A Green Recovery in Latin America

A Green Recovery in Latin America

Stimulus cash in the region aims to create environmentally friendly jobs, but there is room for far more.

This week, Latin American policymakers presented road maps to a low-carbon economic recovery in two different international forums. Costa Rica, for its part, aims to build nodes for different green jobs across the country. These will be meticulously planned according to such factors as energy demand and wind speed, as detailed by a senior official at a United Nations sustainable development forum.

At the Inter-American Development Bank (IDB) annual assembly, Colombian officials mentioned their five-year stimulus plan, which likewise aims to create 114,300 green jobs. “Colombia today is the Latin American country that is leading the energy transition,” said President Iván Duque, adding that the country recently pledged to reduce its greenhouse gas emissions by 51 percent by 2030.

In Latin America, as elsewhere in the world, political leaders are at least paying lip service to making their post-coronavirus economies more sustainable. Preliminary reports on the makeup of stimulus packages around the region suggest that a few are even taking concrete steps toward green job creation. On balance, though, they could do far better.

Vivid Economics’ Greenness of Stimulus Index identified new sustainable investments such as green infrastructure in Argentina, Brazil, Colombia, and Mexico; conservation programs in Colombia; and subsidies for green products in Brazil. Still, each of those four countries earned aggregate negative scores in the index: They have also pumped money toward environmentally harmful products and infrastructure investments, and eased some environmental standards.

A U.N. Environment Program report that tracked recovery measures in the world’s 50 largest economies ranked Chile’s recovery spending the greenest in Latin America. The Chilean government says it is committing at least $1.3 billion to environmentally friendly measures such as installing electric bus terminals and retrofitting public buildings.

The blueprint for going further in Latin America is clear. In response to the pandemic, both the U.N. and an IDB-International Labor Organization team published detailed reports on sectors in the region that are ripe for a green recovery, including renewable energy, health care manufacturing, and sustainable agriculture and tourism. According to the IDB and the International Labor Organization’s calculations, decarbonization in the region could create 15 million net jobs.

The window for making key choices about stimulus funding is still very much open in Latin America. Elections continue across the region this year, which means that political leadership could change. And many nations are in ongoing talks with international lenders.

What shapes a stimulus? Latin American political elites who benefit from the current economic status quo, from agribusiness to oil, offer plenty of inertia against green transformations. But lending organizations such as the International Monetary Fund and World Bank have unique influence through their power to condition future loans on greener policies.

Yet according to Boston University’s Global Development Policy Center, in the over 15 Latin American countries with IMF programs in response to the pandemic, only in four countries does the funding come with recommendations or conditions for a green recovery.

The big fish. In carbon heavyweight Brazil, where a single municipality emits more carbon dioxide than all of Panama, President Jair Bolsonaro has condemned even international discussion of his environmental policies as attacks on national sovereignty.

Former U.S. climate officials have pushed the Biden administration, which has listed climate as a key priority for Latin America, to take an aggressive stance toward Brazil. President Joe Biden so far appears to be opting for quieter diplomacy so as not to burn any bridges. Last month, he sent a letter to Bolsonaro about opportunities to work together on climate.

Where the stimulus is untrackable. If there is one black hole of environmental information in the region, it is Venezuela. The ability to understand and coordinate around its environmental policies would be a major benefit of a resolution to the country’s ongoing political crisis.

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