It’s time for South America to change how it plans for its economic future.
Unless the world unites to decarbonize, carbon emissions and temperatures will continue to rise, and an increasingly climate-damaged economy will become the new normal, leaving South America one of the worst-affected regions on earth. But there is an alternative path.
Fully committing to a decarbonized future would create an economic turning point for South America.
By 2070 the region could have 2 million more jobs than it otherwise would in a climate-damaged, emissions-intensive world. The net benefit of the transition could grow to 1 per cent of GDP in 2070–US $150 billion–a benefit that could increase with each subsequent year.
Transforming South America’s economies to create a net-zero future will require a significant commitment of leadership, time, resources, and coordination. But it offers a path to a prosperous and low-emission future. This potential future avoids the worst impacts of climate change and creates sustainable long-term economic growth for South America and the world.
The turning point
South America highlights
Planning for South America’s economic future
The cost of inaction on climate change
The cost of doing nothing on climate change is economically devastating
Unless the world unites to decarbonize, carbon emissions and temperatures will continue to rise, and an increasingly climate-damaged economy will become the new normal for South America. In a 3°C world, a changing climate will impose exorbitant costs on businesses, industries, human health, and quality of life in South America.
If climate change is left unchecked, South America will be one of the worst-affected regions on earth
Without significant global action to fight climate change, South America could suffer approximately US $17 trillion in economic losses (in present value terms)ii by 2070. The largest impacted industries include services, manufacturing and retail and tourism.
Source: Deloitte Economics Institute.
The opportunity for South America
A decarbonized future would create a turning point for South America
US$150 billion added to South American economies in 2070.
By 2070 the region could have 2 million more jobs than it otherwise would in a climate-damaged, emissions-intensive world. The net benefit of the transition could grow to 1 per cent of GDP in 2070--USD $150 billion--a benefit that could increase with each subsequent year.
Transforming South America’s economies to create a net-zero future will require a significant commitment of leadership, time, resources, and coordination
Transitioning to a net-zero world and limiting warming as close to 1.5°C requires an industrial and economic transformation. South American economies have long been tied to carbon-intensive agriculture, land use and fossil fuels, so reducing their emissions profile will incur significant transformation costs, but the cost of inaction will be far greater. Deloitte’s analysis identifies the turning point, or the pivotal moment, when the accrued benefits from South America’s decarbonization could start to outweigh the costs. The turning point concept highlights choosing transition will mean that, despite initial costs, countries and industries could see dividends, both in terms of avoided costs from climate change, and in the form of new industries and technologies.
Source: Deloitte Economics Institute.
Time to act
Four phases will shape our economic and climatic future
- Bold Climate Plays – 2021 – 2030: Decisions begin to accelerate decarbonisation at scale
- Accelerate to Zero – 2031 – 2045: Big economic shifts occur in policy, energy systems and consumer behavior
- Towards the turning point – 2046-2065: Decarbonization of high-emission industries almost complete. Wider economic gains begin offsetting costs of the transition.
- Low-emission future – 2065 onwards: Radical transformation of economic structure offering new sources of growth. South American economies near net-zero emissions and operating in a world that keeps global warming to around 1.5°C.
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