Advances and Challenges at the 2024 IETA and Asocarbono Latin America Summit

In this column, I would like to analyze and summarize the main conclusions and topics addressed at last week's IETA and Asocarbono Latin America summit held in Cartagena. This event, now in its second edition after its inauguration in October 2021, brought together more than 600 participants, including a significant presence from Asia, the United States, and Europe, as well as government representatives, business leaders, climate change experts, and local and indigenous community representatives. This underscored Latin America's commitment to climate action and the transition to a low-carbon economy.

Commitment to the Paris Agreement and Climate Action

Participants reaffirmed their commitment to the Paris Agreement and the urgency of adopting ambitious measures to reduce greenhouse gas emissions. It was emphasized that carbon markets are essential tools in the fight against climate change. The integration of voluntary and regulated markets under Article 6 of the Paris Agreement was discussed, with an emphasis on establishing carbon pricing that incentivizes emission reductions fairly and effectively.

Challenges in Regulation and Financing

One of the most significant challenges discussed was the need to ensure the integrity and transparency of the markets through proper regulation. Additionally, mechanisms for financing a fair transition to a low-carbon economy were explored, highlighting the importance of an equitable distribution of benefits.

The summit underscored the importance of subnational governments in driving climate action and the need for greater collaboration between levels of government. Andrés Herkrath, Chief Business Solutions Officer at ALLCOT, explained the implementation of the emissions trading system (ETS) in Colombia, known as the "National Tradable Greenhouse Gas Quota Program" (PNCTE). According to Herkrath, this system, similar to the European ETS, allows companies to buy or sell emission rights, depending on whether their emissions are below or above the assigned limit. The system aims to incentivize emission reductions by setting a price per ton of CO2 equivalent and generating funds for the "Fund for Life and Biodiversity."

Latin America's Key Role and Financing Opportunities

Latin America, as a significant region in terms of emissions, plays a fundamental role in the global fight against climate change. The summit highlighted carbon financing opportunities for the region, especially in light of the decarbonization commitments made by G20 countries. Carbon markets provide a crucial platform for channeling funds towards projects that reduce emissions and promote sustainable development, allowing Latin America not only to meet its climate goals but also to benefit economically through the sale of carbon credits.

Participation of Indigenous and Local Communities

The summit reiterated the importance of the participation of indigenous and local communities in the carbon market, ensuring respect for their rights and the fair distribution of the benefits from carbon projects.

Call to Action and Conclusions

The event concluded with an urgent call to action from all stakeholders involved to advance the construction of robust and transparent carbon markets. Juan Sebastián Castellanos, legal director of ALLCOT, highlighted the progress and maturity of the carbon market in the region, reflecting the growing interest and participation of major legal and financial firms at the summit.

The 2024 IETA Latin America Summit has left a legacy of knowledge, commitment, and collaboration, which is expected to serve as a catalyst for effective climate action in Latin America and the Caribbean. The outcomes of the event provide a roadmap for the region's continued progress toward a low-carbon future, demonstrating Latin America's resilience and innovation in climate change matters.