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Greenhouse gas (GHG) emissions resulting from human activity have increased globally in recent years, reaching historic highs in 2022. Latin America and the Caribbean contribute with approximately 11% of total global emissions, being the agriculture, forestry, and other land use sectors the primary contributors in the region. The upward trajectory of global emissions has caused the average temperature of the planet to rise by 1.2 °C compared to pre-industrial levels. At the current rate of emissions, there are just over 28 years left to limit the temperature increase to 2°C and only 9 years to exceed the 1.5°C threshold.

In the light of this discouraging scenario, the international community seeks to decarbonise the economy and limit the global temperature rise to below 2°C. To achieve this, it has been agreed that each country will determine its own pathway toward decarbonisation (Just Transition). The Just Transition is a key concept to ensure that the transformation toward a low-emission economy occurs equitably for all, guaranteeing that the rapid implementation of low-carbon technologies and systemic changes toward decarbonisation are inclusive and integrated with development priorities at all levels.

The International Labour Organization (ILO) estimates that keeping global warming below 2°C could create 18 million net jobs worldwide. Furthermore, a Just Transition has also the potential to advance the achievement of several Sustainable Development Goals (SDGs), such as improving global GDP by 2.5% by 2050 compared to current levels (SDG 8), phasing out fossil fuel consumption subsidies worth $400 billion annually (SDGs 7, 12), and drastically reducing the social and environmental costs of these fossil fuel subsidies, estimated at $5 trillion per year (SDGs 7, 8, 12) .

Despite these benefits, the Just Transition toward a low-emission economy not only poses a significant challenge in terms of emission reductions but also involves profound social and economic repercussions required to achieve this goal. For instance, from an economic perspective, it is estimated that a transformation of this scale will necessitate global investments equivalent to 1.3% of global GDP annually through 2050. This implies tripling investments by 2030 compared to current levels worldwide and, for developing countries, quadrupling them. From an energy perspective, it means that one-third of global oil reserves, half of gas reserves, and more than four-fifths of coal reserves should remain untapped. From a labour perspective, it requires significant market transformations to meet new qualification demands while adapting existing ones. Finally, from an agricultural perspective, it involves enhancing landscape management, agriculture, and food systems to generate resilience against climate change while simultaneously reducing emissions.

Latin America and the Caribbean face the challenge of contributing to the global decarbonisation of the economy while addressing long-standing structural development challenges (closing the income gap with developed countries, reducing inherited poverty and inequality), improving their agri-food production systems, and replacing revenues derived from fossil fuel exports. This latter aspect is particularly important for the region, as it includes hydrocarbon-producer countries that export these resources and derive fiscal income from them. A transition that entails a considerable reduction in the consumption of these energy sources will undoubtedly impact the economies of the region. On one hand, it will affect the amount of resources available for public policies, and on the other, it will require a productive, fiscal, and financial reconfiguration.

For Latin America and the Caribbean, the transition to a low-emission economy cannot occur without considering these realities. Sustainable development certainly involves reducing GHG emissions to create a more sustainable planet (justice between generations) while also closing the existing per capita income gaps with developed countries (justice between countries) and reducing social, food, and energy inequalities (justice among citizens) (CAF, 2024).

Objectives:

• The objective of this panel is to analyse the challenges and opportunities presented by the Just Transition for Latin America and the Caribbean and to identify international experiences that could be implemented in the region to achieve this goal.

Moderator & Keynote Speaker:

Alicia Montalvo. Climate Action and Positive Biodiversity Manager. CAF-Development Bank of Latin America and the Caribbean.

Speakers:

• Gloria Alvarenga. Director of Integration, Access and Energy Security. Latin American Energy Organization.
• Felipe Corral Montoya. Advisor. Ministry of Mines and Energy. Government of Colombia.
• Jodi-Ann Wang. Global Policy Fellow. Grantham Research Institute – London School of Economics.
• Mónica Lafón. Advisor. SIA Desarrollo.