Macro-Fiscal Impacts of Colombia’s Energy Transition Plan
Selected Issues Papers, November 25, 2025
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- Macro-Fiscal Impacts of Colombia’s Energy Transition Plan
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Bibliographic details
- Authors: Marco Arena, Alberto Garcia Huitron, Bihong Huang, Daria Kolpakova, Roberto Perrelli, Alpa Shah, Philippe Wingender
- Published: November 25, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229029278.018
Executive summary and core findings
- The paper assesses the risks and opportunities of Colombia’s energy transition plan.
- A sharp fall in oil and coal production would weigh heavily on fiscal sustainability and regional economies.
- A well-managed expansion of renewable energy is essential to mitigate these effects.
- Complementary domestic, financial, and export-oriented reforms would further mitigate economic costs and support a sustainable, growth-enhancing transition.
- Emphasis on diversification, productivity gains, and stronger competitiveness as critical to ensuring the transition is sustainable and growth-enhancing.
Risks to fiscal sustainability and regional economies
- Sharp declines in oil and coal production pose significant risks to fiscal sustainability.
- Regional economies that depend on mining and hydrocarbon production would be heavily affected.
Mitigation strategies through renewable energy and social policies
- Expansion of renewable energy is presented as a key mitigation channel.
- Policies to reskill workers are highlighted as necessary to manage labor market adjustments.
- Protections for vulnerable communities are emphasized to maintain social cohesion.
- Fostering broad social support is identified as important for successful implementation.
Complementary reforms to reduce economic costs
- Domestic reforms to enhance diversification and productivity are recommended.
- Financial reforms are noted as part of the measures that would mitigate economic costs.
- Export-oriented reforms and stronger competitiveness are underscored to support long-term growth.
Content in this bundle
- Projected Fossil Fuel Production and Prices—Global Scenarios