• Latin America and the Caribbean have not yet succeeded in decoupling economic growth from resource use. The material intensity of the region’s economy is relatively stable and its energy intensity (energy consumed per unit of output) also appears to be holding steady.


• The development challenge for the region is to reconcile economic growth with the changes in energy patterns needed to decouple growth from greenhouse gas emissions by giving more space to renewable sources, especially in transport, thereby making the production structure and the functioning of cities more efficient.


• It is essential to promote sustainable consumption and production patterns, the construction of sustainable infrastructure, improved access to basic services and the creation of decent jobs that help to reduce the negative environmental impact of businesses, sectors and economies.

• The circular economy is particularly relevant to the region, given the economic weight of the extractive sectors and low recycling rates. It is projected that by 2030 and in net terms, more than one million jobs will have been created in Latin America and the Caribbean against the backdrop of an energy transition and efforts to keep the average global temperature rise well below 2°C above pre-industrial levels.


• In a scenario of the adoption of circular economy principles, job creation in sectors such as the reprocessing of metals and wood would more than offset the losses associated with the extraction of minerals and other raw materials.


• The idea is to generate net welfare gains from economic activities by reducing resource use, degradation and pollution, while increasing quality of life.

Challenges

• The unsustainable extraction of resources leads to negative environmental impacts, the loss of natural heritage and greater risks for the most vulnerable communities.


• The region’s growing material intensity and consistently high levels of carbon and energy intensity, which increase greenhouse emissions and waste, are rooted in its very low-technological production base.


• Achieving environmental sustainability also means increasing the efficiency with which an economy’s resources are extracted and used and reducing the production of waste.

Opportunities

• The increase in the renewable energy supply within the region’s energy matrix proves that it is possible to effect positive changes that enable technological innovation and investment.


• In emerging economies, investments in energy efficiency are concentrated in industry and transport.


• A circular economy improves efficiency and the useful life of materials by promoting durability and the capacity to repair, remanufacture, reuse and recycle goods. Clean production agreements, public-private partnerships to promote new sectors, encouraging corporate social responsibility, ecolabelling, environmental education and access to information are also powerful tools that can be used to achieve SDG 12.

• The Regional Agreement on Access to Information, Public Participation and Justice in Environmental Matters in Latin America and the Caribbean, or the Escazú Agreement, states in article 6, paragraph 10 that each “Party shall ensure that consumers and users have official, relevant and clear information on the environmental qualities of goods and services and their effects on health, favouring sustainable production and consumption patterns”.

• There is a need for a systemic approach and cooperation among actors operating in the supply chain, from producer to final consumer; it is also necessary to raise awareness among consumers through education on sustainable lifestyles, providing them with appropriate information through labels and standards.


• It is important to reduce or eliminate fossil fuel subsidies and other distortions that lead to the inefficient use of resources and prevent the penetration of cleaner technologies and inputs. This type of policy can create more fiscal space and redirect resources to other public policies. Government procurement can also be used to incentivize environmentally sustainable sectors.


• To ensure sustainability, it is essential to modify production and consumption patterns —particularly in relation to energy and land use— and to implement adaptation measures. These measures depend on coherent policies across all areas to enable the transformations necessary to withstand the negative effects of climate change on economic activities, ecosystems and social well-being.

• Reorienting the financing priorities of banks and multilateral organizations, as well as the priorities of inter- and intraregional institutional and political agreements, will be essential.


• Polices must be designed to foster investment in technologies, goods and services linked to a low-carbon development path and productive basis and a smaller material footprint. In order to channel the necessary investments and make them viable, incentives and institutional frameworks must be redefined, to strengthen the guiding role of public investment and improve public-private cooperation.