Low carbon transition's macroeconomic impacts in Latin America

This paper delves into the complex challenges faced by Latin American countries in transitioning to a low-carbon economy. Using a hybrid multi-regional input- output model, we assess the region's sectoral capabilities in generating foreign exchange, fiscal revenues, employment and wages. Our findings underscore the potential adverse effects of this profound structural change, shedding light on constraints that may emerge, particularly in economies striving to promote structural transformation. The analysis of developing countries’ current exposure and vulnerabilities to the low- carbon transition emphasizes the importance of tailoring effective policies to each unique context. The shift toward a greener economy necessitates significant public investments in green infrastructure, support for emerging industries and technologies, and social protection measures.