The challenge for Latin America and the Caribbean: reducing emissions by 2030

The Development Bank of Latin America and the Caribbean has presented its Economy and Development Report titled 'Renewed Energies: a just and sustainable energy transition', highlighting the importance of reducing greenhouse gas emissions in the region by 2030. According to the report, Latin America and the Caribbean contribute 11% of these emissions, while developed countries represent 45%. These data reflect the urgent need to implement concrete measures to mitigate the environmental impact in the region. In disaggregated terms, the agricultural sector, forestry, and other land uses were responsible for 65% of the emissions generated in Latin America and the Caribbean in 2019, while the rest came from the consumption of fossil energy. Globally, fossil energy consumption is the main emitter, representing 80% of total emissions. The region's commitment is to reduce its emissions by 10.8% by 2030 compared to 2020 levels. This goal poses a significant challenge but also opens the door to new opportunities in terms of energy transition and sustainable development. Fernando Álvarez, senior economist at the CAF's Socioeconomic Research Directorate, emphasized the importance of undertaking a "new energy transition" adapted to regional realities, considering economic growth, poverty levels, and the energy gap present in the region. One of the options proposed by the Development Bank is the use of natural gas, which, although a fossil fuel, generates lower emissions compared to oil and coal. According to estimates, if 50% of coal and oil consumption in the region were replaced by natural gas, emissions could decrease by 6.5% by 2030, representing a significant step towards established environmental commitments. In addition to natural gas, there is a need to increase electrification rates and promote the use of unconventional renewable energies. Currently, 57% of electricity generation in the region comes from renewable sources, while 11% corresponds to unconventional renewables such as wind and solar energy. Other proposed measures include improving efficiency in energy systems, reducing losses in energy production and distribution, and promoting carbon capture and storage technologies. These actions are essential to ensure an effective and sustainable energy transition in the region. The report also emphasizes the importance of implementing cross-cutting policies related to green financing, the circular economy, the market, carbon tax, and the development of innovative technologies for emissions mitigation. In this context, the Development Bank has set a goal to allocate 40% of its project portfolio to green initiatives by 2026, demonstrating its commitment to sustainable development and environmental protection in Latin America and the Caribbean.