Consistency case study: actions supporting Article 2.1c of the Paris Agreement in Colombia

The report finds a nascent process of alignment in Colombia, where progress in green bond issuance and renewable energy auctions is offset by significant continued investment in fossil fuels and high deforestation rates. While the government has established frameworks like the Climate Change Law (2018) and a Carbon Tax, public spending remains heavily skewed toward the energy and mining sectors. Private financial flows are largely inconsistent with climate goals, with carbon-related assets dominating the listed equity market and insurance portfolios. The authors recommend a just transition that redirects fossil fuel subsidies toward renewables and enhances the use of green taxonomies to improve transparency.

• Colombia has set ambitious climate targets, including a goal to reach carbon neutrality by 2050 and an updated 2020 Nationally Determined Contribution (NDC) aiming to reduce greenhouse gas emissions by 51% by 2030.
• Public financial flows show significant inconsistency with climate goals, with the 2019–2022 national budget allocating $32.1 billion (11.15% of the total budget) to the energy and mining sectors, which is considered inconsistent with the Paris Agreement.
• The Colombian government provides substantial subsidies for fossil fuels; since 2014, $33.1 billion has been spent on petroleum subsidies, and $550 million is spent annually on electricity and gas subsidies.
• Deforestation remains a critical driver of emissions, with the deforestation rate increasing by 177% in 79% of Colombian Protected Areas following the 2016 peace agreement, reaching 158,894 hectares in 2019.
• Private financial flows are largely misaligned with climate objectives: 45.4% of the total listed equity market capitalisation comes from carbon-related assets, while only 1.5% is in renewable energy assets.
• The insurance sector's investment portfolio is also heavily weighted toward carbon assets, with $1.34 billion (9%) invested in carbon-related assets compared to $0.10 billion (0.68%) in renewable energy.
• Positive public levers include the 2017 Carbon Tax, which has generated approximately $367 million in cumulative revenue as of July 2020, and renewable energy auctions initiated in 2019 that helped increase non-conventional renewable energy to 1,500 MW.
• The Colombian financial system has seen a rise in green bonds, with $884 million in certified green bond issuances cumulatively from 2016 to 2020.
• The Covid-19 recovery plan for 2020–2022 involves an investment of over $26 billion and includes the acceleration of 27 energy projects, yet it continues to prioritise mining and energy sectors for productivity.

APA

Carbajal, A. L., Squella, X. R., & Watson, C. (2021). Consistency case study: actions supporting Article 2.1c of the Paris Agreement in Colombia. Transforma. https://transforma.global/wp-content/uploads/2025/05/iGST_21c_Case_Study_Colombia.pdf

Chicago

Carbajal, Alejandra Lopez, Ximena Rojas Squella, and Charlene Watson. Consistency case study: actions supporting Article 2.1c of the Paris Agreement in Colombia. Transforma, 2021. https://transforma.global/wp-content/uploads/2025/05/iGST_21c_Case_Study_Colombia.pdf.

Wikipedia

{{cite report |last1=Carbajal |first1=Alejandra Lopez |last2=Squella |first2=Ximena Rojas |last3=Watson |first3=Charlene |title=Consistency case study: actions supporting Article 2.1c of the Paris Agreement in Colombia |publisher=Transforma |date=March 2021 |url=https://transforma.global/wp-content/uploads/2025/05/iGST_21c_Case_Study_Colombia.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbajal2021consistency, author = {Carbajal, Alejandra Lopez and Squella, Ximena Rojas and Watson, Charlene}, title = {{Consistency case study: actions supporting Article 2.1c of the Paris Agreement in Colombia}}, institution = {Transforma}, year = {2021}, month = mar, url = {https://transforma.global/wp-content/uploads/2025/05/iGST_21c_Case_Study_Colombia.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }