By Lyes Ferroukhi and Karin Metell
PANAMA CITY, Panama, Jun 4 2025 – In a world marked by armed conflict, threats to democracy, technological disruptions, and geopolitical tensions, many people are asking: Why should we prioritize environmental crises when there are other, more visible or perceived as more urgent challenges?

From the perspective shared by the United Nations Development Programme (UNDP) and Sweden, through the Swedish International Development Cooperation Agency (SIDA), the answer is clear: there is no prosperous economy, stability, peace, or development possible on a degraded planet.

The so-called “triple planetary crisis”—climate change, biodiversity loss, and pollution—is not an isolated environmental problem: it is a multiplier of social and economic risks. It disrupts markets, weakens food security, drives forced migration, and erodes community resilience.

However, this crisis also represents a historic opportunity to rethink current development models and explore possible solutions. Latin America and the Caribbean could lead this paradigm shift by example. The region is home to 40% of the planet’s biodiversity and key ecosystems for climate regulation.

Karin Metell

Yet, it faces a paradox: its enormous natural capital stands in stark contrast to insufficient funding to protect it. The Paulson Institute, The Nature Conservancy, and Cornell University estimated in 2020 that the international biodiversity financing gap is between US$598–$824 billion annually.

At the same time, international resources for climate action fall far short of what is needed. According to the Economic Commission for Latin America and the Caribbean (ECLAC), the region needs to multiply its climate finance flows by 8 to 10 times to meet the commitments countries outlined in their Nationally Determined Contributions (NDCs), which are essential for reducing emissions and adapting to climate change.

Faced with this challenge, green finance becomes a strategic tool. Achieving this requires ambitious public policies, solid regulatory frameworks, real commitment from major productive sectors, and, above all, large-scale resource mobilization.

Here, the private sector can and must be a key player, especially if it has an enabling framework that reduces investment risk, supported by governments and their public and financial institutions.

UNDP and Sweden are working together through the Green Innovative Finance for Latin America and the Caribbean (GIF 4 LAC) initiative. This partnership supports countries in mobilizing climate and environmental finance by strengthening their regulatory frameworks, generating data to improve transparency, and facilitating collaboration with the private sector. The goal is clear: to make sustainability a viable, scalable, and replicable investment.

Lyes Ferroukhi

We are already seeing results. Thanks to a course organized by UNDP and INCAE Business School as part of the initiative, a government team in El Salvador strengthened the case for an electric bus project in San Salvador. The project secured a $5 million loan from the Development Bank of Latin America and the Caribbean (CAF) and has the potential to mobilize up to an additional $300 million to transform the country’s public transport system.

We are also collaborating with leading companies such as Devcco, which promotes clean technologies for district cooling systems in Latin American cities, and Avfall Sverige, the Swedish Waste Management Association, which promotes the zero-waste model. It is indeed possible to align profitability with sustainability.

Additionally, this initiative seeks to maximize the potential of the UNDP Environment and Energy team’s portfolio in Latin America and the Caribbean, which includes a large portfolio of projects financed by international environmental funds and platforms supporting public policy and finance like the Climate Promise and the Biodiversity Finance Initiative (BIOFIN). These represent the largest offer of support for NDCs and National Biodiversity Strategies and Action Plans (NBSAPs).

We can say with certainty that protecting the planet is promoting economic and social development in a sustainable way. There will be no growth without healthy ecosystems, and no competitiveness without sustainability.

This is a goal that should inspire us to work together. We are facing a historic and decisive opportunity that requires the participation of more and more stakeholders. Investing in nature is investing in the future.

Lyes Ferroukhi is Regional Team Leader, Environment and Energy in Latin America and the Caribbean, UNDP.

Karin Metell is Head of Regional Cooperation for Latin America, Swedish International Development Cooperation Agency (SIDA)

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