Structural change and green growth in Colombia

Santiago Barbosa Naranjo, Antoine Godin (), Gustavo Adolfo Hernandez Diaz, Guilherme Riccioppo Magacho, Yehison Mejia Ascanio and Annabelle Moreau Santos
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Santiago Barbosa Naranjo: Universidad del Rosario [Bogota]
Antoine Godin: AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord
Gustavo Adolfo Hernandez Diaz: National University of Colombia
Guilherme Riccioppo Magacho: AFD - Agence française de développement, CEPN - Centre d'Economie de l'Université Paris Nord - Université Sorbonne Paris Nord
Yehison Mejia Ascanio: National University of Colombia
Annabelle Moreau Santos: AFD - Agence française de développement

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Abstract: Based on input-output matrices, the final chapter explores Colombia's structural dynamics in the light of the low-carbon transition. It first examines the openness of the economy and the productive matrix, highlighting how premature deindustrialisation has historically affected the country. The results indicate uneven structural changes between sectors, with significant transformations in the industrial sector under the influence of globalisation and the need to substitute domestic inputs, leading to a weakening of production chains and a reduction in economic complexity. Demand was the driving force behind production growth, hampered by limited technological progress and import substitution. Next, the chapter uses a sectoral perspective to highlight the country's current challenges in reducing GHG emissions, highlighting the fiscal, external, and socio‑economic vulnerabilities affecting its decarbonisation efforts. Results show that Colombia is indeed exposed to transition risks, with almost 20% of the wage bill depending on sunset industries. Furthermore, about 60% of foreign currency revenue and 20% of fiscal revenue come directly from oil and coal, making it vulnerable in both external and fiscal dimensions. Agriculture, agribusiness, and tourism could partly reduce the negative impacts of decarbonisation and help secure economic stability, moving away from dependence on oil and coal.

Keywords: Carbon neutrality; Social inclusion; Colombia; Climate finance; Energy transition; Sustainable development; Climate resilience; Transition énergétique; Inclusion sociale; Financement climatique; Résilience climatique; Développement durable; Neutralité carbone; Colombie (search for similar items in EconPapers)
Date: 2024-09-01
Note: View the original document on HAL open archive server: https://hal.science/hal-05209518v1
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Published in Antoine Godin; Sakir Devrim Yılmaz; Annabelle Moreau Santos. Modelling low-carbon transitions in Colombia: macrofinancial opportunities and risks, Agence française de développement, pp.247-287, 2024, 978-2-37902-015-5

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