Colombia is facing a clash between new government policies that will tackle climate change and the reality of its coal and oil reliant economy.
Official figures, for example, show that the nation’s oil production averaged 773,789 barrels per day (bpd) in May, an increase of 3.59% compared to the same month a year prior.
Gustavo Petro, Colombia’s first leftist president, was inaugurated last August with a focus to decarbonize the country’s economy.
Petro’s pledge comes as part of a push to rid the country of fossil fuels to achieve its Paris Agreement goals, which includes reducing Colombia’s greenhouse gas emissions by 51% by 2030.
He has also appointed electrical engineer, Andres Camacho, as the country’s new minister of mines and energy, following the resignation of Irene Velez last week.
Camacho studied renewable energy in school and is known for having a strong leftist ideology; he aims to head Colombia’s transition away from fossil fuels, advancing Petro’s climate aims.
The minister will work alongside Susana Muhamad, Colombia’s environmental minister, who publicized a draft decree in July, that will restrict mining in areas that are considered environmentally vulnerable.
According to a representative from Transforma, a think tank for climate action, Colombia has a good chance to advance its climate policy so that change can happen and be consolidated in the next 15 to 20 years.
However, six months into the Liberal presidency, there is compounding concern amongst analysts about what will replace Colombia’s coal and oil revenue.
These fossil fuels remain Colombia’s two main sources of revenue via exports, royalties, and tax collection. There are currently around 200 hydrocarbon exploration contracts over an area of approximately 17Mha, where oil and gas have traditionally been discovered. Further, coal and oil account for eight per cent of gross domestic product (GDP) in the South American country, government data shows.
Finance minister, Ricardo Bonilla, argued that the products that could contribute to the energy transition and that are currently available do not build a complete offer, “Today, they [coal and oil] are the most important income for the Colombian state, and we are not going to replace it in eight days or in a year, nor in five years.”
President Petro has claimed that the agriculture and tourism industries could account for the loss of oil and coal mining income in the short-term. Yet, economists reiterate that this would be an enormous task to feasibly achieve.
The Colombia Mining Association (ACM) reported that the country would have to expand its agricultural sector six-fold to match the economic contribution of mining, while tourism accounts for less than four per cent of Colombian GDP.
Professor Maria Cecilia Roa of Colombia’s Los Andes University, argued that the focus of the energy shift should be how it can be financed on a global scale, rather than what will replace capital from coal and oil.
“The energy transition goes far beyond saying Colombia won’t exploit its oil reserves,” Roa stated. “The energy transition is not about what one country does, it’s a massive global challenge to the global climate crisis.”
Some low emitting CO2 countries, including Colombia, believe they should not bear the brunt of the responsibility of paying for the energy transition. Rather, responsibility should fall on the biggest polluters — China, the US, and India.
