Towards a carbon neutral economy

“Transitioning to a carbon neutral economy is not an easy task, but it is an investment in Panama’s future”

In a world increasingly pressured by climate change and the importance of renewable energy, Panama has a unique opportunity to accelerate its energy transition, strengthen its economy and lay the foundations for a sustainable future. Increasing uncertainty in oil prices due to international conflicts such as the war in Ukraine underscores the urgency of promoting investments in clean and sustainable energy sources.

Indeed, the social unrest that Panama experienced last July was fueled by the profound effects of high fuel prices and their derivatives on the national economy.

As can be seen, Panama, like the rest of the world, is experiencing the effects of climate change. However, it has abundant renewable resources: sun, wind, water and biomass. Transitioning to a carbon neutral economy is not a viable option, but a pressing need.

The path towards a carbon neutral economy means implementing measures that promote the use of clean energy and reduce greenhouse gas emissions. This process has the potential to boost economic growth by creating jobs, increasing competitiveness and improving people’s quality of life.

A recent study by the International Renewable Energy Agency (IRENA) found that Panama has significant potential to generate renewable energy that could contribute to the global goal of keeping global warming below 2 degrees Celsius. Additionally, diversification of the country’s energy matrix will reduce its dependence on oil and, therefore, reduce its vulnerability to price fluctuations in the international market.

Energy transition will also attract new investment to the country. Companies are increasingly interested in investing in projects that contribute to sustainability and the fight against climate change. A few weeks ago, nine major European economies agreed to increase wind power production in the North Sea in Belgium, spurred by the fallout from the war in Ukraine and pressure for renewables.

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Panama, with its strategic location and abundant natural resources, has the potential to become a regional leader in renewable energy.

On the other hand, energy transition has not only economic and environmental benefits, but also social benefits. Affordable, clean energy can improve the quality of life of Panamanians, especially those living in rural or isolated areas, who often have limited access to energy services.

The Government of Panama plays an important role in promoting the energy transition. In fact, the National Secretariat for Energy has been insisting on the right way to accelerate steps towards the energy transition agenda.

These public policies will support investment in renewable energy, energy efficiency, and research and development in clean technologies. It is also necessary to establish clear and measurable objectives for reducing greenhouse gas emissions.

Transitioning to a carbon neutral economy is not an easy task, but it is an investment in Panama’s future. Faced with the uncertainty of oil prices and the threat of climate change, now is the time to take action to ensure a sustainable future for the next generation.

Former Vice President of Panama Canal Operations.

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