Latin America is leading the way in producing sustainable electricity. More than half of electricity generation is produced from renewable sources. It is the largest of all regions and almost half as large as Europe (Figure). But Latin America must also work hard to meet the goals of the Paris climate agreement of December 2015.
The Paris target is to limit global warming to less than 2 degrees Celsius, preferably 1.5 degrees Celsius compared to pre-industrial levels. According to the United Nations Climate Panel, this requires net zero emissions by 2050, which requires the share of renewables in electricity generation to increase to 90 percent by 2050, according to the International Energy Agency (IEA).
After a seven percentage point increase between 2015 and 2020, the ninety percent required by 2050 may seem achievable for Latin America. For example, Costa Rica and Paraguay now produce almost all their electricity sustainably. Among the six largest countries, Brazil (84 percent) and Peru (64 percent) perform above average.
However, the region cannot rest on its laurels. For example, Argentina (29 percent) and Mexico (20 percent) – the other two largest countries – lag significantly behind. It is worrisome that the present rulers are not clear on the policy of reaching ninety percent by 2050 and consequently missed the target.
Another problem is that Latin American hydropower generation – the main source of electricity – can only be expanded to a limited extent. Also, this production is vulnerable to climate change. To meet climate goals, the region needs to diversify sources of sustainable energy production. The good news is that the region is successfully investing in wind and solar energy: the IEA predicts almost a third of renewable energy in five years. But more is needed to achieve the climate goal. Energy used for heat and transportation still comes mainly from fossil sources. As a result, renewable energy accounted for only a quarter of Latin America’s total energy consumption in 2015 (latest available data). So this is an important task for the region.
