Latin America exports 40% of its extracted resources at the cost of environmental degradation, new study finds
Countries in Latin America and the Caribbean (LAC) export more than double the amount of materials they import—40% of what is extracted annually. The rapid rise in global material demand has become a major driver of environmental degradation and social inequalities in the region. However, a new study finds that implementing circular economy strategies could cut the region’s material use and carbon footprint by roughly 30% each while generating over 8.8 million new formal jobs.
The Circularity Gap Report Latin America and the Caribbean, commissioned by international development bodies* and authored by Circle Economy Foundation, explores how materials are extracted, used and cycled in the LAC region. The report also estimates the potential impact of circular economy strategies in improving the region’s environmental health, reducing carbon emissions, and creating jobs.
According to the report, LAC countries supply over 11% of the world's raw materials despite representing only 8.3% of the world's population. The region consumes, on average, 12.4 tonnes of materials per person per year, which includes biological matter, fossil fuels, metals and non-metallic materials. This is on par with the global average of 12.2 tonnes but far less than many European countries. Switzerland, for example, consumes 19 tonnes of materials per capita, while Sweden uses a whopping 25 tonnes.
The study warns that overconsumption in wealthy countries has damaged the region’s local environment. LAC is the largest net food exporting region worldwide, producing almost a quarter of all meat consumed globally. However, this drives deforestation, resulting in greenhouse gas (GHG) emissions and biodiversity loss. What’s more, current agricultural practices damage pollinators and soil health, threatening the sector’s long-term resilience.
The report calculated that out of all materials consumed in local economies, less than 1% make it back into use in the form of reused and recycled materials. However, reliable calculations are challenging as up to two-thirds of waste in the region isn’t tracked by official statistics. Other data gaps are also prevalent, allowing for illegal landfilling and pollution, and preventing local governments from effectively monitoring waste streams. The report highlights the importance of rigorous waste and material tracking and its reflection in official accounts.
Local governments are also encouraged to recognise the value of circular economy principles, such as regenerative farming, reducing industrial waste and renovating old buildings instead of building new ones. Implementing circular economy strategies in just two sectors—Agrifood and Manufacturing—can cut LAC’s material and carbon footprints by one-third each, ensuring a healthier environment and a safer climate.
The study also estimates that around 8.8 million new formal jobs could be created if the region transitions to a circular economy. In this way, informal jobs could be transitioned to formal employment. Examples of new occupations include recycling facility workers, repair and maintenance operatives, public transport operatives, logistics managers, urban planners, and biotechnicians. The successful implementation of circular strategies can bring other socioeconomic benefits, such as improved health and well-being, and decent work. However, to harness its full potential, the transition to a circular economy must be just and inclusive by design.
*The Circularity Gap Report Latin America and the Caribbean was commissioned by IDB, IDB Invest, ECLAC, UNIDO, UNEP’s initiative Global Opportunities for the Sustainable Development Goals GO4SDGs, the Circular Economy Coalition for Latin America and the Caribbean and authored by Circle Economy Foundation. Read the full Circularity Gap Report Latin America and the Caribbean here.
About Circle Economy Foundation
Circle Economy Foundation envisions an economic system that ensures the planet and all people can thrive. We are a global impact organisation founded in 2011, and to date have worked with 80+ businesses, 31+ cities and 20+ nations around the world. Our practical and scalable approach is focused on empowering decision-makers from the public and private sectors to develop and implement circular economy strategies and business models. We do this by combining research, data, and digital tools for the greater good.
About the Circular Economy Coalition Latin America and the Caribbean (CEC)
The CEC is a regional platform to enhance inter-ministerial, multi-sectoral and multi-stakeholder cooperation, and increase knowledge and understanding of the circular economy. It provides training and technical assistance for the development of public policies related to the circular economy and sustainable consumption and production.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. Access our virtual tour.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $16.3 billion in assets under management and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
The UNEP-led GO4SDGs initiative—Global Opportunities for Sustainable Development Goals—is at the forefront of accelerating efforts towards achieving the Sustainable Development Goals (SDGs), particularly emphasizing sustainable consumption and production (SDG 12) and promoting green jobs and economic growth (SDG 8). It connects global partnerships with regional efforts, amplifying its impact and guiding economies towards sustainability, in line with the 2030 Paris Agreement. The initiative supports governments in policy coherence, facilitates SMEs to secure funding for circularity, and empowers youth to embrace sustainable lifestyles. An integral part of GO4SDGs is the "Green Jobs for Youth Pact", a UN collaboration involving the ILO, UNEP, and UNICEF, dedicated to fostering decent job opportunities for youth and promoting sustainable development and circularity.
The United Nations Economic Commission for Latin America and the Caribbean - ECLAC brings together economic analysis, policies proposals and policy implications, providing technical assistance and international cooperation all over the region. In performing this mission, ECLAC regularly convenes governments, policymakers, and researchers to address economic, social, and environmental challenges for the economic development of Latin America and the Caribbean and translate these challenges into policies at regional and national levels.
United Nations Industrial Development Organization (UNIDO), as a specialized agency of the United Nations, has the primary responsibility to promote inclusive and sustainable industrial development in the developing countries and in countries with economies in transition.