Colombia is the world’s fifth largest coal exporter, with the sector representing 1.1% of the national GDP in 2019 and 40% of the GDP of coal-producing territories. Coal provides direct employment for more 35,000 people and pays over 760 million USD worth of royalties per year to local governments. Yet, as global demand for coal is expected to drop and with it the possible end of mining concessions between the next 15 years, Colombian livelihoods are at risk with an imminent recession for coal-producing regions and for those regions benefiting directly from coal-supported royalty payments. In addition, Colombia’s unemployment rate jumped to 15.9% in 2020 compared to the 10.5% in 2019 to due the COVID-19 fueled economic crisis.

GGGI Colombia is therefore supporting the National Mining Agency to develop Climate Neutral Coal and Economic Transition Strategy. The strategy – known as Climate Neutral Coal – outlines adding value to Colombian coal exports through offsetting the emissions caused by coal combustion from the international buyer. Emission offset and socioeconomic transition will be materialized through land use projects such as commercial forest plantations, silvopastoral systems, agroforestry systems, and productive restoration and conservation of natural forests. The strategy will target the creation of formal green jobs to benefit community livelihoods in the short, medium, and long term (2021-2040) in Colombia’s coal-producing and other economically vulnerable regions currently dependent on receiving royalties supported by coal.

The key piece of the puzzle is to guarantee that the Climate Neutral Coal Strategy will be included into the government’s post-COVID recovery packages. The strategy, currently under construction in terms of stakeholder definition, goals, and finance model, is expected to begin implementation in the second quarter 2021. Early strategy implementation would get the ball rolling for the green socio-economic transition of coal-producing regions, therefore mitigating a mid to long-term socio-economic crisis in these regions and kick start the Colombia´s green recovery.

The project aims to incorporate the Post COVID recovery investments into the Climate Neutral Coal and Economic Transition Strategy. The project includes the generation of a straight-forward job, cost-revenues, and carbon capture model (economic model); the recovery investment mapping that could be linked to the strategy; the high-level prioritization of the investments towards the strategy and their commitment; the structuration of a pilot implementation of the strategy.

Climate Neutral Coal Strategy is implemented with the recovery packages investments.

Inclusion of a Climate Neutral Coal Strategy in Colombia’s COVID-19 recovery investments leads to a just transition towards a forestry-based green economy that increases green jobs and reduces GHG emissions.