Paraguay's Energy Sector: Hydropower, Decarbonization, and Sustainable Development

2013 Report: Leveraging Paraguay’s Hydropower for Sustainable Economic Development

Paraguay is largely dependent on agricultural production, which has led to volatile economic performance in the past, resulting from climatic circumstances and commodity price fluctuations. To address these two key policy challenges, the Government of Paraguay approached the Earth Institute to: 1) explore the potential of a climate risk management system and sustainable agriculture activities to mitigate environmental vulnerability, and 2) develop a high-level strategic plan to use Paraguay’s vast hydropower resources for sustainable economic development and the diversification of its economy

Together with the Center on Globalization and Sustainable Development, CCSI published in 2013 a report on Leveraging Paraguay’s Hydropower for Sustainable Economic Development.” The report (traducción inofficial en español):

  • outlines the current challenges faced by the electricity sector and recommends how these could be addressed;
  • provides suggestions for how Paraguay could use its excess electricity to diversify its economy and reduce its fossil fuel dependency and;
  • analyzes past revenue streams from electricity exports, suggests ways to maximizing future export revenues, and provides management system tools that could be considered to allocate these revenues efficiently in the future.

2021 Report: Decarbonization Pathways for Paraguay’s Energy Sector 

In light of the upcoming renegotiation of Annex C of the Treaty of Itaipú, the Ministry of Finance of Paraguay asked Professor Jeffrey Sachs and his team to revisit the 2013 report, with support from the Development Bank of Latin America (Banco de Desarrollo de América Latina [CAF]) and in partnership with the Sustainable Development Solutions Network (SDSN).

CCSI, the Quadracci Sustainable Engineering Lab at Columbia University, and the Centro de Recursos Naturales, Energía y Desarrollo (CRECE) authored the report “Decarbonization Pathways for Paraguay’s Energy Sector,” published by CCSI in November 2021.

The report—available below in English—integrates the results of three energy models with findings from literature review and expert interviews to provide recommendations for Paraguay to reduce greenhouse gas (GHG) emissions to meet its climate change commitments under the Paris Agreement by decarbonizing the country’s energy use sectors by 2050 through economy-wide zero-carbon electrification, massive energy efficiency gains, behavioral changes, and institutional reforms.