While global negotiations remain challenging, progressive nations can lead by example. Colombia's environment minister, Susana Muhamed, has brought a compelling proposal to Baku: $10 billion in international funding for a $40 billion climate investment strategy.
This ambitious plan extends beyond expanding renewable energy. It emphasizes economic diversification through sustainable agriculture, nature restoration, and ecotourism, creating a greener and more inclusive future. Such a strategy is crucial to achieving the Paris Agreement's goal of limiting global warming to 1.5°C.
Challenges to a Bold Vision
Gustavo Petro's 2022 presidential campaign promised to curtail fossil fuel expansion and reduce Colombia's reliance on coal, oil, and gas. Despite support from environmental and human rights groups, Petro's vision has faced resistance from industry and think tanks. Credit rating downgrades have further complicated financing efforts.
The urgency of climate action is underscored by recent events; Petro skipped COP29 to address severe floods affecting 25,000 families. His administration remains committed, even as Colombia's economy, traditionally dependent on fossil fuels, confronts a turning point.
Fossil fuels accounted for half of Colombia's exports, two-thirds of energy consumption, and 3-6% of GDP over the last decade. Yet global demand for fossil fuels is expected to peak by 2030, leaving producers to compete in a shrinking market. Colombia is already experiencing declining coal demand and depleting oil and gas reserves. Offshore gas exploration is unlikely to reverse this trend due to economic challenges.
Paving the Way to Sustainability
Colombia recognizes the need for economic transition. Its Just Transition roadmap highlights opportunities in renewable energy, tourism, and the bioeconomy. Addressing the needs of communities dependent on fossil fuels is critical. Initiatives like the 2019 green jobs pledge with the International Labour Organization and pilot projects in coal regions demonstrate Colombia's commitment.
Critics argue that Petro's policies are deterring investors, but Colombia's credit challenges predate his administration, rooted in issues like slow post-COVID growth, inflation, and fiscal deficits. A key budgetary strain is fossil fuel subsidies, which surged to $8 billion in 2022. Despite progress in reducing gasoline subsidies, efforts to cut diesel subsidies faced pushback, notably from truckers.
Reforming fossil fuel subsidies requires balancing economic realities with social protections, especially for the 33% of Colombians living below the poverty line.
A Test for Global Climate Finance
Colombia's $40 billion climate plan exemplifies the need for transition financing. Grants, concessional loans, technical support, and access to clean technology are essential to realizing this vision. Public finance can attract private investment, fostering long-term economic growth.
Recent UN biodiversity talks in Cali failed to produce a financing mechanism, raising the stakes for COP29 discussions. For the global community, supporting Colombia—a Global South fossil fuel producer—in its green transition is a strategic opportunity. Success would validate climate action and inspire other nations to follow suit.
Backing Colombia's leadership aligns with global climate goals and reinforces the collective responsibility to secure a sustainable future.