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.
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.
“For Colombia, reaching net zero means not just reducing emissions, but dealing with the impact of global shifts on trade, taxes, and jobs.”
Matt Huxham | Director, Sovereign Transition Risk, Climate and Resilience Hub, WTW
Complete the form to download the full report.
WTW provides data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help businesses sharpen their strategy, enhance organisational resilience, motivate their workforce and maximise performance.
WTW helps its clients identify climate-related risks and turn them into opportunities. In particular, its Climate QuantifiedTM data and analytical tools provide cutting-edge measurement of physical, transition and liability risks across a range of financial institutions and markets.
