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Uruguay’s Commitment to Climate Action: A Story of Success

December 4, 2024 por Luiz Ros - Sofía Polcaro Leave a Comment


Uruguay’s success in climate action lies in its robust national policies, supported by strong private sector and civil society participation, which have embraced sustainability concepts. Complementing these efforts are ambitious projects backed by the Inter-American Development Bank (IDB).

Uruguay’s milestones and the challenges it tackles are built on aspects not always reflected in indicators, such as institutional capacity, data generation and transparency, and financial and fiscal frameworks. Let’s explore how the IDB supports Uruguay in these three fundamental areas:

Institutional Capacity

In 2009, Uruguay established the National Climate Change Response System, an inter-institutional group under the Ministry of Environment. This system drives the development and implementation of the country’s commitments under the Paris Agreement, ratified in 2016. It has fostered a framework that includes the National Climate Change Policy, Nationally Determined Contributions (NDCs), the Long-Term Climate Strategy, and other tools like National Adaptation Plans for agriculture, cities, coasts, and energy.

The IDB has provided technical assistance for the development and implementation of Uruguay’s NDC measures, which are crucial to fulfilling its environmental commitments.

Data Generation, Openness, and Transparency

Uruguay stands out in the region for its leadership in data openness and transparency. With the support of the Electronic Government and Information Society Agency (AGESIC), the country has developed an open data catalog that includes Greenhouse Gas Inventories, the National Energy Balance with an extensive historical series, and NDC objectives and measures.

The IDB has bolstered this agenda through various initiatives:

  • In 2022, it organized an open climate data competition, encouraging researchers and communicators to utilize these tools.
  • It supported the creation of a Native Forest Mapping Project, which helped measure progress for the Climate Change Index-Linked Bond (BIICC) indicator.
  • In 2024, under the “Knowledge for Results” initiative with the Ministry of Industry, Energy, and Mining (MIEM), the IDB enhanced data management efficiency in the energy sector.

Currently, with IDB support, Uruguay is part of a regional public good initiative to develop information for greenhouse gas (GHG) emission factors in the construction sector, in collaboration with other countries in the region.

Financial and Fiscal Framework for Climate Change

In 2020, the Ministry of Economy and Finance (MEF) formalized its intention to play a larger role in public climate policy formulation. The MEF’s priorities include:

  • Developing a roadmap to integrate climate change and natural resource conservation into economic policy.
  • Creating financial instruments like the Climate Change Index-Linked Bond (BIICC) issued in 2022.
  • Designing an IDB CLIMA loan for the energy sector.

Uruguay actively participates in the Regional Climate Change Platform for Ministers of Finance, Economy, and Planning, led by the IDB. In collaboration with the Central Bank of Uruguay and with IDB support, the country is advancing a sustainable finance agenda through the Sustainable Finance Roundtable and is working on the development of a green taxonomy.

At a regional level, Uruguay has accessed IKI financing for greening fiscal management and is participating in a pilot project on natural capital and biodiversity, executed by Stanford University and supported by the IDB.

The IDB: A Strategic Partner for Sustainability and Climate Action in Uruguay

Infrastructure: Uruguay is deepening energy sector decarbonization through green hydrogen development, supported by the IDB. For adaptation, the IDB helped craft the National Climate Change Adaptation Plan for the energy sector.

Following the severe drought from 2022–2023, which caused losses equivalent to 2% of GDP, Uruguay is developing a Drought and Flood Response Protocol with the support of a $200 million policy-based loan for water resources and solid waste, approved in 2023.

Sustainable Development: Uruguay has advanced a social and urban integration program to improve housing solutions for families in informal settlements, incorporating climate mitigation and adaptation measures through a results-based loan. Additionally, the IDB supported the development of a timber construction roadmap with technical cooperation funds.

Over the past two years, the IDB has also supported agroecology development and the creation of livestock environmental footprint indicators, coordinated by an inter-institutional group to inform decision-making. Currently, the IDB is helping develop an early warning system managed by the National Emergency System.

Social Development: Uruguay is strengthening its National Care System under a Ministry of Social Development program, supported by an IDB loan. This includes developing a protocol for responding to climate shocks and training caregivers.

Under the Gender and Climate Change Action Plan of the Ministry of Environment, the IDB supports gender mainstreaming in climate policies, focusing on access to green financing for women entrepreneurs and incorporating an intersectional perspective.

Institutions for Development: Uruguay has demonstrated leadership in updating tools to encourage climate research and innovation through the National Agency for Research and Innovation, leveraging its participation in the Latin American Network of Innovation Agencies, a regional public goods initiative coordinated by the IDB.


Filed Under: Climate change Tagged With: climate change, decarbonization, long-term decarbonization strategies, resilience, sustainability

Luiz Ros

Since April 1, 2023, Luiz Ros has been appointed IDB Representative in Uruguay. He joined the Bank in 2007 as a Senior Business Development Specialist. During his career at the Bank, he has held several executive positions, including most recently as acting Secretary, Deputy Secretary to the Presidency, Manager of the former Opportunities for the Majority Sector (OMJ) between 2008 and 2016, and Special Advisor on Innovation to the Presidency. Previously, he was Global Director for the Markets and Enterprises Program, while also serving as Global Director for local Sustainable Entrepreneurship in China, India, Indonesia, Mexico, and Brazil. He was a director at the Brazilian Ministry of Environment between 1999 and 2001 and worked for the World Bank for 3 years as manager of the Brazil Biodiversity Fund, in the Country Office. Mr. Ros, a citizen of Brazil, holds a bachelor’s degree in economics and a master’s degree in International Relations from the University of Brasilia, a specialization from Syracuse University in the Global Climate Change Program and an executive program on Digital Transformation in Government.

Sofía Polcaro

Sofia is a consultant for the Climate Change and Sustainability division of the Inter-American Development Bank in Uruguay. She is an economist with more than 15 years of experience in finance and natural resource economics. Prior to joining the IDB, Sofía worked as a financial analyst in private banking, as an economic analyst in the public sector and as a consultant in other multilateral organizations. Sofía is a professor at the Universidad de la República, where she also holds a master's degree in economics and a postgraduate degree in Climate Change from the Universidad de Quilmes.

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Sustainability

This blog is a space to reflect about the challenges, opportunities and the progress made by Latin American and Caribbean countries on the path towards the region’s sustainable development.

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