55% Colombia's current economic model is highly dependent on exports from coal, oil and gas.
Colombia aims to reach net zero by 2050, however its current economic model is highly dependent on rents from extracting coal, oil and gas. Substantially reducing economic reliance on these sectors, which contributed 55% of exports in 2020, would be no small feat. However, if the country hopes to minimise the volatility and costs associated with a long-run decline of the global fossil fuel trade, it will need to start developing and implementing contingency plans in the current decade.
Colombia aims to reach net zero by 2050.
A two-year research project, funded by WTW long-term partner Agence Française de Développement (AFD) and with close collaboration and support from Centro Regional de Finanzas Sostenibles (CFS) at Universidad de Los Andes, reveals that if Colombian policymakers do not respond proactively to these risks, the country could face lost economic output of more than $88 billion (or 27% of 2019 GDP) between now and 2050 in a world that decarbonises in line with the Paris Agreement. For Colombia, reaching “net zero” means not just reducing emissions, but dealing with the impact of global shifts on trade, taxes, and jobs.
$88 billion Lost economic output Colombia could face if policymakers do not respond proactively to these climate risks.
Our report provides a series of recommendations for how Colombian policymakers, central bankers, financial institutions and corporates can more effectively incorporate transition risks and opportunities into their planning processes.
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