WHILE some sectors of the US administration still claim that climate change is a hoax, the Latin America and the Caribbean region is benefiting from what others see as a new industrial revolution and business opportunity.
A World Bank report says the region leads the way in attracting investments to fight climate change and has become an attractive market for investment in sustainable urban transport and infrastructure and is expected to reach more than $1trillion in investments by 2030.
The report identifies seven sectors with enormous potential to attract private investment for renewable energy, storage of energy and solar energy outside the grid, agribusiness, green construction, urban transport, water supply and urban waste management.
According to the report, “Creating Markets for Climate Businesses” the transport and climate-smart infrastructure sectors are expected to generate more than $1 trillion in investments for 2030 in the region.
It indicates that in order to develop the potential and catalyze private investments, a combination of political reforms and innovative business models must be promoted. This would help Latin America and the developing countries to achieve the climate goals set in the historic Paris Agreement, signed by 33 countries in the region.
Five of the largest countries in the region -Brazil, Chile, Colombia, Mexico and Peru- lead sustainable development in sectors such as renewable energy, urban ecological infrastructure and energy efficiency, as well as smart cities. Costa Rica aims to be the first carbon-neutral nation by 2021 and to have 100% renewable energy production by 2030.
The investment potential is enormous: In Mexico, for example, it is indicated that investment potential from now to 2030 is $791 million, mainly in renewable energy and sustainable urban infrastructure. In Argentina the potential is $338 million and in Colombia s $195 million. In Brazil, the investment potential is even greater at $ 1.3 billion.
“The private sector is the key to fighting climate change,” said IFC Executive Director Philippe Le Houérou. “The private sector has the innovation, financing and necessary tools. It is in our hands to help unlock more private sector investments, but this also requires government reforms and innovative business models, which together will create new markets and attract the necessary investment. In this way, the commitment to smart cities and renewable energy set in Paris can be fulfilled.”
With 80% of its population living in cities, Latin America and the Caribbean is the most urbanized region in the world. The way in which your cities grow will be fundamental to reach the climate change mitigation objectives.
In the construction sector, green buildings are forecast to contribute $80 billion in investment opportunities until 2025. Countries such as Colombia, Costa Rica, Mexico and Peru recently adopted green building codes. As a result, it is expected that new buildings in these countries will consume between 10 and 45% less water and energy.
Latin America became a leader in the development of rapid transit bus systems (BRT). including the BRT system in Curitiba, Brazil Buenos Aires, Argentina.
Buenos Aires, which accounts for almost half of Argentina’s GDP has begun an ambitious $400 million transportation plan of dollars to boost urban connectivity, to reduce congestion and pollution by slashing usage of automobiles.
Panama is testing an electric bus system and building a third subway system.