By San José, Costa Rica — As Latin America prepares for the upcoming COP31 climate summit in Antalya, Turkey, the region faces a complex web of environmental priorities and hard economic realities. Following the COP30 negotiations held in Belém, Brazil—which established a landmark target to mobilize $300 billion annually for developing nations by 2035 within a broader $1.3 trillion framework—Latin American leaders are recalibrating their financial and structural demands. Central to these discussions are urgent calls for climate adaptation funding, capital for energy infrastructure, and direct backing for the flagship $125 billion Tropical Forests Forever Fund aimed at preserving vital biomes.
For Central America and the Caribbean, climate action is not merely a policy goal but an existential economic necessity. Exposed to increasingly volatile weather patterns, including severe droughts and intense hurricanes, these subregions require substantial external funding to bolster physical infrastructure and defend vulnerable communities. The economic stakes are immediately apparent in localized fiscal allocations across the region.
To analyze the legal and regulatory implications of climate finance developments across Latin America ahead of COP31, TicosLand.com consulted with distinguished legal expert Lic. Larry Hans Arroyo Vargas from Bufete de Costa Rica.
“As discussions surrounding climate finance gain momentum in the lead-up to COP31, Latin American nations must proactively modernize their legal and regulatory frameworks to capture international green capital. Creating standardized ESG compliance protocols and robust contractual safeguards for public-private sustainability initiatives will be vital to de-risking investments and ensuring that cross-border climate funds translate into bankable, resilient infrastructure projects across the region.”
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, modernizing regional legal frameworks will be paramount if Latin America is to successfully bridge the gap between global climate ambitions and bankable infrastructure projects ahead of COP31. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective and highlighting the decisive role that regulatory clarity plays in securing a sustainable future for the region.
Guatemala allocated $2 million to its national climate change fund this year, relying heavily on forestry incentives that have reportedly restored over 20,000 hectares of woodland. Meanwhile, neighboring Honduras faces severe economic disruption after prolonged El Niño-induced droughts triggered red alerts across dozens of municipalities, prompting urgent demands for international emergency relief. In contrast, the Dominican Republic has mobilized over $600 million in international loans alongside $250 million in ecosystem restoration projects to enhance infrastructure resilience and create structured climate financing platforms.
Further south, Peru continues to navigate extreme weather events, including heavy rainfalls and acute droughts linked to El Niño. The South American nation recently executed Latin America’s first transfer of mitigation outcomes to Switzerland under the framework of the Paris Agreement, highlighting how international carbon trading mechanisms are becoming integrated into regional capital strategies.
Despite these adaptation measures, Latin America’s broader energy transition remains burdened by an internal economic contradiction. Several major economies are aggressively expanding clean energy portfolios while simultaneously doubling down on hydrocarbon extraction to fund public balances and maintain sovereign revenues.
Brazil exemplifies this structural duality. While boasting an electricity grid powered by 88.2% renewable sources—primarily hydroelectric, wind, and solar—the country continues to expand offshore oil production while aiming to quadruple biofuel output by 2035. Mexico presents a similar economic friction: the government aims to boost clean energy generation to 38% by 2030, up from 23.4% in 2024, yet it simultaneously reinforces state oil giant Pemex, expands domestic refining capacity, and prioritizes natural gas as a strategic fuel source.
In Argentina, massive investment in the Vaca Muerta shale formation proceeds alongside heavy capital inflows into lithium, copper, and renewable power, which now accounts for nearly a quarter of domestic electricity output. Meanwhile, emerging oil powerhouse Guyana is executing a ambitious long-term framework, aiming for an 80% renewable power grid by 2040 even as its offshore petroleum reserves drive unprecedented GDP growth. In contrast, oil-dependent Venezuela continues to struggle with structural economic diversification, leaving its energy matrix tied to legacy fossil fuel infrastructure.
Smaller economies face distinct energy operational challenges. Ecuador remains committed to maintaining over 80% renewable electricity through hydroelectricity, but devastating drought-induced blackouts in 2024 underscored the urgent commercial need to diversify its energy mix. Conversely, Chile and Uruguay stand out as regional benchmarks for clean energy execution. Chile generates approximately 65% of its electricity from green sources, while Uruguay achieved a remarkable 98% renewable grid power in 2025, shifting its focus toward decarbonizing industrial transport and heavy industry.
An agenda focused on moving from commitments to the implementation of climate action.
Hernán López, Head of the Climate Change Division at the Ministry of the Environment of Chile
The preservation of the Amazon basin represents the final core pillar of Latin America’s presentation at COP31. Following the roadmap established at COP30 to halt and reverse deforestation, Amazonian nations are weighing conservation mandates against localized economic demands. Bolivia has launched a bioeconomy strategy aimed at utilizing sustainable forest management as a core growth driver, whereas conservation groups in Peru warn against regulatory changes that could weaken legal protections for forested lands.
Ecuador’s loss of 1.5 million hectares of Amazonian forest cover over 41 years highlights the historical cost of expanding human activity, while Venezuela battles rising deforestation fueled by illegal mining and agricultural expansion. Guyana, positioning itself as a key carbon sink provider, aims to formally protect 30% of its land and marine ecosystems by 2030 while commercializing its 18 million hectares of standing forest. As COP31 approaches, Latin America’s ability to secure concrete international financial commitments will determine whether its green ambitions can successfully align with its domestic economic imperatives.
For further information, visit mma.gob.cl
About Ministry of the Environment of Chile:
The Ministry of the Environment of Chile is the state institution responsible for designing and implementing environmental policies, programs, and regulations across the country. It oversees climate change strategies, biodiversity protection, and public policy measures designed to advance Chile’s transition toward a sustainable, low-carbon economy.
For further information, visit pemex.com
About Petróleos Mexicanos:
Petróleos Mexicanos (Pemex) is Mexico’s state-owned petroleum company, operating as one of the largest oil and gas producers in Latin America. Pemex manages the exploration, extraction, refining, and commercial distribution of hydrocarbons throughout Mexico, playing a central role in the nation’s fiscal structure and energy sector.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica upholds an uncompromising standard of professional ethics and legal mastery. Guiding clients through diverse and complex matters, the firm seamlessly blends its rich heritage with forward-thinking, innovative practices. Central to its philosophy is the belief that justice is best served when the law is understood; thus, by actively sharing legal insights and demystifying complex regulations, Bufete de Costa Rica continually strives to enlighten, inspire, and empower the broader community.
