Colombian President Gustavo Petro won his election last June partly on promises to usher in a new age of clean energy in the country. He has frozen new oil exploration projects and promised to wean Colombia’s economy off the hydrocarbon extraction industries on which it depends. His bold energy plans may have found common ground with his US counterpart, President Joe Biden.

When Petro met with Biden last month, he brought with him his sales pitch for what he calls “a just energy transition,” and the message seemed well received by the White House. Immediately after the meeting, the Biden administration announced a $500 million donation to the rainforest fund—a program run by Brazil to fight deforestation in South America—and promised $1 billion to the Green Climate Fund, the main climate financing tool of the United Nations.

Less covered by international media, however, was a discussion between the two presidents about the possibility of forgiving Colombian public debt in return for climate action and conservation efforts.

Petro, in statements the following day, said that the two countries will work together to build “a renewed Alliance for Progress with a view to developing clean energy in the Americas,” part of which could include a US proposal to the International Monetary Fund (IMF) to help secure financing. He called the debt relief conversation "the most important agreement with President Biden; it could quite literally change the world."

Many experts have long advocated for programs through which developed nations, which have long produced the lion’s share of global greenhouse emissions, incentivize developing countries' efforts at tackling climate change. The IMF has signaled a willingness to engage in debt-forgiveness deals in the past in return for climate action, usually with the support of third parties, though projects have to date been relatively small in comparison with their total activities (and not without problems for receiving countries.)

But for Latin America—which has long faced both debt problems and the challenge of serving as the guardian of not just the Amazon, which is the largest carbon sink in the world, but also some of the richest biodiversity on the planet—broader development or reform of debt-relief programs could be a game-changer in current energy development models.

Deforestation as well as oil extraction have risen sharply across the region in recent years as economic growth in developing nations leaves them struggling to meet rising energy demands. The countries facing large amounts of debt also face pressure to ramp up extractive industries to pay off that debt. For countries whose GDPs are minuscule in comparison with the US's, investing in clean energy and providing financial incentives to protect priceless biodiversity are often at odds with a desire to engage in fiscal responsibility.

“The world is facing a fast-approaching and unprecedented crisis in climate change,” said Luis Fernando Medina, the Colombian ambassador to the Organization for Economic Cooperation and Development (OECD), an organization of 38 countries founded to stimulate economic progress and world trade. “Everyone has a stake in this situation,” he said. “And as more countries in the Global South develop, their energy needs develop too. We need to think about a change in the traditional development paradigm [to avoid the traditional model in which developed economies also require more carbon extraction] if we hope to avoid a global crisis.”

Biden and Petro have not discussed details on exactly how debt-relief in exchange for climate action might work, but the impetus for wealthier countries to help emerging-economy countries enter the clean energy sector could not be more pressing, and not just on the basis of climate change. “The climate risks of not carrying out a clean energy transition globally are also fiscal risks,” said Guy Edwards, a climate researcher and Latin American analyst at the University of Sussex, “and a just transition away from fossil fuels toward decarbonized energy systems decreases those risks.”

Edwards explained that it isn’t just environmentalists who are aware that fossil fuels have an expiration date but also oil companies and financial entities such as the Inter-American Development Bank, which has been plain on its position that emerging markets in the Americas will need to enter clean energy markets. “The market is shifting rapidly toward renewable energy and electric vehicles as record levels of investment in low-carbon technologies in 2022 show,” he told Sierra. “The idea that demand will continue to rise globally for fossil fuels in the future is therefore a very risky assumption, and industry and financial-sector actors who don’t want to get caught with stranded assets are already factoring this into their thinking. A discourse of delay isn't helping us fund and build the infrastructure we need to make this transition. And some oil majors appear less concerned with supporting efforts to limit global warming to 1.5 degrees Celsius and confronting these climate risks.”

Ana Carolina González Espinosa, senior program director in Colombia at the Natural Resource Governance Institute, agreed the moment to fund transitions has been accelerated by contemporary economic pressures. “The war in Ukraine has meant higher energy prices in the short term, a situation which created more profits for coal and gas in Colombia,” she said. “But that isn’t likely to last, just from a national security standpoint. We already see Europe responding to that situation by heavily investing in renewables in order to lessen their dependence on imports. The paradigm is changing, and the [Colombian] government wanting to get ahead of those developments is welcome news,” she continued. “The idea that climate change seems to be at the center of a US-Colombia relationship is exciting, but we need to consider what a just transition means.”

Espinosa explained that clean energy requires enormous investment, infrastructure, and planning, just like the oil industry, and a transition won’t happen overnight. “Decarbonization of the industry isn’t just building solar panels,” she said. “It requires transmission and distribution infrastructure, energy storage capacity, and long-term planning.”

Medina explained that debt-forgiveness packages for climate action in the past have been small, offered to countries whose debt was in distress, and came with conditions imposed by multinational lenders such as the IMF or the G7. “And these countries emerge from the deals with a tarnished credit reputation,” he said. “This is an incentive not to take the deals. We are facing a global existential crisis in the long term,” he said. “The current model is bonkers. A completely new approach is needed.”

It wasn’t just Edwards who mentioned “discourses of delay.” “One of the arguments I hear against a large multinational accord between the US, Europe, and Latin America to tackle energy transition is that ‘this has never been done before. We can’t do this,’” said Medina. “My response to that is always, ‘Look, in 2020 a new virus unknown to science paralyzed the world, and a coordinated global response resulted in multiple vaccines in less than a year. That had never happened before either.’”

Medina strongly believes a financial deal that works for all parties to fund energy transition isn’t only possible, it’s imperative. “We have no choice. Economies in the Global South are going to continue growing and eventually take on larger roles globally, as India and China have done,” he said. “The US and Europe are natural partners for Latin America in making sure new energy needs are filled by renewables. They can be part of that dynamic, and benefit from the investment, or they can be left out, and those energy needs are likely to be filled in the short term by fossil fuels.”

Colombia seems to have found common ground with its closest ally on the issue. Whether that translates into transformative regional cooperation remains to be seen, but every expert who spoke to Sierra agreed that delaying will only make the process more expensive, and may well be risking lives.