According to the Earth Day 2020 survey conducted by Ipsos Global Advisor, one in ten people believe that climate change is as serious as the crisis of COVID-19 and believe that their government will fail them if they do not take immediate action to tackle climate change. According to this survey, 65% of the public globally support a "green" recovery from the crisis.

Aware of the importance of this issue, the foreign ministers of the European Union (EU) and Latin America and the Caribbean (LAC) acknowledged, in Berlin in December 2020, that "economic recovery from the socio-economic damage caused by the pandemic cannot be sustainable without addressing the global challenges of climate change and biodiversity loss and moving towards a circular economy". Ministers also emphasised that by joining forces in strong green partnerships, the two regions can ensure a better common future for their citizens.

The EU and LAC regions can and should forge a close partnership and capitalise on favourable conditions to meet this challenge and defend their objectives in the global sphere. Together, these two regions represent one-third of the 196 parties to the Paris Agreement and are responsible for approximately 20% of greenhouse gas emissions. It will be in their interest to strategically coordinate their positions to achieve more ambitious outcomes at COP26 in November 2021.

The time is now, as the August 2021 IPCC's report warns us. We have a brief window of opportunity that must be seized for both regions to recover from the crisis caused by the pandemic, tackling the climate crisis at the same time. It is a unique occasion to rethink our economies and societies so that they are more resilient to global impacts, more sustainable and leave no one behind. Economic recovery must promote sustainable development, aim for carbon neutrality in the second half of this century and deliver on international commitments.

Here are 5 opportunities to promote a greener EU-LAC partnership.

1. Partnership and trade agreements

The EU has agreements with 31 of the 33 countries that make up the Community of Latin American and Caribbean States (CELAC), which makes LAC the region that has developed the most institutionalised links with the EU. This rich network of agreements offers opportunities to attract investment and stimulate economic recovery and energise and support the necessary climate action.

The project "Challenges for the EU-LAC Association Agreements Network" investigates how these agreements can facilitate new models of post-pandemic development, through productive transformation and regulatory convergence in favour of ecological transition.

Trade and sustainable development provisions are an important part of the EU-Chile and EU-Mexico agreements which are in the process of modernisation. For the EU-Mercosur agreement, established in 2019, the inclusion of an additional protocol including binding obligations in relation to the Paris Agreement is under discussion. In the post-Cotonou Agreement of April 2021, there is a clear commitment that the CARIFORUM-EU EPA will implement the Sustainable Development Goals. Even in the case of older agreements, such as the EU's agreements with Colombia/Ecuador/Peru and Central America, there is much room for improving joint climate action.

2. Financing and green investment

The involvement of the economic and financial sector, in both the public and private spheres, is key to the fulfilment of the green transition, and a major challenge, especially for LAC countries, as it is the most indebted region in the world, with 79% of its GDP. These debt levels reduce fiscal space and compromise the recovery and investments needed for the green transition. Moreover, Official Development Assistance flows, which represent 0.22% of the region's GDP, are relatively insignificant.

In the Multiannual Financial Framework (MFF) 2021-2027, the European Commission created the Neighbourhood, Development and International Cooperation Instrument (NDICI) - Global Europe. With an allocation of €3.39 billion for LAC, this instrument offers more flexibility and transparency while addressing global challenges and the shared roadmap around the SDGs and the Paris Agreement. Through the European Fund for Sustainable Development (EFSD+) and “Next Generation EU” resources, it will be able to provide financial instruments, budget guarantees, blended finance, financial assistance and debt reduction programmes. Guarantees will be key to cover associated risks in other instruments.

Green bonds have become an innovative way to finance environment-related projects. Globally, the green bond market has reached a record issuance value of USD 1.1 trillion by 2020. LAC represents only 2% of this market, which shows strong growth potential. In December 2020, the European Commission launched LAGREEN, its first €450 million green bond fund for Latin America, led by the German government and implemented by KfW Bank, with the support of the Latin America Investment Facility (LAIF). It aims to finance climate and natural resource-friendly investments and mobilise local and international private capital towards the issuance of more green bonds in the region.

Bi-regional dialogues, such as those held in the framework of the "Development in Transition" and the "2nd Climate and Sustainable Finance Week in Latin America and the Caribbean" are essential to identify good practices, progress and opportunities for financial mobilisation and management for an effective response to climate change.

3. Knowledge sharing

As well as financial resources, knowledge transfer is essential for the implementation of policies, programmes and projects that contribute to the reduction of CO2 emissions, as highlighted at the recent 12th EU-LAC Reflection Forum.

Under the concept of a circular economy, European experiences can be adapted to the LAC context where governments, the private sector and international organisations, among other actors, should share knowledge and best practices, and carry out joint projects.

It is worth noting the ongoing cooperation in the framework of the EU Space Programme (Copernicus, Galileo and EGNOS) to address environmental challenges. The EU's flagship programme to support climate change mitigation and adaptation in Latin America, EUROCLIMA+, has achieved important results and, since 2020, is applying a new approach of country dialogues to identify, prioritise and channel their demands. Other initiatives, such as the new €33 million AL-INVEST Verde programme, aim to promote sustainable growth and job creation by supporting LAC SMEs in their transition towards a lower carbon, resource-efficient and more circular economy.

4. Civil society involvement

2021 is a "super year" for international environmental policy, with major debates underway on climate, biodiversity, food and oceans. It is essential that civil society is involved and engaged more effectively so that they are part of the solution.

The green transition must involve all sectors of government, the private sector, productive forces and society in a cross-cutting, integrated and coordinated manner. The green transition must be carried out with the citizen and the community at the core, and with an inclusive and gendered approach, helping non-green sectors in their transformation or adaptation, so as not to generate greater socio-economic inequality, nor leave anyone behind.

 In this regard, the two regions should continue to promote close engagement with civil society, think tanks, local governments, the business and workers, cultural organisations, academics and youth, as highlighted by several of these actors in the EU-LAC Foundation Newsletter.

5. Strengthening multilateralism

In their agreements, EU and LAC countries coincide that multilateralism is the best approach to transnational challenges such as green recovery and the fight against climate change, whether at the regional, bi-regional or global level. It is unfortunate, however, that interest in the climate change agenda is growing as the attractiveness and vitality of multilateralism wanes. But this can also be an opportunity.

Institutions deteriorate when they lack purpose, and addressing climate change could give new meaning to the multilateral system because climate already permeates international organisations: The WTO engages in disputes over low-carbon energy technologies; the UN Security Council and other organisations respond to conflicts exacerbated by climate change; UNHCR assists climate migrants; WHO works on the links between climate change and public health. International financial institutions such as the IMF and multilateral development banks make decisions based on climate change as an assessment tool.

Strengthened and effective multilateral cooperation is not an option, but a necessity for a more equal, resilient and sustainable world. Multilateralism must be at the heart of the EU-LAC partnership with the aim of transforming it into a more efficient, transparent, democratic, accountable and representative tool. Both regions can seize the current moment conditioned by climate change to revive multilateralism and make its solution a central purpose of the global system.

If we really want to recover in a way that responds to the crises of COVID-19 and climate change, we need to join forces. The stakes are high, and as the examples above demonstrate, the EU-LAC green partnership is possible and necessary. The intensification of high-level bi-regional political dialogue, culminating in a possible bi-regional summit, would be a decisive signal to put the world on a better path.

*This text expresses the personal views of the author and does not commit the institution.

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