Colombia, a country heavily reliant on fossil fuel exports, is actively working to complete its low-carbon transition and achieve its Nationally Determined Contribution (NDC) targets under the Paris Climate Agreement.

To support these efforts, Agence Française de Développement (AFD) has partnered with Colombian authorities to adapt the GEMMES macroeconomic model to Colombia's specific context. The objective was to assess the long-term macroeconomic vulnerabilities and opportunities linked to Colombia's energy transition within the broader global shift to low-carbon economies.

This research work has culminated in a collaborative publication, which outlines the scientific findings and public policy recommendations derived from the GEMMES Colombia project: Modelling low-carbon transitions in Colombia: Macrofinancial risks and opportunities

While macroeconomic modelling is crucial for understanding the impacts of policy decisions and addressing macroeconomic imbalances during transitions, it is equally important to consider the behavioral aspects that shape the decision-making processes and strategies of stakeholders involved in Colombia’s low-carbon transition.

About GEMMES: AFD and Macroeconomic Modelling Tools for the Ecological Transition

Building on the empirical findings from the GEMMES model scenarios, this project focuses on developing a strategy game to collectively explore future scenarios. Beyond the economic and financial dimensions, this tool also incorporates social, climatic, and—albeit to a lesser extent—biodiversity-related aspects, providing a more holistic approach to the energy transition.

The primary objective of this participatory modelling process is to foster dialogue among the key stakeholders in Colombia's transition, including ministries, the central bank, entrepreneurs, and researchers. By doing so, it aims to help them anticipate and prepare for the short-, medium-, and long-term macroeconomic impacts that the low-carbon transition may bring.

To achieve this, the Powershift strategy game aims to:

• Familiarize stakeholders involved in the transition with the macroeconomic challenges associated with it, enabling them to take ownership of these issues.
• Identify the "mental maps" of each category of stakeholder regarding the energy transition, thereby shedding light on the tensions and synergies that arise and supporting the evolution of these mental models.

In doing so, the project seeks to strengthen high-level interministerial and intersectoral dialogue, ultimately improving coordination among stakeholders—including the private sector—in support of Colombia's environmental commitments.

 

Download the project presentation leaflet (in Spanish)

The design, modeling, and implementation of the strategy game are grounded in the ComMod methodology, initially developed by CIRAD to facilitate multi-stakeholder processes and support collective decision-making and action.

The process includes modelling workshops with stakeholders, crash-test sessions, and game workshops with decision-makers. Key stages involve conceptualization, validation, and scenario exploration. An ex-ante and ex-post evaluation of stakeholder positions will be conducted to measure the impact of the initiative.

To ensure the effective integration of findings into public policies, feedback workshops will be organized with policymakers.

The project has led to the creation of a validated strategy game, which is now being used by Colombian counterparts to explore energy transition scenarios. To date, six crash-test and game sessions have been conducted, engaging around fifty public and private stakeholders in the energy transition and involving more than twenty institutions. These include Colombian universities, ministries (Finance, Environment, Labour, Planning), the central bank, research centers, international cooperation agencies, NGOs, business associations, and consultancies.

Future outputs will include workshop summary reports, a research paper, policy recommendations, and mediation materials. The lessons learned will be shared with Colombian partners through dedicated feedback workshops.

Find out more: 

• Summary of the workshops held in June 2024
• Summary of the workshops held in September 2024

Feedback from participants in the sessions highlights an improved understanding of the effects of the energy transition on the real economy of a country heavily reliant on hydrocarbon exports, as well as increased awareness of the associated challenges.

 

The main feedback points were as follows:

• Creation of an educational space conducive to dialogue: The sessions fostered connections with stakeholders who had not previously been in contact, facilitating new opportunities for collaboration.
• Flexibility and adaptability: The tool proved its ability to adapt to diverse audiences, making it a valuable resource for engaging a wide range of participants.
• Awareness of complex dynamics: Participants gained deeper insight into the intricate dynamics of the energy transition and the crucial role of research in this field.
• Highlighting behavioral dynamics: The sessions revealed that organized collective action often arises in response to emergencies or shared challenges.
• Challenge of a holistic vision: Developing a comprehensive understanding of the energy transition and stakeholder strategies was noted as particularly difficult due to the subject's complexity.

Future sessions will expand to include parliamentarians and deputy ministers, broadening the dialogue to higher levels of decision-making.

Contacts: 

• Annabelle Moreau Santos, Scientific Mediation Officer, AFD
• Antoine Godin, Economist, Head of AFD Macroeconomic Modelling Team
• Audrey Perraud, Research Officer, AFD
• Julien Calas, Agronomist and Research Officer on Biodiversity, AFD

Contactos: 

• Annabelle Moreau Santos, responsable de divulgación científica, AFD
• Antoine Godin, economista, responsable de la célula de modelización macroeconómica GEMMES, AFD
• Audrey Perraud, investigadora, AFD
• Julien Calas, agrónomo e investigador en biodiversidad, AFD

In Colombia, the oil and coal mining industry is an important source of fiscal revenues, including royalties. The Sistema General de Regalías (or General Participation System, GPS) has therefore been set up to organise the transfer of these royalties – that come from the exploitation of non-renewable natural resources – from the Ministry of Finance and Public Credit to territorial entities. These resources finance the provision of services in the sectors of education, health, drinking water and basic sanitation, general purpose and special allocations, in the different regions of Colombia. This mechanism aims at ensuring a fair distribution of income, which is essential since spatial inequalities in terms of access to services are still significant in Colombia – as shown by the multidimensional diagnosis of inequalities carried out with the support of AFD. For example, while in urban areas, the secondary education coverage rate is close to 100%, it is 50% in rural areas.

The Strategy for monitoring, follow-up and control of the resources of the GPS is a public policy tool led by the Ministry of Finance and Public Credit to carry out control over the management of the resources transferred. This strategy, in implementation for almost 15 years, identifies alerts and cases of non-compliance with the goal of assuring continuity, coverage and quality in the provision of public services. This seeks to prevent and mitigate risks in the provision of social services throughout Colombia, which is essential for the construction of equity across the country, as well as to prevent territorial gaps from widening with regards to the institutional capacities of local governments and to the provision of social services for all populations, regardless of their location. 

This project is part of the Extension of the EU-AFD Research Facility on Inequalities. Coordinated by AFD and financed by the European Commission, the Extension of the Facility will contribute to the development of public policies aimed at reducing inequalities in four countries: South Africa, Mexico, Colombia and Indonesia over the period 2021-2025.

This work is also part of AFD's dialogue with the Colombian authorities on tax reform and the reduction of spatial inequalities.

This research project seeks to generate recommendations with the purpose of analysing and strengthening the role of the GPS tool – “the Strategy” – as a mechanism for closing territorial gaps in institutional capacities to provide social services.

Two research objectives have been identified, one in the field of diagnosis, and another in the field of recommendations:

• Identify the achievements, limitations, and challenges of the implementation of the Strategy in closing territorial gaps in the institutional capacities of territorial entities and in the provision of essential social services.
• Provide recommendations to strengthen the Strategy in its role of institutional assistance for the closing of territorial gaps.

The project will focus on sectors that receive more resources from the GPS, present more risks in their provision and are the most relevant as essential social services:

• Education;
• Health;
• Drinking water and basic sanitation;
• Indigenous reservations.

The research methodology will be mixed methods and will include:

• A document review at the level of the Ministry of Finance and Public Credit and the territorial entities selected as a case study;
• A secondary data analysis;
• In-depth interviews with a subsample of the selected territorial entities.

You will find below the different research papers related to this project:

In progress

Contact: 

• Anda David, AFD Research Officer

Public actors need to monitor the state of the environment in order to assess the effectiveness of their actions, prioritize management policies and measures, and thus objectively establish their contribution to the conservation of natural capital. To do so, they must be able to rely on science-based standards to identify the thresholds at which environmental functions can be considered sustainable.

The ESGAP (Environmental Sustainability Gap) is an innovative tool for assessing the condition of a territory’s environmental functions and how sustainable they are. For all critical components of natural capital in the territory concerned (air or water quality, pollution, forest resources, fisheries, etc.), this indicator calculates the difference between their current state and a state that would be sustainable (i.e., a state compatible with the sustainable functioning of the processes necessary for the preservation of life, human activities and well-being). This allows for the calculation of the “environmental sustainability gap”, which highlights the path to environmental sustainability. This can then serve as a guide for public policies to estimate and preserve the critical functions of the natural capital of a given territory. ESGAP has already been tested in New Caledonia, Kenya and Vietnam.

Within the framework of the ECOPRONAT research programme, AFD aims to develop methodologies for assessing strong sustainability, that is, adopting demanding criteria concerning the non-substituability of natural capital by other forms of capital (physical among others) in a territory or country. AFD also wants to promote their use in international frameworks and contribute to emerging international standards on the good ecological state of ecosystems.

Find out more about ECOPRONAT

Building on the previous work of University College London (UCL) on the application of ESGAP in countries of the Global South, this research project led by UCL aims to implement the ESGAP framework in Colombia and South Africa. It will test its relevance in fostering public policy dialogue in these two countries that already have a regulatory framework and natural resources management, but where not all data on biodiversity is available. 

More specifically, this project has four objectives: 

• Developing the ESGAP components related to biodiversity and the state of ecosystems that could be used by Colombian and South African governments, and promoting the use of science-based targets for ecosystem maintenance; 
• Promoting reflection on strong sustainability in Colombia and South Africa through the ESGAP framework, by assessing whether the activities carried out in these countries are within the safe operating space for humanity;
• Clarifying how the ESGAP framework aligns, complements and adds value to other types of existing sustainability indicators that national governments are already using;
• Strengthening the capacity of partner countries to implement the ESGAP framework beyond this research project. 
  
   

The ESGAP framework is based on a dashboard that provides information on changes in the functional state of 23 components of the environment, focusing on the gaps that exist between these changes and the objectives of maintaining or achieving a "good environmental state". These components cover the 4 main categories of critical and essential environmental functions: resource provision, pollution reprocessing, biodiversity and human health. The scores for each of the twenty-three components are then aggregated to form a synthetic indicator and a dynamic indicator.

The research activities in the two pilot countries is carried out by researchers from Stellenbosch University (South Africa) and the National University of Colombia (UNAL). Capacity building will include training four postgraduate students as well as awareness-raising activities targeting policymakers and other stakeholders, in order for them to take ownership of the ESGAP and use it during public policy formulation.

 

The research teams will produce scientific papers on the relationship between the ESGAP framework and other sustainability indicator initiatives, as well as on the work and calculations of the ESGAP indicators carried out in each country, comparing the cases of Colombia and South Africa. A specific report will be produced on indicators of the state of biodiversity and ecosystems as well as the identification of data sources for the two countries studied.

A "Research Conversations" webinar presented the results of the articles to the scientific community in November 2024:

In addition, an international workshop will be organized to present the complementarities between the ESGAP framework and relevant initiatives of existing sustainability indicators.

Finally, the research team intends to produce several documents for decision-makers and public policy actors:

• A summary of the review of biodiversity indicators and the state of ecosystems, which may be useful for negotiations at the Conferences of the Parties (COPs) to the Convention on Biological Diversity and for the design of national biodiversity strategies and action plans (NBSAPs);
• A webinar with a webinar report on the relationship between the ESGAP framework and other international sustainability reporting initiatives;
• A summary for decision-makers in each partner country on the rationale of the strong sustainability development approach and the methodology and ESGAP indicators that enable it to be implemented.

Download the publications related to the project: 

• Enhancing Environmental Sustainability Through the Environmental Sustainability Gap (ESGAP) Framework in Colombia, Policy Dialogues n°67, Editions Agence française de développement, October 2024

Contact: 

• Oskar Lecuyer, research officer, AFD

In Colombia, DANE has made great progress in recent years in the collection and availability of data in order to analyze and better understand the reality of the country. Several studies have been carried out with some of these data, but for several years there has been no comprehensive analysis of inequalities at the national level using several databases to get a complete picture of the country's situation.Since mid-2021, AFD has been working hand-in-hand with DANE and Fedesarrollo to implement the "Multidimensional Diagnostic on Inequalities" based on an innovative reference methodology (created by AFD), which provides a comprehensive view of the country's situation as it covers a wide range of aspects (health, education, incomes, etc.) all under the prism of inequalities and using different indicators and databases.

The objective of the RFI Extension in Colombia, and in other countries as well, is to provide analysis, methodologies, and statistics that allow understanding the state of inequalities in the country, the dynamics and interrelationships with the different areas, sectors, and regions of the economy. The objective is to provide robust and updated data, to provide evidence for the construction of public policies, but also to identify areas where data collection can be improved, and those where research can be deepened to better understand the context and support the construction of public policies aimed at reducing inequalities...

This project is framed in a context in which inequalities acquire crucial relevance in the public policy of the current government and in the agreements adopted by it within the framework of the 2030 agenda, as well as in its entry into the OECD.

This project is part of the Extension of the EU-AFD Research Facility on Inequalities (RFI). Coordinated by AFD and financed by the European Commission, the Extension of the RFI will contribute to the development of public policies aimed at reducing inequalities in four countries: South Africa, Mexico, Colombia and Indonesia over the period 2021-2025.

The project aims to support and strengthen the production of national statistics on inequalities, promoting exchanges and interoperability between DANE and other national and international institutions. More specifically, the main objectives are:

• to implement the methodology of the multidimensional diagnosis on inequalities and therefore create the first national diagnostic on inequalities in Colombia. For this, we will work hand in hand with Fedesarrollo and in close collaboration with DANE ;
• to accompany DANE's technical teams in the production, updating and improvement of statistics on inequalities based on the inequality Diagnostic methodology. These data will be used to monitor over time the evolution of the indicators considered relevant. In addition, and depending on the outcome of the data collected, it will be possible to advance in analyses that integrate elements related to climate change and the environment ;
• to accompany the DANE’s technical teams to support them in the implementation of new methodologies and initiatives that allow obtaining statistics that allow a better understanding of the distribution of income of individuals and households in the country. To this end, the organization of workshops and seminars is planned to share experiences and establish practices that allow high-quality data for decision-making.
  
   

You will find below the different publications related to this project:

• Multidimensional diagnostic on inequalities in Colombia
• Infographic on inequalities in Colombia

Other contents:

• Launch of the multidimensional diagnosis on inequalities in Colombia (recording of the seminar available in Spanish).

Contact: 

• Anda David, AFD Research Officer

Addressing persistent inequalities in income and other dimensions of wellbeing is a key policy objective of the Sustainable Development Goal 10. Multilateral and bilateral donor agencies have been directing their efforts towards promoting good governance, human and economic development, fighting hunger and reducing inequality. 

The increase in development funding towards inequality reduction is accompanied by a need to monitor progress on the SDG 10 but most importantly, by the need to evaluate the contribution of development towards achieving this goal. However, measuring the distributional impacts of development cooperation projects is a challenging task due to a myriad of factors, including the effects that domestic redistributive policies, the structure of labour markets and other factors, such as institutions, have on inequality. The methodology developed by Morabito et al. enables the analysis of the potential contributions of development projects on inequality by looking primarily at the extent to which they disproportionally benefit the most vulnerable through a mix of analytical tools (a scoreboard, a statistical analysis of development projects based on the Equity Tool, a fiscal incidence analysis).

This methodology has first been tested on three development projects funded by AFD in Cameroon, Colombia and Tunisia as part of the first phase of the Research Facility on Inequalities. 

 

This project was part of the first phase of the Research Facility on Inequalities, coordinated by AFD and funded by the European Commission's Directorate-General for International Partnerships over the 2017-2020 period. The first phase of the Facility has led to the conduct of 22 research projects and the publication of around 100 research papers and policy briefs.

A second phase of the research project was launched in 2022 with the aim to extend the initial phase, to further test the validity of the methodology with respect to income and other forms of inequalities and to develop the guidelines for an inequality marker.

The initial phase of the  project aimed at piloting the application of the methodology developed by the researchers on three projects funded by the AFD: 

• A programme supporting urban housing improvements in Tunisia;
• A programme focusing on capacity-building of Small- and Medium-Sized Enterprises in Cameroon;
• A budget support operation aimed at supporting a health sector reform in Colombia.

The objective was to test the methodology and evaluate the relevance of its results, and, based on these findings, to review and adjust the methodology itself.

The second phase of the project aimed:

• To develop the guidelines for an inequality marker for development cooperation ;
• To further test the methodology on four AFD and EU development programmes:
  • A programme promoting sustainable access to electricity for the unserved poor rural populations in Benin;
  • A programme improving the health and living conditions of the inhabitants of the rural district of Isingiro (Uganda) and its refugee camps;
  • A programme facilitating trade between Ethiopia and Djibouti and enabling businesses and producers, as well as the most vulnerable populations, to benefit from these improvements;
  • A programme contributing to the adaptation of the communities to climate change in Vietnam. 

The initial study identified whether programmes’ beneficiaries of the three selected interventions belonged to the bottom 40% of the wealth distribution, through a mix of analytical tools:

• First, a scoreboard that assessed whether or not inequality reduction was a central objective of development programmes; 
• Second, the Equity Tool, which helped assess the position of direct beneficiaries within the national (urban or rural) wealth distribution;
• Third, the Commitment for Equity Tool, which helped estimate the distributional impact of general or sectoral budget support.

The methodological steps of the second phase of the research project were the following:

• Refining and upgrading the inequality markers and the scoreboard to provide clear benchmarks and indicators, aligned with evaluation approaches used by the European Commission, to assess whether development interventions focus on the poorest bottom 40% individuals, households or vulnerable groups that are targeted by specific development policies;
• Extending the scope of the Equity Tool questionnaire to include questions that capture the distribution of projects beneficiaries among vulnerable groups (women, ethnic, religious minorities, etc.);
• Applying the revised methodology to the four case studies.

Results of the first phase of the project:



Overall, the results underscore the importance of considering a pro-poor targeting ex-ante when designing development cooperation interventions that explicitly (or implicitly) aim to contribute to the reduction of inequalities in partner countries. The main strength of the methodology is that it allows an assessment of the potential reach of interventions for the bottom 40 percent of the income distribution. Therefore, the information provided thanks to this methodology can be critical to fine-tune policies before they are implemented and maximize their redistributive impact.



You may find the research paper here: The distributional impacts of development cooperation projects

 

Results of the second phase of the project:



The second phase of this project resulted in :

• The elaboration of guidelines for the implementation of the methodology, which were used to develop the European Commission's Inequality Marker. The I-Marker assesses whether, and to what extent, inequality reduction is an objective of development intervention. For this purpose, a set of criteria has been developed to establish if: - I-0: Inequality reduction is not targeted; - I-1: Inequality reduction is a significant objective; - I-2: Inequality reduction is the principal objective. The I-Marker focuses on the bottom (poorest) 40% or socio-economically disadvantaged individuals, households or groups. Watch the video on the Inequality Marker for more information ;
• A report on the testing of the methodology on the four case studies (available soon).

This project highlighted the importance of identifying direct and indirect beneficiaries of the projects, but also, more broadly, of having a complete understanding of the development cooperation interventions, which are being analyzed, especially their objectives and conditionalities. 

Equally important is the involvement of key stakeholders to communicate the objectives, scope and limitations of the studies. In some cases, the inclusion of a qualitative component in the form of interviews, consultations, or eventually field missions, may be required to ensure the successful implementation and completion of studies.

Contact:

• Anda David, Research Officer, AFD

Contacto:

• Anda David, encargada de investigación, AFD