During the Era of Markets, global fossil fuel consumption continued to rise, providing broader access to energy. As of 2019, 84% of global energy consumption relied on fossil fuels, a figure that has remained largely unchanged for three decades. Global energy investment has stagnated, with 2022 spending on energy infrastructure falling short of the 2014 peak.
Many of the region's economies depend on fossil fuels for income and foreign exchange. However, Latin America also boasts some of the world's best conditions for new sources of energy generation, including hydro, wind, and solar power, with the Andes offering exceptional photovoltaic potential. The recent increase in energy commodity prices may boost fossil fuel exports and simultaneously encourage a domestic shift towards new sources of energy.
Around 60% of Latin America's electricity is renewable, twice the global average, but only about 20% of its final energy use comes from electricity, similar to the global rate. The region could leverage its potential for solar, wind, biomethane, biofuels, and existing hydroelectric power. Latin America also has the potential to become a major, cost-effective hydrogen producer, aiding both domestic the global energy market.
Latin America is rich in essential resources for the technological sources of energy. The region possesses around half of the world's lithium reserves, 36% of its copper, and 16% of its nickel. Brazil, in particular, is home to some of the largest reserves of rare earth elements outside of China. Additionally, the region is a key player in global ecological stability and sustainability, holding about 50% of the planet's biodiversity and 23% of its forests.
This abundance places Latin America in a unique position to contribute significantly to global efforts for new sources of energy, from renewable energy value chains to forest carbon sequestration. However, this transition also raises concerns about the impact on local communities. For instance, the controversy surrounding lithium mining in Chile exemplifies the potential conflict between local community needs and global transition demands. Similarly, efforts to reduce deforestation and promote afforestation must be managed in a way that ensures benefits for communities living near forests.
UN World Population Prospects (2022)
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