Environmental Crisis and Sustainable Development in South America

Abstract South America has compelling reasons to address the climate and environmental crisis. First, the region is highly vulnerable to its impacts due to its economic reliance on natural resources and the susceptibility of its population. Addressing these vulnerabilities is crucial for the well-being of current and future generations. Second, as the global economy shifts toward more sustainable pathways to address the crises, South America has the potential to benefit economically by leveraging its clean energy matrix and abundant reserves of critical minerals, positioning itself as a key supplier in the global transition toward renewable energy and electric mobility. However, challenges such as poverty, inequality, and political and economic instability often divert attention and resources away from environmental priorities, constraining the region’s ability to fully embrace and implement comprehensive environmental policies. Integrating decarbonization efforts with economic diversification objectives could help address environmental and developmental challenges simultaneously, building the necessary internal support for difficult policies. This approach is essential to avoid a new “green resource curse,” which, in South America, would mean remaining limited to being providers of natural resources, but now for a decarbonizing global economy. This scenario could perpetuate historical and persistent social, environmental, and economic challenges. A major obstacle to green industrialization in the region is “structural path dependency”—a phenomenon that typically affects regions heavily reliant on a few low-complexity economic sectors, limiting their capacity to diversify into more complex products. To address this challenge, significant socioeconomic and political efforts are needed. Restricted resources, limited institutional capacities, and heavy dependence on powerful stakeholders, typically linked to carbon-intensive and environmentally damaging activities, hinder effective environmental governance, often leading to a “race to the bottom” where regulatory leniency is granted to attract large extractive investments. Despite the obstacles, external and internal forces are driving positive changes in the region. International pressures, such as border carbon adjustments and environmental standards, are encouraging governments and companies to adopt greener practices. The region is introducing innovations in sustainable agriculture and agroecology, and developing novel technological approaches in the extractive sector. Local movements, civil society organizations, and feminist groups have played a very important role, consistently advocating for better environmental and social outcomes and more democratic decision-making. Their demands have contributed to gradually strengthening environmental institutions. A recent milestone in this direction was the signing of the Escazú Agreement, aimed to improve public access to environmental information and justice, among other initiatives. The region is also gradually advancing in climate policies under the Paris Agreement, as well as in biodiversity protection programs under the Kunming-Montreal Framework. Three key areas of work for a just transformation in the region include: (a) strengthening state capacities for environmental management through essential institutional reforms that empower environmental and social authorities while ensuring comprehensive policy integration across key areas; (b) empowering civil society and local communities and supporting vulnerable groups affected by the transition, as justice in reforms is vital for legitimacy, especially given budget constraints and historical injustices; and (c) advancing diplomatic efforts to elevate global discussions on climate justice and reparations, which are essential for securing financial support and addressing the region’s pervasive sense of injustice.

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