World Bank calls for inclusive green growth in region

Latin America has made great strides in green practices, but the future is still in the balance

WASHINGTON—Latin America and the Caribbean’s natural resources, vastly credited with current growth, could be significantly depleted in less than a generation if the region does not fully embrace inclusive green policies that can guarantee sustainable growth, according to a new World Bank report released today at the Woodrow Wilson Center, ahead of the Rio+20 UN Conference on Sustainable Development.

In many respects, Latin America and the Caribbean could turn out to be victims of their own economic success, the report warned. The region’s bonanza in recent years—an average 4% growth and more than 70 million people lifted out of poverty—has led to explosive urbanization, which makes a green future more difficult. More than 80% of the region’s population—more than any other area in the developing world—now lives in urban areas, the study found.

But the region has also served as a global laboratory for some of the most innovative green practices in the world, the report stresses. The region boasts, for example, the lowest carbon-energy matrix of the developing world, accounting for only 6% of global emissions in the power sector.

Latin America has also adopted payment schemes for preserving the environment, which have, for instance, helped turn Costa Rica into a global environmental icon for eco-tourism, after being the worst deforester in the region back in the mid 1990s. Now as Costa Rica bulldozes forward on its river-bank roadway paralleling the Río San Juan, Nicaragua and independent environmentalists argue Costa Rica is showing worrisome signs of reverting back to its old destructive ways.

Indeed, the future of the region’s green commitment is still in the balance.

“Latin American and Caribbean countries are confronted today with decisions that will define their future for years to come,” said Ede Ijjász-Vásquez, World Bank’s Sustainable Development Director for Latin America and the Caribbean. “The region has the opportunity to choose a path that can lead to robust growth without locking it into unsustainable patterns that in the long run can prove to be more expensive, less efficient, and less resilient.”

Some of these choices will define the future of the region for decades to come in key areas such as infrastructure, energy and urban services, which are drivers of economic growth and define the quality of life for most of the people in the region who live in cities. For example, demand for electricity in Latin America and the Caribbean will almost double in the next two decades.

While the region currently has the cleanest energy matrix in the world, the electricity sector’s carbon intensity has been rising due to the increasing share of fossil fuels, a trend that is expected to continue. To address this, the region will have to rely more on other cleaner sources of energy—such as hydro and wind, the study found.

The sustainability of the region’s growth will also depend on its commitment to use its unique natural assets in a sustainable way. The very advantages that the region’s natural endowment provides—rich water resources, fertile land, and unparalleled biodiversity—are under threat from the spread of inefficient land use and deforestation. 

The World Bank report also points out that the region has a real chance to become a leader in adopting a more efficient and climate-smart agricultural practices that do not come at a cost to the environment, and are better prepared for new climate patterns. It will also mean moving towards more efficient and greener forms of transportation of goods, such as railways and waterways, which are currently greatly underused, as well as increasing the number of rural communities that are connected.  

Green growth is not inherently inclusive, Ijjász-Vásquez pointed out. For green policies and investments to endure over time, it will be essential that they benefit all of the region’s people, with a focus on the poor,” he stressed.

There is no single blueprint for inclusive green growth in Latin America, he said. However, many of the answers to the challenge of how to grow in sustainable and inclusive ways lie within the region’s own experiences.  Policies and targeted investments can boost economic growth as well as help realize the aspirations of the growing middle class for a better quality of life, create opportunities for the poorest and most vulnerable segments of society, and protect the region’s environmental assets, the World Bank says.  

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