IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05208165.html
   My bibliography  Save this paper

Understanding the macroeconomic and financial vulnerabilities associated with the global low-carbon transition for Colombia

Author

Listed:
  • Antoine Godin

    (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord)

  • Sakir Devrim Yilmaz

    (AFD - Agence française de développement)

  • Jhan Andrade Portela

    (National University of Colombia)

  • Diego Alejandro Guevara

Abstract

Based on the analysis of three scenarios of oil and coal exports over the period 2023–2050, this chapter highlights the greater macroeconomic and financial fragility that the global low-carbon transition (and subsequent decline in demand for fossil fuels) may entail for the Colombian economy. The decline in fossil fuel exports will deeply affect Colombia's real and external sectors and deteriorate its fiscal and financial conditions. Ensuring a constant stream of international flows can help mitigate the negative impacts of the global transition in the long term. Still, the main driver of a recovery lies in industrial policy. Colombia will need to reduce its import dependency and diversify its exports (increasing the export base with sophisticated and higher value-added goods and services)—which will require coordinated actions between industry, finance, and the government. Implementing these policies early is a priority, since such structural transformations take time to materialise.

Suggested Citation

  • Antoine Godin & Sakir Devrim Yilmaz & Jhan Andrade Portela & Diego Alejandro Guevara, 2024. "Understanding the macroeconomic and financial vulnerabilities associated with the global low-carbon transition for Colombia," Post-Print hal-05208165, HAL.
    • Handle: RePEc:hal:journl:hal-05208165
    Note: View the original document on HAL open archive server: https://hal.science/hal-05208165v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05208165v1/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    2. Cahen-Fourot, Louison & Campiglio, Emanuele & Godin, Antoine & Kemp-Benedict, Eric & Trsek, Stefan, 2021. "Capital stranding cascades: The impact of decarbonisation on productive asset utilisation," Energy Economics, Elsevier, vol. 103(C).
    3. Alberto Botta & Antoine Godin & Marco Missaglia, 2016. "Finance, foreign (direct) investment and dutch disease: the case of Colombia," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 265-289, August.
    4. Ximena del Carpio & José A. Cuesta & Maurice D. Kugler & Gustavo Hernández & Gabriel Piraquive, 2022. "What Effects Could Global Value Chain and Digital Infrastructure Development Policies Have on Poverty and Inequality after COVID-19?," JRFM, MDPI, vol. 15(2), pages 1-29, January.
    5. Frederick van der Ploeg & Armon Rezai, 2020. "Stranded Assets in the Transition to a Carbon-Free Economy," Annual Review of Resource Economics, Annual Reviews, vol. 12(1), pages 281-298, October.
    6. Antoine GODIN & Sakir-Devrim YILMAZ, 2020. "Modelling Small Open Developing Economies in a Financialized World: A Stock-Flow Consistent Prototype Growth Model," Working Paper 5eb7e0e8-560f-4ce6-91a5-5, Agence française de développement.
    7. Mealy, Penny & Teytelboym, Alexander, 2022. "Economic complexity and the green economy," Research Policy, Elsevier, vol. 51(8).
    8. Abeles, Martín & Pérez Caldentey, Esteban, 2022. "Una macroeconomía para el desarrollo. Esbozo de un modelo de crecimiento, inversión y distribución del ingreso," El Trimestre Económico, Fondo de Cultura Económica, vol. 89(353), pages 111-149, enero-mar.
    9. Magacho, Guilherme & Espagne, Etienne & Godin, Antoine & Mantes, Achilleas & Yilmaz, Devrim, 2023. "Macroeconomic exposure of developing economies to low-carbon transition," World Development, Elsevier, vol. 167(C).
    10. Louis Daumas, 2023. "Financial stability, stranded assets and the low‐carbon transition – A critical review of the theoretical and applied literatures," Post-Print hal-04505797, HAL.
    11. Mateo Hoyos López, 2017. "Trade liberalization and premature deindustrialization in Colombia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-30, December.
    12. Esteban Pérez Caldentey & Matías Vernengo, 2021. "Financialization, premature deindustrialization, and instability in Latin America," Review of Keynesian Economics, Edward Elgar Publishing, vol. 9(4), pages 493–511-4, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leonardo Rojas Rodriguez & Álvaro Martín Moreno Rivas, 2024. "Vulnerabilities, constraints, and opportunities of energy transition in Colombia: a structuralist approach," Post-Print hal-05163818, HAL.
    2. Valdecantos, Sebastian, 2025. "The green transition dilemma: The impossible (?) quest for prosperity of South American economies," Ecological Economics, Elsevier, vol. 230(C).
    3. Antoine GODIN & Devrim YILMAZ & Jhan ANDRADE & Santiago BARBOSA & Diego GUEVARA & Gustavo HERNANDEZ & Leonardo ROJAS, 2023. "Can Colombia cope with a Global Low Carbon transition?," Working Paper 433ec0f8-625e-434c-bf44-3, Agence française de développement.
    4. Monasterolo,Irene & Mandel,Antoine & Battiston,Stefano & Mazzocchetti,Andrea & Oppermann,Klaus & Coony,Jonathan D'Entremont & Stretton,Stephen John & Stewart,Fiona Elizabeth & Dunz,Nepomuk Max Ferdina, 2022. "The Role of Green Financial Sector Initiatives in the Low-Carbon Transition : A Theoryof Change," Policy Research Working Paper Series 10181, The World Bank.
    5. Irene Monasterolo, 2020. "Embedding Finance in the Macroeconomics of Climate Change: Research Challenges and Opportunities Ahead," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 21(04), pages 25-32, November.
    6. Magacho, Guilherme & Spinola, Danilo, 2025. "Integrating Ecological, Productive, and Macrofinancial Spheres with ESTEEM: A System Dynamics Framework to Assess Brazil’s Transformation Plan," CAFE Working Papers 38, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    7. Hadji-Lazaro, Paul, 2025. "Environmental responsibility and exposure of finance: Combining environmentally-extended input-output and balance sheet approaches," Ecological Economics, Elsevier, vol. 228(C).
    8. Antoine GODIN & Paul Hadji-Lazaro, 2020. "Demand-induced transition risks: A systemic approach applied to South Africa," Working Paper 1ec2dacf-58b9-4235-8d35-4, Agence française de développement.
    9. Baer, Moritz & Campiglio, Emanuele & Deyris, Jérôme, 2021. "It takes two to dance: Institutional dynamics and climate-related financial policies," Ecological Economics, Elsevier, vol. 190(C).
    10. Lorenzo Nalin & Giuliano Toshiro Yajima, 2021. "Commodities fluctuations, cross border flows and financial innovation: A stock‐flow analysis," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 539-579, July.
    11. Campiglio, Emanuele & Dietz, Simon & Venmans, Frank, 2022. "Optimal climate policy as if the transition matters," LSE Research Online Documents on Economics 117609, London School of Economics and Political Science, LSE Library.
    12. Bibi, Samuele, 2024. "Oil revenues, FDI and balance of payment dynamics: The case of Kazakhstan between the supercycle commodity boom and financial subordination," Resources Policy, Elsevier, vol. 90(C).
    13. Esteban Ramon Perez Caldentey & Lorenzo Nalin & Leonardo Rojas, 2022. "A baseline stock-flow model for the analysis of macroprudential regulation for Latin America and the Caribbean," Working Papers PKWP2217, Post Keynesian Economics Society (PKES).
    14. Julien CALAS & Antoine GODIN & Paul Hadji-Lazaro & Pamela SEKESE & Andrew SKOWNO, 2023. "Socioeconomic and spatially-explicit assessment of Nature-related risks: the case of South Africa," Working Paper 199e7bd0-7dfd-4a54-bc1d-9, Agence française de développement.
    15. Ghosh, Saibal, 2023. "Does climate legislation matter for bank lending? Evidence from MENA countries," Ecological Economics, Elsevier, vol. 212(C).
    16. Louis Daumas, 2024. "Financial stability, stranded assets and the low‐carbon transition – A critical review of the theoretical and applied literatures," Journal of Economic Surveys, Wiley Blackwell, vol. 38(3), pages 601-716, July.
    17. Santiago Barbosa Naranjo & Antoine Godin & Gustavo Adolfo Hernandez Diaz & Guilherme Riccioppo Magacho & Yehison Mejia Ascanio & Annabelle Moreau Santos, 2024. "Structural change and green growth in Colombia," Post-Print hal-05209518, HAL.
    18. Gourdel, Régis & Monasterolo, Irene & Gallagher, Kevin, 2025. "Climate transition spillovers and sovereign risk: Evidence from Indonesia," Energy Economics, Elsevier, vol. 143(C).
    19. Luca TAUSCH & Guilherme MAGACHO, 2024. "Challenges in the Transition to a Low-Carbon Economy for Developing Countries: Estimating Capital-Use Matrices and Imported Needs," Working Paper 3f15bd28-99b0-42ff-863c-4, Agence française de développement.
    20. Ignacio Perrotini Hernández & Víctor M. Cuevas Ahumada, 2024. "An appraisal of Thirlwall-Hussain model: Capital flows and economic dynamics in Mexico, 1994-2023," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 19(3), pages 1-18, Julio - S.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-05208165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.