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As Latin America moves to decarbonize and create a more sustainable future, Panama stands to be a major beneficiary, according to consulting firm McKinsey & Company.

The report focuses on the economic changes necessary to achieve net-zero greenhouse gas emissions by 2050, a goal that is being adopted around the world. In the report, “The Transition To Net-Zero Emissions: How Much It Would Cost, What It Would Bring,” the respected consultancy details the implications for demand, capital spending, production costs, and employment in 69 countries, and singles out Panama for special focus.

The move to a greener future represents many opportunities for Panama, the report concludes. Panama’s move to develop as a “green hydrogen hub” and plans to increase electric mobility starting with a 900-kilometer electric vehicle route to San José, Costa Rica, and Panama can be key drivers for the region, Julio Giraut, lead partner of the McKinsey office in Panama told MartesFinanciero.

“Panama can play a central role in the decarbonization of global maritime transport through the Canal, enabling opportunities for the development of sustainable and high-value value chains, including services,” Giraut said.

The move to carbon neutrality will represent “a huge economic transformation,” McKinsey indicates, with trillions of dollars expected to flow into the movement around the world. In Panama and Latin American countries, it could affect the economies in many ways. For example, investment in transition initiatives for agriculture could increase by 50% by 2050, mainly in low-carbon crops, emission mitigation measures, and reforestation, the firm says.

“An additional comparative advantage for the region is its great mineral wealth,” said Xavier Costantini, senior partner and head of Sustainability for Latin America at McKinsey. Minerals necessary for solar panels, batteries, and other new green technologies are abundant in the region, including in Panama, home to one of the world’s largest copper mines. Many of the Latin American countries will play a fundamental role in the transition thanks to the production of these minerals and their insertion in the global value chain ”.

Investment in green technologies could rise to 8.8% of global GDP between 2026 and 2030, the firm forecasts.