In uncertain times like these, it can be easy to focus on what is going wrong. At the OECD Development Centre, we prefer to focus on where to go, and how to get there. This is exactly the approach we take with our work on the just green transition in Latin America and the Caribbean (LAC). The LAC region faces many challenges. Its citizens face rising poverty and high inequality, and the economic outlook is gloomy, aggravated by a difficult global context. Some people might thus argue that green policies should not be a priority for the region. They might also point out that per-capita CO2 emissions remain well below those of other regions, and that the energy supply is cleaner in LAC than elsewhere: 33% comes from renewables, compared with a global 13%. Yet, we see three strong reasons for the region to seize the green opportunity. First and foremost, climate action makes human sense. 13 of the 50 countries most affected by the climate emergency are in the LAC region. Its vulnerable populations are suffering the most. In recent months, a mega-drought has deprived thousands of Uruguayans of safe drinking water. Earlier this year, many people living in Brazil's Sao Paulo state lost their homes to floods and landslides. Second, climate action makes economic sense. For Caribbean countries, rising sea levels could cost up to USD 22 billion, or 10% of GDP, by 2050, with major financial implications also for international partners. Countries that depend on fossil fuels risk major losses in revenue if they don’t adapt to global demand for clean energy. Third, climate makes political sense. About 2 in 3 Latin Americans believe that climate change is a very serious threat. More than half (55.8%) say that the enA second priority is to compensate. Not everyone will gain from the green transition immediately. Governments need strong and targeted social protection systems and compensation mechanisms to keep all socio-economic groups, territories and generations onside. They need to educate and reskill citizens to meet new labour market demands. In other words, the green transition needs to be part of a broader rethink of the social contract. It needs to be just and advance sustainable growth. Third, they need to collaborate. No one country or sector can address climate change alone. And governments need to build strong partnership with the private sector. I thus welcome the outcomes of the EU-CELAC Summit in July and was pleased to learn about Germany's recent efforts to strengthen cooperation with LAC countries on renewable energies. At the OECD, we are looking forward to the 1st Ministerial Summit on Environmental Sustainability in Costa Rica in October. And our LEO 2023 is already in the pipeline, focusing on how to close the region’s investment gap. At the OECD Development Centre, we stand ready to help the LAC region seize the potential of its triple – green, digital, social – transition. I look forward to seeing you at Latin America Day! Ragnheiður Elín Árnadóttir Director OECD Development Centre vironment should be a priority even if it slows down economic growth. In a region marked by high social discontent, addressing their needs can help rebuild public trust. The green transition also bears huge potential for jobs and productive transformation. We estimate that it could result in 10.5%more net jobs created in LAC by 2030 with respect to 2020. The region is home to around half of global biodiversity and 23% of forest cover. It also holds key minerals for the green transition: 61% of global lithium, 39% of copper, and 32% of nickel and silver. So how can leaders in the LAC region seize the green opportunity? Our Latin American Economic Outlook (LEO), a flagship report that which we publish annually with UN-ECLAC, CAF- Development Bank of Latin America and the Caribbean, and the European Union, has some answers. First, they can innovate. Governments need to mobilise considerable financial resources, despite limited fiscal space. Taxes and subsidies should discourage activities that harm the planet. In the LAC region, environmental tax revenues amount to 1% of GDP, below the OECD average of 2%. Partnerships with the private sector will be key.Governments can issue green, blue and sustainability-linked bonds, facilitate debt-for-climate swaps, reinforce the role of development banks, and develop or adopt green taxonomies to access the expanding sustainable finance opportunities. Countries like Chile, Colombia and Uruguay have already shown that it can be done. The green transition also bears huge potential for jobs and productive transformation. Seizing Green Opportunities in Latin America and the Caribbean 20 OECD Development Centre
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