REPORT: Green or grey growth for Colombia? Challenging fossil-based energy security

REPORT: Green or grey growth for Colombia? Challenging fossil-based energy security

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Author: CDKN Global

Colombia’s extreme vulnerability to climate change, reliance on hydropower for most of its electricity supply, systemic exposure to sudden dips in the price of oil and desire for international recognition make up a series of strong reasons for the state to support green growth. Public opinion is closely attuned to environmental protection issues, as it is across Latin America, where the presence and interrelation of distinct eco-systems has long been understood as one of the region’s great natural assets. But seen from a different perspective, these same issues can be moulded into arguments on behalf of more resource extraction, faster growth and rapid urbanisation.

This report by Clingendael analyses the politics of energy security and green growth in Colombia. The authors point out that Colombia’s recent growth up to the end of the ‘commodity super cycle’ was largely driven by its extraction of oil and coal. Major domestic and multinational business interests are wedded to the extractive economy, and have shown themselves extremely unwilling to forsake such a lucrative business. Representatives and exponents of this model remain at the heart of the state, which, as in other Latin American countries, depended on natural resource revenues over more than a decade of economic boom for social spending and other public largesse. Recent power blackouts were used by some to support the argument that the country needs to reinforce its energy security through fossil sources rather than hydropower.

Taking into consideration legitimate energy security concerns and Colombia’s economic and environmental objectives, the authors of this report make four recommendations that could shape future policy by national authorities, civil society organisations and foreign donors:

  • Links to post-conflict. If a new peace deal between the Colombian government and the FARC succeeds, one concrete and viable recommendation would be for the government to establish explicit links between the financial and tax incentives deriving from the 2014 law on renewable energy production, and the economic stimulus programmes designed for post-conflict territories. The aim would be to encourage take-up of renewable energy in these areas so as to ensure inhabitants have access to a stable electricity supply, to preserve local environments and to offer an energy model to other areas of Colombia.
  • Greening the private sector. Important parts of Colombia’s private sector not only support green growth, but have actively pushed to transform their own production processes. These examples need to be disseminated and replicated across the entire Colombian business community as an operational model that does not harm the revenue-making potential of the companies in question. Targeted tax and subsidy arrangements, as recommended by the OECD in its 2014 review of Colombia, could also encourage greater corporate uptake.
  • The local vanguard. The most outstanding practical applications of green growth in Colombia take place at local level. These include the programmes of certain well-organised local environmental bodies, as well as the activities of a number of major companies, especially in Medellín. A stronger role in transmitting local programming to the centre to inform and shape future policy should be played, as a matter of priority, by central state institutions such as the National Environmental System.
  • Reinvigorating the centre. The Colombian state, however, has faced historical difficulties in achieving genuine institutional cohesion between the centre and the periphery. Environmental policy, despite its good intentions, will not be able on its own to bypass these entrenched dilemmas. But a reconfigured system of cohesive environmental management, with strong vertical and horizontal links, might provide a good example and even a model for more systemic reform of the state.

The authors nevertheless council caution. Certain interest groups and lobbies in the state and in business will continue to seek ways and means to circumvent Colombia’s environmental policy and pledges. Sudden energy, climate and environment-related shocks would pose major questions as to the future trajectory of Colombia’s development. In such a scenario, and with the right support and evidence base, the country could well decide to intensify its pursuit of green growth rather than abandon it.

Photo: Coal mine in Colombia - World Bank Photo Collection 

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