Latin American and Caribbean (LAC) countries have pledged to significantly reduce greenhouse gas (GHG) emissions by 2030 and become net zero by 2050.

The level of climate ambition contrasts with the region’s high economic dependence on fossil fuels, and the growing emissions caused by deforestation.

Given the high transition costs, the region needs to develop financial plans that could include the use of carbon pricing as well as the adoption of green fiscal rules.