Our region offers unique advantages for Net Zero: clean power grids, renewable technologies, and abundant minerals. Yet at the same time, it faces resource gaps, socio-environmental tensions, and local resistance. Its role will be critical in turning a winding road into a just, sustainable, and resilient transition.
Net Zero was never meant to be a straight path. It’s anchored to energy systems, institutions, and markets that move slowly. This makes the process inherently winding—full of advances and setbacks. But acknowledging this nonlinearity isn’t about giving up; it’s about understanding that this is a structural transition that demands persistence and risk management.
Today, the context is challenging. Decarbonization financing remains expensive and complex for countries in the Global South, and the multilateral agenda is going through a difficult moment—showing that political will alone is not enough. Meanwhile, fossil fuels continue to show troubling resilience: the war in Ukraine exposed major gas dependencies, and new sources like Vaca Muerta’s shale gas have reinforced that inertia.
The result is a dangerous mismatch: climate action needs to speed up, but energy systems (and therefore human activity) remain tied to hydrocarbons.
Abundant Resources, Persistent Barriers
Within this landscape, Latin America offers strategic advantages. The region has one of the cleanest power grids in the world, extraordinary solar and wind potential, and is home to critical minerals like lithium and copper. These strengths coexist, however, with significant constraints: lack of capital slows technologies like green hydrogen and storage; weaker regulatory frameworks hinder investment compared to more technologically autonomous regions; and delays in mechanisms like the EU’s CBAM keep the gap wide between rhetoric and real economic incentives.
Socio-environmental tensions also weigh heavily. NIMBY effects are visible in communities that reject renewable energy projects and enabling infrastructure (e.g., transmission lines) due to their potential local impacts. Paradoxically, these reactions tend to target new technologies rather than long-standing fossil fuel use, revealing the complexity of mobilizing civil society toward a deep transition.
Latin America’s transition isn’t just about energy either. The region offers ecosystems, forests, soils, and regenerative agriculture that capture carbon, cut emissions, safeguard food security, and enhance community resilience. In fact, Latin American and Caribbean forests hold roughly 34% of the world’s forest-based mitigation potential, including strategic carbon sinks like the Amazon, whose carbon stock is equivalent to 15–20 years of global CO₂ emissions.
In Chile, the Long-Term Climate Strategy aims to maintain an annual sink of around 65 MtCO₂e from land use and forestry to stay on track for carbon neutrality by 2050. But doing so requires financing and clear rules that properly value these ecosystem services—resources that are currently scarce. Integrating these natural assets into Net Zero strategies is not a luxury; it’s part of the unique contribution Latin America can make to global climate risk management.
Chile as an Early Laboratory
If adversity can accelerate transition, Chile is proof. The gas crisis with Argentina in the early 2000s forced the country to diversify its energy mix—foreshadowing what Europe would later experience with Russia. That decision enabled Chile to build more resilient infrastructure and support a remarkably rapid renewable expansion.
In the past decade, Chile has retired roughly 1,700 MW of coal-fired power and added more than 19,000 MW of renewable generation and 1,000 MW of storage capacity. Thanks to these advances, the grid’s emission factor fell from 0.36 tons of CO₂ per MWh in 2014 to 0.20 tons in 2024.
Chile shows that it is possible to decisively break dependence on fossil fuels—but also that this transition requires strong institutions and still faces major challenges in other sectors like transport, construction, and agriculture.
Factoring carbon in as a transition risk in markets is essential to channel capital toward clean technologies and reduce the uncertainty that holds back projects in the Global South. It’s also urgent to shed the false dichotomy between decarbonization and energy security: what we’re really dealing with is a technological learning curve that may create temporary perceptions of risk but ultimately strengthens long-term resilience and opens new opportunities. Among these: transport electrification, a key decarbonization lever that can advance alongside power sector transformation; and the development of grid storage systems, where Chile has already met its targets with 2 GW installed and nearly 7 GW under construction.
These debates will be front and center at the La Jolla Energy Conference 2025 in October, where I’ll be participating to continue exploring Latin America’s strategic role in the global energy transition—a transition that we at ImplementaSur are driving by supporting governments and companies in making it just, secure, and competitive. Our work spans regulatory design, SBTi/Net Zero target-setting, and helping large energy consumers understand and optimize energy markets across the LAC region.
