Why Gustavo Petro’s Fossil Fuel Plan is Bittersweet for Colombian Businesses

Newly elected Colombian President Gustavo Petro has pledged that “the world needs an immediate withdrawal from the oil and gas industry”, marking a huge step towards net zero emissions. Starting by cutting back production significantly in his own country, Petro’s plan is not being received well by local communities who are feeling the full force of layoffs.

By far one of the most fossil fuel dependent countries committing to a green agenda, the transition will not be easy for local businesses and employees, but it is hoped the long-term benefit will eventually overshadow this initial struggle. Here is what Economist Tim Snyder at Matador Economics had to say on the state of Colombia’s transition.

“As newly elected President Petro announced that the world needs to immediately withdraw from the oil and gas industry, Petro and economists and the nation’s first ever elected leftist pledge to keep the country’s fossil fuel resources in the ground. Petro has strong ties to South American neighbor Venezuela and has committed to work with their government. In early October of this year, he also committed to US Secretary of State Lincoln to follow the lead in working to cancel fossil fuels completely. In Northern Columbia.

The multinational conglomerate Glencore recently closed two of its Columbian coal mines. Since the closer of the area has seen a drop of more than 7,000 jobs from a workforce of 7,300. Contractors, left town, restaurants, close cafes, close hotels close, and other businesses closed. The local branch of the country’s largest coal miners War Union says as a result, one municipality lost 85% of its income.

In contrast, Columbia’s one of the nation’s leading producers of coal globally, and its economy is heavily dependent upon fossil fuels. A recent publication shows between 40 and 50% of Columbia’s exports are coal and oil taxes and dividends from the sectors.

Partially state-owned oil company, Ecopetrol, the largest company in the country, account for more than 9% of the central government’s income.”