Latin America and the Caribbean Position on Global Energy Leadership

Introduction:

In a groundbreaking special report, the International Energy Agency (IEA) highlights the extraordinary potential of Latin America and the Caribbean to become key players in the global energy sector. With abundant resources and a strong history of clean energy leadership, the region can significantly influence both local energy transitions and global clean energy efforts, according to the first-ever Latin America Energy Outlook.

Current Energy Landscape:

Latin America and the Caribbean already boast one of the cleanest electricity sectors globally, with renewables, primarily led by hydropower, generating 60% of the region's electricity—twice the global average. Countries like Brazil, Mexico, Chile, and Argentina hold some of the world's best wind and solar resources. Additionally, the region is a major exporter of biofuels and possesses approximately 15% of global oil and natural gas resources.

Mineral Resources:

Notably, the region holds a strategic position in the production of critical minerals crucial for clean energy technologies, including around half of global lithium reserves and over a third of copper and silver reserves. The clean electricity supply provides a foundation for sustainable mining and processing of these essential materials.

Policy Gap and Potential:

While 16 out of the 33 countries in the region have committed to reaching net-zero emissions by mid-century, the report identifies a substantial gap in policy implementation. Current policy settings project continued reliance on fossil fuels for energy needs, especially in road transport. However, if countries realize their announced pledges, Latin America and the Caribbean could see renewables meet all new energy demand in this decade.

Key Recommendations:

The IEA's report outlines four crucial actions to reduce energy-related carbon dioxide emissions in the region:

1. Ramp up the adoption of renewable energy.
2. Advance the electrification of industry and transport.
3. Drive energy efficiency to moderate demand growth.
4. Boost access to clean cooking solutions.

Potential Economic Impact:

Achieving the announced pledges could lead to renewables meeting all new energy demand, allowing for increased oil exports, competitive production of low-cost and low-emissions hydrogen, higher biofuel production, and doubled long-term revenues from critical minerals to nearly USD 200 billion.

Investment and Financing:

The report emphasizes the need for substantial investment to meet clean energy pledges. Financing for clean energy projects must double by 2030 and rise fivefold by 2050, reaching USD 150 billion. The focus should be on delivering universal access to modern energy at affordable prices, addressing the 17 million people without electricity and 74 million lacking access to clean cooking supplies in the region.

Methane Emissions and Land Use:

Beyond carbon dioxide emissions, the report highlights the potential to reduce methane emissions from oil and gas operations by nearly 80%, supporting the Global Methane Pledge. Furthermore, emissions from land use and agriculture could be significantly reduced, aligning with the region's commitment to the Glasgow Pledge to stop deforestation by 2030.

Conclusion:

The IEA's Latin America Energy Outlook provides a roadmap for the region to achieve its energy objectives, emphasizing the importance of supportive policies, international cooperation, and increased investment in clean energy projects. As the region's clean energy transitions unfold, Latin America and the Caribbean have the potential to not only shape their own sustainable future but also contribute significantly to the global energy landscape. The IEA stands ready to support regional governments in building a more secure and equitable global energy system.