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At the upcoming Leaders Summit on Climate, to be hosted by President Biden on April 22 & 23, Latin America will have a robust presence with eight regional heads of state in attendance. The Biden Administration brought a climate of change to Washington, and with it a deep understanding of the opportunities and challenges facing the region. We believe that Nationally Determined Contributions (NDCs) are essential and that emerging markets should strive to meet their targets and set even more ambitious goals. And yet, the best outcomes for the Leaders Summit on Climate may simply be to secure constructive and ongoing dialogues leading to the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow. Resource-rich nations in Latin America will play an important role in defining international climate ambitions.
We see opportunities for the region to help shape global sustainability discussions while tackling social and economic issues at home by committing to the following:
- Join the United States as a leading voice in global sustainability at environmental dialogues
- Promote sustainable socio-economic opportunities in the Amazon and region-wide
- Take advantage of the region’s abundant renewable resources to strengthen its green economy
- Address Environmental, Social and Governance issues to attract foreign investment
Currently, there is no greater priority for Latin American countries than containing the global pandemic, restoring normalcy, and undertaking the journey of rebuilding. Response efforts have pushed governments across the region to their limits and exacerbated pre-existing challenges of low economic growth rates, high levels of debt, political polarization, income inequality, and economic informality. U.S. assistance in rebuilding is imperative; first, acquiring a greater supply of vaccines and then providing much needed investment and financing for a green economic recovery and climate focused economic transition.
The U.S. and Latin America have the opportunity to build upon existing dialogues and take leadership roles to advance sustainability metrics and standards globally. With three G20 members in the region (Argentina, Brazil, Mexico) and five within the Western Hemisphere, including Canada and the U.S., governments and the business community have the ability to shape global environmental sustainability criteria and ensure that they are consistent with the region’s unique ecological endowment and specific development strategies. This is a unique opportunity for the region to work with the U.S. and exercise global leadership in critical areas such as agriculture, alternative energy, mining, aviation, and the bioeconomy.
Post-pandemic, Latin American nations have the opportunity to place sustainability and inclusiveness at the core of their growth strategies, building on their resource endowments and defining measurable commitments. Latin America should commit to fostering the green economy by taking advantage of the region’s vast alternative energy resources, enhance the circular economy, incentivize reuse in supply chains, and strengthen a market for recycled materials. As part of the post-pandemic green economic recovery, the region should promote innovation and advance the sustainable use of its resources, including access to enabling technologies, products, and services.
Take the Amazon rainforest, home to nearly 30 million people. It has the ability to convene countries to cooperate on a sustainable development plan supported by governments, promote socio-economically inclusive opportunities, preserve biodiversity, address reforestation, and strengthen national and local institutions. The Inter-American Development Bank recently launched a climate fund to support sustainable development in seven countries that house the rainforest, raising more than $1 billion to strengthen the bioeconomy, sustainable management of agriculture, livestock, and forests, human capital, and sustainable cities and infrastructure. Moreover, the Green Climate Fund (GCF) and the U.S. Development Finance Corporation (DFC) have the potential to become important sources of financing for the region’s climate transition.
The U.S. Chamber of Commerce’s International Policy Coalition for Sustainable Growth and the Brazil-U.S. Business Council, through dialogues and collective thinking with regional governments, international companies, multilateral institutions and global stakeholders, are working to enable regulatory frameworks that will attract sustainable investments, consistent with international standards and obligations of institutional investors. The uncertain regulatory frameworks, practical complexities, and bureaucratic barriers to Environmental, Social and Governance (ESG) investing remain an impediment for institutional investors measuring risks and returns. And yet, much needed foreign direct investment depends on the credibility of national efforts to address the fragile ecosystems from the biodiversity and environmental sustainability perspective. By addressing these critical issues, Latin American nations can increase investor confidence and enhance incentives and opportunities in sustainable economic growth, global trade, green capital investment, and resource efficiency.
The next few months are critical. The U.S. business community stands ready to support Latin America in its climate- focused economic transition. Constructive dialogues within the region, hemisphere, or globally should serve as platforms for achieving and assessing progress towards sustainability goals, providing regular updates on sovereign contributions under the Paris Agreement, promoting the bioeconomy in the Amazon region, and committing to a green future.