries will also need to move quickly to improve competitiveness and avoid stranded assets given geopolitical shifts as top trade and investment partners (e.g., EU, China and the US) back carbon neutrality as well.
2. Attracting external investment and support from MDBs and donors
LTS help identify a roadmap of actions to reach net-zero emissions and build climate resilience. This in turn can help identify what projects, policies, reforms, studies and capacities are needed to deliver actions across sectors. The schedule of activities should start now and clarify milestones to be achieved over time. This can encourage dialogue on areas where international climate finance can be directed. For example, MDBs could direct support through policy-based loans to advance reforms and policies to enable private sector investment. International climate funds can be used to move ahead with flagship projects and other funds could address funding needs for project feasibility studies. For example, the IDB and the French Development Agency provided a USD 380 million policy-based loan to Costa Rica to support its national decarbonization plan, along with over eight million in grants.
3. Creating jobs and support for a just transition
The transition to net-zero emission economies in LAC could help create 15 million net new jobs by 2030 in renewable electricity, construction, and manufacturing while supporting sustainable recovery. Yet while more jobs will be created, millions will also be lost in fossil fuel extraction and animal-based food production. LTS can help anticipate these changes and inform a just transition where countries develop policies, which facilitate the reallocation of workers, offer new business models, enhance social protection and support to affected workers.
4. Improving public spending to boost social resilience and fiscal responsibility
Decarbonization and building resilience can bring benefits. Costa Rica’s Decarbonization Plan will bring USD 41 billion in net benefits by 2050 through energy savings, improvements in ecosystem services and agriculture yields. Implementing the Decarbonization Plan would require investments of about USD 37 billion and the forgone economic value of land used to reforest. But it would generate USD 78 million in benefits – more than twice as much as its costs. Clarity on key areas of investment to decarbonize can make better use of limited public resources to enable sustainable recovery and achieve climate objectives. The benefits are also an opportunity to rethink fiscal policy tied to fossil fuel dependent revenues, enabling the transition to a greener fiscal matrix, with net gains for the government, industries and households.
5. Enhancing the protection of nature can help reduce emissions and boost resilience
In LAC, agriculture, forestry and land-use made up roughly half of GHG emissions making it a critical sector for emissions reductions. The region faces the highest loss of species and habitats, which affects the provision of natural resources that contribute to livelihoods and ecosystem services. These ecosystem services generate more than USD 15 trillion per year in economic value for LAC such as water purification. Protecting nature can also build resilience to worsening climate impacts through nature-based solutions. The restoration of damaged land and conserving other areas makes economic sense too. In LAC, every hectare restored can bring USD 1,140 in economic benefits to local economies. Nature-based solutions are a fundamental part of the recovery and can help to create jobs, generate income, leverage private sector investment and protect critical ecosystem services.
We must embrace this opportunity now to safeguard our future
With an estimated USD 12 trillion earmarked globally to support the recovery, long-term decarbonization and resilience plans can play a key role in ensuring spending and investments are aligned with a sustainable recovery and the Paris Agreement. A recent study says that the world could start to bring the 1.5 degrees goal within reach if governments used only 10% of the planned stimulus to support climate-friendly projects.
Achieving sustainable recovery and securing a climate safe future is possible. Long-term decarbonization and resilience plans provide a powerful tool to get us on the right path.
Further reading
Jobs in a Net-Zero Emissions Future in Latin America and the Caribbean
Costa Rica’s Decarbonization Plan provides a framework for the future
Can nature support a green and inclusive economic recovery?
Long-term decarbonization strategies can guide Latin America’s sustainable recovery
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Photo: Travis Walser
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