The IDB urges Latin America to update laws to accelerate the transition to a circular economy.
An analysis by the multilateral shows that countries are on the right path towards circularity and that combined action with different actors will be key to meeting climate goals.
The IDB, BID Invest, and UNEP have published a report highlighting the need for Latin America and the Caribbean to accelerate the transition to a circular economy through the updating of laws and greater collaboration with the private sector to finance circular economy projects.
The report suggests that countries are on the right path towards circularity and that combined action with different actors is crucial to achieving climate objectives. However, the investment required to support the transition to circular models of production and consumption is insufficient.
Therefore, both the financial sector and government agencies must provide innovative financial instruments and policies to accelerate this transition. Additionally, the report suggests that the adoption of a circular economy approach will allow financial institutions to evaluate production and consumption models and discover new solutions to minimize waste and pollution.
Finally, it is recommended that countries in the region work closely with the private sector to create a circular economy financial ecosystem and help SMEs develop capacity and receive funding to adapt or modernize their operations.
The report suggests that countries in Latin America and the Caribbean work in collaboration with the private sector to create a financial system that supports the circular economy. This would involve cooperation between public and private financial institutions to provide financing to circular businesses and projects at different stages of development.
Additionally, the report recommends that governments and financial institutions provide support to small and medium-sized enterprises in their transition to the circular economy, helping them improve their capacity, integrating them into value chains, and providing funding to modernize their operations.