PANAMA

1. Recent trends

Poverty in Panama decreased from 16.8% in 2016 to 15.0% in 2019, lower than the Latin America and the Caribbean (LAC) average for 2020 (26.3%). Extreme poverty decreased in that period from 7.4% to 6.8% and remains below the LAC average (8.7% in 2020). The Gini index decreased from 50.4 in 2016 to 49.8 in 2019, remaining above the LAC average (45.3 in 2019). Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 4.9 tonnes of carbon dioxide equivalent (t CO2e), lower than the averages for LAC (6.3) and countries belonging to the Organisation for Economic Co operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 99.8%, higher than 95.4% for LAC and 61.0% for the OECD. The marine protected area of Panama accounted for 26.8% of its territorial waters in 2021, well above 7.3% for LAC and 18.6% for the OECD. On the fiscal side, environmentally related tax revenue was 0.4% of gross domestic product (GDP) in 2020, below LAC (1.0%) and the OECD (2.1%). Total tax revenue as a percentage of GDP (13.7%) remained lower than the averages for LAC (21.9%) and the OECD (33.5%).

2. Long term development policies for a green transition

Panama is highly vulnerable to extreme weather events caused by climate change. In its National Strategy for Climate Change 2050 (2019), the country presents the vision for its green transition. The Executive Decree No. 100 (2020) regulates the mitigation chapter of the General Environmental Law and provides for the management and monitoring of low carbon economic and social development.

Panama’s mitigation efforts primarily address the energy transition. The National Energy Plan 2015 2050 establishes the goal of a 70% renewable energy mix. The government presented strategic guidelines (2020 2030) that focus on strengthening institutions, the energy sector and the hydrocarbon sector. Panama has developed National Strategies for Electric Mobility (2019), Distributed Generation (2021), Universal Energy Access (2022), Innovation for the National Interconnected System (2022), and the Rational and Efficient Use of Energy (2022). Additional priorities are set through an action plan for solar thermal energy (2021), a regulation on sustainable buildings (2019), the Panama Cooling Plan (2020), and the introduction of the Green Hydrogen Roadmap (2022). The Reduce Tu Huella Corporativa programme promotes voluntary private sector engagement by offering a standardised process to quantify of corporate carbon and water footprints. Panama has also launched a National Forest Restoration Programme 2021 25. Regarding adaptation, Panama recently launched a coastal adaptation project for gender based planning instruments with the World Bank PROBLUE Fund (2022) and is preparing a nature based adaptation project in Bocas del Toro and Limon, with support from the Adaptation Fund and the United Nations Environment Programme (UNEP). For monitoring purposes, Panama implemented a project to measure its adaptation progress, with support from the Adaptation Fund, and a platform (SIRED) that focuses on the losses and damages caused by climate change, with support from the World Bank. A National Climate Transparency Platform gathers all the information on Panama’s climate actions.

In its international partnerships, within LAC, Panama is strengthening the adaptive capacity of coastal communities, in co operation with Cuba, the Food and Agricultural Organization (FAO) and the Adaptation Fund, and promotes climate resilient water management, with support from the Colombian Fundación Natura Beyond LAC, Panama fosters sustainable land management and restoration, supported by the FAO and the Global Environment Facility (GEF). To increase urban resilience, Panama is part of the Nature4Cities Latam project, co ordinated by UNEP and the Green Climate Fund (GCF). To incorporate gender considerations in green transition policies, Panama established a National Gender and Climate Change Plan in collaboration with the United Nations Development Programme (UNDP).

Regarding green finance Panama adopted a manual for labelling public spending projects according to climate change criteria in 2022. Panama’s national stock exchange issued guidelines on sustainable investment. Panama is also in the process of structuring an exchange system for carbon credits and developing a national REDD+ (Reducing Emissions from Deforestation and Forest Degradation) strategy. Panama is part of the Working Group on Sustainable Finance Taxonomies in LAC to develop a common framework of sustainable finance taxonomies for the region.

Note: See the Reader’s Guide for definitions and sources.

Key indicators – Panama

Paraguay

1. Recent trends

Poverty in Paraguay decreased from 24.0% in 2016 to 22.3% in 2020 and remained below the Latin American and the Caribbean (LAC) average of 26.3%. These figures mask the effect of strong efforts to decrease poverty before the shock of the COVID 19 pandemic, which brought the figure down to 19.4% in 2019. Extreme poverty consistently decreased in that period, from 7.9% to 6.0%, below the LAC average (8.7%). The population living in completely informal households decreased from 66.4% in 2009 to 58.0% in 2018 higher than the LAC average of 36.3%. Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 7.0 tonnes of carbon dioxide equivalent (t CO2e), higher than the average for LAC (6.3) but below the average for countries belonging to the Organisation for Economic Co operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/ m3) was 100%, higher than 95.4% for LAC and 61.0% for the OECD. On the fiscal side, environmentally related tax revenue was 0.9% of gross domestic product (GDP) in 2020, below LAC average (1.0%) and the OECD average (2.1%). Total tax revenue as a percentage of GDP in 2020 (13.4%) remained considerably lower than the averages for LAC (21.9%) and the OECD (33.5%).

2. Long term development policies for a green transition

Paraguay depends economically on climatic conditions for income generation through agriculture, energy, and transport. The mitigation and adaptation efforts were made a national priority in 2011 through the National Climate Change Policy. Paraguay’s National Development Plan 2014 2030 includes strategic objectives, such as the development of sustainable habitats, appreciation and protection of environmental capital, and promotion of productive diversification.

To achieve its mitigation goals, Paraguay adopted a National Plan in 2017, including programmes for integrated transport sector management, clean cooking, replacement of liquefied petroleum (LGP) gas cookers, sustainable use of forests in the Chaco region, forest landscape restoration, waste management and sustainable architecture. A national electro mobility strategy has been developed and the government is examining the potential to produce green hydrogen. Regarding adaptation policies, the National Adaptation Plan 2022 2030 was developed through a participatory process. It contains 25 objectives for resilient cities and communities, health and epidemiology, ecosystems and biodiversity, energy, agriculture and food security, forestry, water resources, and transport. As an example, the resilience of communities is fostered through the ecosystem based adaptation AbE Chaco project, which aims to reduce the region’s vulnerability to the impacts of climate change on food security.

In its international partnerships within LAC, Paraguay is engaged in a regional initiative to advance e mobility, with support from the United Nations Environment Programme (UNEP) and the Green Climate Fund (GCF). For the post COVID 19 reactivation of sustainable tourism, the country is exchanging information with Costa Rica and Ecuador. Beyond the region, Paraguay is strengthening evidence based actions and promoting private sector involvement, with assistance from the Nationally Determined Contributions (NDC) Support Programme of the United Nations Development Programme (UNDP). Additional focal points of collaboration are sustainable agriculture and rural development (the Samaeul Undong project, with support from the Korea International Cooperation Agency), responsible agricultural production and consumption (in collaboration with the World Wildlife Fund [WWF]) and the strengthening of territorial governance capacities (with the Spanish Agency for International Development Cooperation [AECID]). Paraguay also supports plantation and reforestation efforts performed by 17 000 vulnerable families with the PROEZA project (2017), in collaboration with the GCF and the Food and Agriculture Organization (FAO).

In the area of green finance, Paraguay created the Mesa de Finanzas Sostenibles, a national platform for voluntary collaborations among financial actors to develop environmental and social risk analysis systems and guidelines for sustainable financing of agricultural, livestock and agro industrial activities. Paraguay also reviews environmental policies and fiscal incentives to stimulate the financing of sustainable agriculture, in collaboration with the United Nations’ Good Growth Partnership initiative. Paraguay is also engaged in the voluntary REDD+ (Reducing Emissions from Deforestation and Forest Degradation) process to access results based payments for sustainable forest management. To date, it has received payments from the GCF for emissions reduction of 23 Mt CO2e achieved in 2015 17.

Note: See the Reader’s Guide for definitions and sources.

Key indicators – Paraguay

12 https://stat.link/90se86

Peru

1. Recent trends

Poverty in Peru increased in recent years, from 19.1% in 2016 to 28.4% in 2020, partly owing to the impact of the COVID 19 pandemic. As a result, it is now above the Latin America and the Caribbean (LAC) average of 26.3%. Extreme poverty also increased in that period from 5.2% to 8.6% and was on par with the LAC average (8.7%). The population living in completely informal households decreased from 67.9% in 2010 to 51.6% in 2018 but remained well above the LAC average of 36.3% in 2018. Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 3.1 tonnes of carbon dioxide equivalent (t CO2e), lower than the averages for LAC (6.3) and for countries belonging to the Organisation for Economic Co operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 98.4%, higher than 95.4% for LAC and 61.0% for the OECD. The marine protected area of Peru accounted for just 0.5% of its territorial waters in 2021, lower than averages for LAC (7.3%) and the OECD (18.6%). In June 2021, the government signed a decree that establishes the protected marine area of the Nazca Ridge National Reserve to 62 392 km 2, thereby increasing the national marine protected area to almost 8% of territorial waters. On the fiscal side, environmentally related tax revenue was 0.5% of gross domestic product (GDP) in 2020, below LAC (1.0%) and the OECD (2.1%). Total tax revenues as a percentage of GDP in 2020 (15.2%) remained lower than the averages for LAC (21.9%) and the OECD (33.5%).

2. Long term development policies for a green transition

Peru’s National Strategy on Climate Change to 2050, recently updated, defines action on climate change in an integrated, cross cutting and multi sectoral manner. The National Environmental Policy 2030 aims to decrease the vulnerability of ecosystems, preserve biodiversity, contribute to the sustainable management of nature, and achieve a 64% renewable energy matrix by 2030. The National Plan of Competitiveness and Productivity 2019 2030 promotes sustainable economic growth and international trade, prioritising environmental sustainability.

Within Peru’s mitigation efforts, the Ministry of Environment (MINAM) is executing the Construyendo bienestar humano y resiliencia en bosques amazónicos project (2019), financed by the Global Environment Facility (GEF), to preserve Amazon ecosystems. The MINAM is also leading a project with the NAMA (Nationally Appropriate Mitigation Actions) Facility for management of organic wastes. The Mejora de la sostenibilidad en la movilidad eléctrica para el transporte urbano project aims to enhance electric transport initiatives to reduce pollutants and improve air quality. Regarding Peru’s adaptation measures, a National Adaptation Plan has been adopted in 2021.

Regarding international partnerships, within the region, Brazil, Colombia, Ecuador and Peru are collaborating on the integrated management of the Putumayo Ica river basin, with the World Bank as implementer. The Pacific Alliance leads a project to promote the circular economy and sustainable management of plastics in Chile, Colombia, Mexico and Peru. The AICCA Peru (Adapting irrigation to climate change) project, in partnership with Bolivia, Colombia and Ecuador, aims to strengthen adaptation measures in irrigation system projects. Beyond LAC, Peru has various projects with the GEF to preserve the Amazon including: Sustainable Productive Landscapes in the Peruvian Amazon; Securing the Future of Peru’s Natural Protected Areas; Sustainable Industrial Zone Development in Peru; and Deforestation Free Commodity Supply Chains in the Peruvian Amazon. As a member of the Climate and Clean Air Coalition, Peru received technical assistance to scale up municipal projects in solid wastes. In 2022, the Amazon Cooperation Treaty Organization began creating a regional platform for indigenous people in the Amazon as part of Pacto de Leticia por la Amazonía, implemented with support from EUROCLIMA+.

Concerning green finance, the Green Finance Roadmap incorporates environmental guidelines in the management of the financial system, insurance sector and the stock market to increase access to green funds. Iniciativa Patrimonio Natural del Peru uses a financial model that grants resources to projects that meet environmental and social criteria for the conservation of protected natural areas. The Development Bank of Peru issued green bonds to finance renewable energies. Peru has two public private initiatives to promote sustainable construction: Bono Buen Pagador Sostenible, a bonus granted by the government to reduce the mortgage loan of households considered eco friendly; and Bono Sostenible, granted to residential projects with the sustainable household certificate issued by the Ministry of Housing.

Note: See the Reader’s Guide for definitions and sources.

Key indicators – Peru

12 https://stat.link/3os2fx

Uruguay

1. Recent trends

Poverty in Uruguay increased from 3.6% in 2016 to 5.2% in 2020, partly owing to the impact of the COVID 19 pandemic, but remains substantially lower than the Latin America and the Caribbean (LAC) average of 26.3%. Extreme poverty increased in that period from 0.2% to 0.3%, also far below the LAC average (8.7%). The population living in completely informal households decreased by almost half – from 28.5% in 2008 to 16.3% in 2018 – bringing it far below the LAC average of 36.3% in 2018. Regarding environmental indicators, in 2019, greenhouse gas (GHG) emissions per capita were 10.4 tonnes of carbon dioxide equivalent (t CO2e), higher than the averages for LAC (6.3) and countries belonging to the Organisation for Economic Co operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 26.5%, substantially lower than 95.4% for LAC and 61.0% for the OECD. The marine protected area of Uruguay accounted for 0.75% of its territorial waters in 2021, far below 7.3% for LAC and 18.6% for the OECD. On the fiscal side, environmentally related tax revenue was 1.8% of gross domestic product (GDP) in 2020, above LAC (1.0%) but slightly below the OECD (2.1%). Total tax revenues as a percentage of GDP in 2020 (26.6%) remained higher than the average for LAC (21.9%) but below the OECD (33.5%).

2. Long term development policies for a green transition

At the institutional level, the Ministry of Environment was created in 2020 as the first state secretariat to deal exclusively with environmental and institutional concerns. The National Climate Change Plan (2017) and the Long Term Climate Strategy (2021) lay the foundations of the national environmental policy.

With respect to its mitigation measures, Uruguay places a specific focus on the energy, agricultural, transport and industrial sectors. In transport, Uruguay relies on legal incentives, for example by subsidising investments in electric public transport buses (Budget Law No. 19.670), promoting investments in electric mobility (Decree 268/020), and reducing taxes for hybrids and electric vehicles (Decree 321/021). In the agricultural sector, Uruguay aims to reduce emissions through productivity gains thanks to investments and the adoption of new technologies. In terms of energy production, Uruguay has managed to generate over 98% of its electricity from renewable sources (mainly hydropower, wind, solar, biofuels and biomass) and has launched a Green Hydrogen Roadmap in 2022. Among its adaptation policies, Uruguay has developed three national adaptation plans (NAPs) focused on agriculture (2019), cities and infrastructure (2021), and coastal adaptation (2021). For the protection against negative impacts of climate change, Uruguay established a National Emergency System (SINAE) for integrated disaster risk management.

In its international partnerships within LAC, Uruguay attaches particular importance to the transport sector. It developed the VERNE project in 2020, in partnership with the Inter American Development Bank (IDB), to support creation of a hydrogen ecosystem to decarbonise the transport sector. In collaboration with the United Nations Development Programme (UNDP), Uruguay has created a sustainable and efficient urban mobility system (Movés). The country among other regional partnerships also launched a joint programme with Honduras in capacity building for electric mobility. Beyond LAC, Uruguay closely collaborates with the European Union (EU) through the EUROCLIMA+ programme which runs 15 mitigation and adaptation projects in the country, the EU AL INVEST Verde programme which promotes the green transition, and a bilateral association that strengthens strategic dialogue. Lastly, the Partnership for Action on Green Economy, led by five United Nations agencies, supports Uruguay’s efforts to incorporate the green economy in public policies of key economic sectors.

Regarding green finance, Uruguay’s central bank joined the Network for the Greening of Financial Systems. The Economy and Finance Ministry joined the Coalition of Finance Ministers for Climate Action and adopted the Helsinki Principles for climate action. Uruguay is a member of the United Nations Joint Sustainable Development Goal Fund and is the only LAC country selected to receive funding from it for its decarbonisation efforts and energy sector transition. The programme will establish a Renewable Energy Innovation Fund to support Uruguay’s second energy transition. Uruguay is also planning to issue an innovative sovereign bond that will tie its interest rate to environmental goals.

Note: See the Reader’s Guide for definitions and sources.

Key indicators – Uruguay

12 https://stat.link/5wevlx