The Inter-American Development Bank (IDB) presents key ways countries can decarbonize their economies in the study Achieving Net-Zero Prosperity: How Governments can Unlock 15 Essential Transformations. The IDB released the study today, as part of the Latin America and the Caribbean Climate Week held in Santo Domingo and organized by the United Nations Framework Convention on Climate Change and the Government of the Dominican Republic.
“Our goal is to inform climate policy. This report provides valuable input for national strategies, decarbonization plans and their implementation in different sectors, and Nationally Determined Contributions (NDCs). But there won’t be a single solution that fits every country,” said Graham Watkins, Chief of the IDB Climate Change Division, during the presentation of the report. “At the IDB, we are committed to supporting our countries as they work towards the Paris Agreement objectives for the region. That is why we encourage stakeholders to use the tools and resources we provide for their national plans,” he added.
Previous IDB research has found that to meet the Paris Agreement goals – becoming resilient to climate change and keeping global warming well under 2°C –, countries would have to redirect 7 to 19% of GDP worth of spending decisions by government agencies and the private sector every year. These figures do not represent a net cost because the benefits of climate action exceed the costs of the climate crisis. Additionally, the IDB estimates that Latin America and the Caribbean can create 15 million net jobs and achieve net additional growth of 1% by moving towards carbon-free economies.
This new study, which was funded by IDB’s French Climate Fund and conducted in partnership with the Institute for Sustainable Development and International Relations (IDDRI), explains what it means to decarbonize an economy, and how to do it. It lays out 15 options for governments to begin transitioning to a prosperous future without carbon emissions. The alternatives include promoting solar and wind energy; designing cities that are easy to navigate by bicycle, on foot, or in safe and high-quality public transportation; conserving and expanding forests and other ecosystems; developing healthy diets with low carbon footprints; electrifying transportation, buildings, and industry; or moving towards a circular economy that wastes less and recycles more.
The report also explains how to tap into the advantages of these transformations, since certain reforms would yield social and economic benefits like lower energy and transportation costs, better health, fewer accidents and traffic jams, and better quality of life. The recommended changes would also reinforce nature’s ecosystem services, protect biodiversity, and generate tourism income.
The analysis maps out the barriers to carbon neutrality for public and private entities. But it also allows governments to know what they could do to remove those barriers and enable real decarbonization action.
The study also aims to provide a call to action, underscoring that change will not happen on its own and requires an approach far more comprehensive than setting a price on carbon or unilateral efforts by governments’ environmental authorities.
Currently, 11 countries in Latin America and the Caribbean have confirmed their commitment to reaching net-zero emissions, many of them by 2050. Attaining the objectives of the Paris Agreement and keeping global warming under 2°C and close to 1.5°C — without sacrificing sustainable development — will require a concerted effort by the public and private sectors, civil society, and a range of economic stakeholders.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance, and training to public and private sector clients throughout the region.