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Add to Preferred SourcesA new platform showcasing real-time data from 33 countries in Latin America and the Caribbean has revealed that on environmentally sustainable post-COVID-19 spending, Latin America and the Caribbean lags behind the rest of the world: 0.5 percent of total spending and 2.2 percent of long-term recovery spending was environmentally friendly in 2020 compared to 2.8 percent and 19.2 percent globally.
The tool, which is based on the Global Recovery Observatory, an initiative led by the Oxford University Economic Recovery Project (OUERP), and supported by UNEP, the International Monetary Fund, and GIZ through the Green Fiscal Policy Network (GFPN), reveals that only six of the region’s 33 countries dedicated more than 0.1 percent of their GDP to recovery spending. A small number did allocate a significant proportion of their budgets to post-COVID-19 efforts, including Chile (14.9 percent), Saint Kitts and Nevis (13.3 percent), Saint Lucia (11.3 percent), Bolivia (10.5 percent), and Brazil (9.26 percent).
The examination of over 1,100 policies shows that approximately 77 percent of the region’s total spending of USD 318 billion was allocated to rescue measures addressing short-term threats and saving lives, while only 16.1 percent has focused so far on long-term recovery plans to revitalize the economy, given the limited financial resources of many of the region’s countries. On average, Latin America and the Caribbean have allocated USD 490 per capita expenditure to post-COVID-19 recovery, compared to USD 650 in Emerging Markets and Developing Economies, and USD12,700 in advanced economies.
The region has been severely affected by COVID-19. Home to 8 percent of the world’s population, Latin America and the Caribbean has reported some 29 percent of deaths from the pandemic, while it is estimated that in 2020, the region had a GDP contraction of 7 percent.
“I applaud the initiative of Latin American and Caribbean ministers to track their progress towards greener recoveries. Our Tracker shows that overall, the region’s green spending does not yet match the severity of the triple planetary crises of climate change, biodiversity loss, and pollution. In order to transition to more sustainable and inclusive economies, nations in the region must build from this good start of tracking to further align their development priorities with green recovery,” said Piedad Martin, Acting Director of UNEP’s Regional Office for Latin America and the Caribbean.
To date, according to the Tracker, a higher proportion of the region’s recovery budget has been spent on unsustainable sectors (USD 7.4 billion) than on environmentally sustainable initiatives (USD 1.5 billion). 74 percent of environmentally negative spending has been directed to fossil energy infrastructure, and 13 percent to unsustainable port and airport infrastructure, which is expected to lead to an increase in carbon emissions.
“The situation of the region is dire, the response to the pandemic is leading us to an increase in debt, limiting our capacity to direct investments to environmental sustainability. Yet, placing climate action as the engine of recovery has never been as important. Our survival and the competitiveness of the region are at stake due to climate change. I call on governments, the international community, and the private sector to support Latin America and the Caribbean in responding to this crisis through investments that allow us to meet the Paris Agreement,” said Costa Rica’s Minister of the Environment and Energy Andrea Meza, who will chair the XXIII meeting of the regional Forum of Ministers of the Environment in 2022.
High-impact chances for the region are numerous and require a mix of policy measures. Key opportunities await in sustainable energy, in particular, non-conventional renewable energy and energy efficiency; investments in zero-emission transport –with a special focus on public transport—; investments in nature-based solutions to ensure adaptation in key sectors, such as agriculture, and urban centers, where most of the population lives.
“The region has reached an economic crossroads. Either government continues to support the old, dying industries of the past or invest in sustainable industries which will drive future prosperity. The new economic opportunities for the region are monumental and wise leaders will embrace them,” said Brian O’Callaghan, lead researcher at the Oxford University Economic Recovery Project.