Economists are concerned about funding and a lack of detail on how the government will promote renewable energy and create new green jobs
Poeple are shown walking in a street in La Candelaria district, Bogota, Colombia. Picture: 123RF
“The Petro government has a good chance to create an energy transition policy so that change can happen and be consolidated in the next 15 to 20 years,” said Giovanni Pabon, energy director at Transforma, a think-tank on climate action. Colombia’s economy is heavily dependent on oil and mining revenue, accounting for up to 8% of GDP, government data shows. Across the country, municipalities and provinces rely on royalties they receive from oil and mining projects to finance infrastructure and health and education services.
Existing projects have been allowed to continue, but it is unclear if Petro’s administration will stick with having approved no new oil and gas licensing rounds or oil exploration contracts since August. However, finance minister Jose Ocampo has said Colombia remains open to new oil and gas projects given its huge dependence on fossil fuel income.
While the government develops its energy transition, a recent tax reform has already hit the oil sector, boosting the amount the industry must pay when oil prices rise. The Colombian Petroleum Association forecasts private-sector investment in oil and gas exploration will fall by about a third this year due to higher levies of up to 15% on crude oil.
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