Promoting just and inclusive energy transitions

Promoting just and inclusive energy transitions

Our region has been the most affected by the COVID pandemic in relative terms, both in number of cases and number of deaths from COVID. The region has experienced a setback equivalent to 27 years of poverty, with the loss of tens of millions of jobs. And, despite the fact that LAC is the region with the highest level of vaccination worldwide, the COVID pandemic is still ongoing, with a degree of uncertainty about its evolution.

In this context, thinking about an energy transition represents a challenge, since it requires a clear commitment from governments and the private sector to promote investments in renewable and sustainable energy, which take into account a long-term vision and the commitments of the Agreement of Paris. The decarbonization of the energy sector, including transport, has become an essential element of climate change mitigation.

Advancing in the development of renewable energy in the region is important not only to fight climate change, but also to generate quality employment: these investments generate three times more jobs than investments in fossil fuel energy, and retraining opportunities that the transformation of the energy sector entails, creating better-paid jobs with a future.

Therefore, the energy transition can be an opportunity to reactivate employment in the energy sector, and provide sustainable jobs for new generations. The IDB and the ILO estimate that, by 2030, decarbonization could create 15 million net new jobs in Latin America and the Caribbean. These new jobs will be part of a new digital economy, which includes the creation of local value chains.

A transition to cleaner and more sustainable energy requires the adoption of innovative solutions and business models and, in turn, merits a greater participation of a diverse group of talents that promote the best alternatives for the country. Consequently, it is essential to promote a greater participation of women in the energy sector so that both women and men benefit from the jobs generated in the sector with an equitable participation.

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Decarbonization not only refers to the use of renewable energy, but also to the reduction of the use of fossil fuels in transport, the sector that generates the highest carbon emissions in several countries. The electrification of transport is shown as a key element of the decarbonisation plans in several countries, and also raises the possibility of designing public policies for more inclusive mobility, with quality and sustainable public transport.

An essential issue is not to forget that the energy transition cannot leave behind those who still do not have access to energy. Closing the access gap that still persists in our region is a priority. Despite the great progress that the region has made, 18.5 million people still do not have access to electricity, especially in rural areas.

We have estimated that approximately US$25 billion is required to achieve universal access by 2030 in the region. Providing energy services to the population improves access to health, education, increases the time available for new activities, contributes to the creation of productive processes, among other benefits. This process can also be strengthened through innovation and digitization.

In this context, the 5th Ministerial Meeting of the Energy and Climate Alliance of the Americas (ECPA) will be held on February 10 and 11, in Panama City, Panama, in a hybrid format, organized by the Secretariat National Energy Agency (SNE) of Panama, the Organization of American States (OAS), with the support of the IDB and ECLAC. The event will feature the participation of high-level representatives of energy ministries from more than 20 countries in the region, as well as around 100 participants representing international organizations, public and private companies, and civil society.

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The ministerial meeting is an important platform for dialogue and exchange of experiences between high-level actors, and helps foster conversations to find solutions and compromises to advance the energy transition. Among various topics, it will address how to accelerate investments to achieve the decarbonization goals established in the Paris Agreement, the role of renewable energy planning in the expansion of energy systems, the actions necessary to achieve the goal of universal access to energy in 2030 and experiences will be presented to accelerate the deployment of electromobility in an inclusive manner. The role of the private sector as a key player and catalyst for investment will undoubtedly be a crosscutting factor in the talks.

Within the framework of ECPA, the IDB coordinates the development of a session of the RELAC initiative, which seeks to promote institutional and regulatory transformation with the aim of accelerating investment to achieve decarbonization goals. RELAC is a climate action platform to work together and that allows us to be more effective as a region to accelerate the development of renewable energies. In addition, the IDB is organizing a session to discuss how to achieve universal access to energy by 2030, including how to accelerate electrification in the last mile, what business models can be developed, how to address the challenge of modern kitchens and sustainable, where to direct investment to make better use of resources.

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The energy transition is directly related to the IDB Group’s Vision 2025, the roadmap to accelerate sustainable and inclusive growth, since it touches on several of its priority areas, through sustainable and inclusive economic and social development for the coming years. , promoting integration between countries, and the development of a new digital economy. One of the fundamental pillars of Vision 2025 is to support countries in the implementation of actions to combat climate change, to strengthen and achieve their goals of net zero emissions, attracting investment to the region, promoting the decarbonization of the energy sectors of the region and its resilience.

The IDB’s commitment to the energy transition and decarbonization is clear, which is why as of 2023 all our operations will be aligned with the Paris Agreement, including actions for the adaptation and mitigation of climate change. The IDB will continue to support countries, strengthening their capacity for technological change, improving their legal and regulatory frameworks to pave the way for private and public sector investments, promoting resilient development, aligned with policies and actions to combat climate change and, most importantly, providing an opportunity for the population of Latin America and the Caribbean to recover from the crisis in a safe, fair and sustainable way.

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