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, 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.

Based on the empirical results reflected in the GEMMES model scenarios, this project aims to develop a strategy game for the collective exploration of future scenarios. Beyond economic and financial aspects, it also addresses the energy transition by integrating social and climate dimensions, as well as, to a lesser extent, biodiversity-related issues.

This participatory modelling process is designed to facilitate dialogue among key stakeholders in Colombia’s transition (ministries, central bank, entrepreneurs, researchers, etc.), enabling them to anticipate and prepare for the short-, medium-, and long-term macroeconomic impacts that a low-carbon transition may generate.

To this end, the serious game Powershift aims to:

• Familiarize stakeholders in Colombia’s energy transition with macroeconomic issues related to transitions, so they can take ownership of these topics;
• Identify the “mental models” of each category of stakeholders regarding the energy transition, in order to better highlight emerging tensions and synergies and help evolve perceptions;
• Make scientific frameworks accessible and engaging to support informed decision-making;
• Improve coordination between public institutions, economic actors, and researchers around energy transition challenges.

This project therefore seeks to strengthen high-level interministerial and cross-sectoral dialogue and, by extension, enhance coordination among stakeholders (including the private sector) in support of Colombia’s environmental commitments.

Download the project presentation leaflet

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 involving policymakers, financial actors, donors, researchers, private sector representatives, and civil society. Key stages include conceptualization, validation, and scenario exploration. Participants are free to define their own strategies; any crises or tensions that arise during the game result from the collective decisions made throughout the sessions.

An ex-ante and ex-post assessment of stakeholders’ positions makes it possible to measure the effects of the approach on knowledge, interactions among actors, and participants’ strategic capacities. Debriefing workshops have been organized with policymakers to ensure effective ownership of the findings.

The project has led to the creation of a strategy game that is now beginning to be used by Colombian counterparts to explore energy transition scenarios. To date, 3 crash-test sessions and 9 game sessions have been held, bringing together nearly 200 public and private stakeholders involved in the energy transition, as well as more than 50 different institutions. These include Colombian universities, ministries (finance, environment, labour, planning, housing, health, energy, agriculture, tourism), the central bank, financial supervisory authorities, commercial banks, research centres, international cooperation actors, NGOs, business associations, and consulting firms. Some sessions included the participation of vice-ministers.

The workshops helped strengthen dialogue at four levels: interministerial; cross-sectoral (with a strong diversity of public, private, academic, and international actors across all sessions); interdepartmental (notably through the mobilisation of the 14 departments of the Financial Superintendency); and public–private.

By mobilising this wide range of stakeholders, PowerShift has marked an important step in strengthening Franco-Colombian interministerial and cross-sectoral dialogue on the energy transition. Outputs include a project synthesis report, a research paper, policy recommendations, and knowledge-sharing materials. Key insights were shared through debriefing workshops with Colombian partners.

Find out more: 

• Summary of the workshops held in June 2024
• Summary of the workshops held in September 2024
• Replay of the restitution workshop & presentation

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

Key comments include:

• Importance of the co-construction process: Developing the game with Colombian partners allowed for the integration of the country’s institutional and economic specificities, which enhanced its credibility and stakeholder engagement.
• Creation of a pedagogical space conducive to dialogue: The sessions facilitated contacts with actors who had not previously been engaged.
• Flexibility and adaptability: The tool demonstrated its ability to adapt to different audiences, making it a valuable asset for a variety of stakeholders.
• Awareness of the complexity of energy transition dynamics: The game highlighted the interdependencies between economic, climate, and social issues, as well as differences in priorities between institutions, helping to better understand potential obstacles to public action.
• Illumination of behavioral dynamics: The sessions revealed that organized collective action primarily emerges in response to urgent issues or shared problems.
• Challenge of a holistic vision: Participants noted that developing a comprehensive view of the energy transition and actors’ strategies is particularly difficult due to the complexity of the subject.
• Success factors for participatory approaches: The involvement of high-level decision-makers and the existence of a safe dialogue space were identified as key factors in fostering participant engagement.
• Limits of the exercise in a short timeframe: While the game facilitates understanding of systemic dynamics, translating this understanding into actionable solutions requires complementary measures and long-term follow-up.

Building on these achievements, potential avenues for extension could include:

• Technical support for potential application of the tool at the territorial level;
• Facilitation of international exchanges to share best practices in participatory dialogue;
• Further strengthening of public–private partnerships through continued use of the tool.

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

The design of the Colombian pension system exacerbates income inequality and poverty after retirement age. High informality rates (over 60% of total employment, according to OECD) imply that many workers in Colombia have a low probability of qualifying to get a contributory pension. Despite the targeted support provided to the vulnerable population through pension assistance programs, this support  tends to be low compared to other countries in Latin America and the Caribbean.

The relationship between informality and inequality after retirement plays a central role in the discussion of policies affecting the labour market. One dimension that has not been explored in the public policy debate is how policies aimed to mitigate climate change (and more specifically the creation of green jobs) can affect the distribution of workers between the formal and informal sectors, and how it can have an impact income inequality after retirement.

Find out more about the Extension in Colombia

This project seeks to contribute to the public policy debate by analysing the effects that scenarios of a green economic transformation may have on income inequality after retirement, via the reallocation of workers between the formal and informal labour markets. 

The project will aim to answer following questions, in the Colombian context:

• What are the environmental properties of jobs?
• How can economic transformation towards a more sustainable economy change the composition and transitions between the formal and informal sector?
• What is the impact on inequality and fiscal viability of implementing those policy scenarios?

In addition, the project will evaluate prospective scenarios during the discussion of the pension reform in the  Colombian Congress and will develop a simulation model for the use of the Ministry of Finance and Public  Credit.

The project will be implemented in three stages:

• The research team will first characterize the environmental properties of jobs in Colombia.
• In the second stage, the team will calibrate the transition matrices between employment states and wages to introduce to the microsimulation model. In this stage, the team will propose the economic transition scenarios to simulate.
• In the final stage of the project, the team will prepare a final report with the simulation results and policy discussion.

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

• Quantifying Green Job Potential in Colombia: A Task-Based Approach (November 2024)
• Greening Colombia’s Energy: The Future of Jobs and Pensions (August 2025)

While there is mounting evidence that the Covid-19 pandemic has increased socioeconomic inequality, there is still a need to understand the exact channels of impact and what role the policy response has played in different contexts. It is also necessary for governments to be clear about the efficiency of the type of policies they have implemented throughout this period, in terms of the redistributive and/or regressive effect both from an inequality and poverty perspective. Indeed, we know that the amount of additional social spending (excluding health) implemented during the pandemic reached almost 3% of GDP in Colombia and only 0,2% in Mexico. However, research has not yet demonstrated whether the redistributive policies introduced by the Mexican and Colombian governments in response to the Covid-19 crisis have had any positive effect on the distribution of economic and social resources in these two countries.

The project will seek to understand what has been the redistributive impact of social and fiscal policy in Mexico and Colombia, in the context of the policies implemented during the Covid-19 pandemic.

This research project will be conducted as follows: 

1. Using the framework of the Commitment to Equity (CEQ) methodology, an analysis aiming to differentiate what has been the progressivity or regressivity of the policies implemented during the Covid-19 pandemic will be conducted. This analysis will take into account the main beneficiary groups of these policies and will include a comparison between the budget amount and the efficiency of the policies identified in terms of inequality and poverty reduction.  
2. A desktop analysis of the decision-making will also be carried out to understand how the redistributive effects of the policies implemented were envisaged by the governments. 

The results of this project are presented in the following research paper: Promoting a More Progressive Approach - Evaluating the Impact of Social and Fiscal Policies in Mexico and Colombia amidst the Covid-19 Pandemic (2025)

This research paper analyzes the redistributive impact of some fiscal policies and social programmes (direct taxes and transfers) before and after the pandemic Crisis in Mexico and Colombia, following the CEQ methodology. 

Download the paper