Green Finance and the Wall Street Consensus: ESG Bond Markets in Argentina and Brazil

Abstract

Latin American and Caribbean (LAC) countries play a pivotal role in the global environmental debate. The region, known for its exceptional biodiversity, abundant freshwater reserves, and Amazon rainforest, is critical for achieving global environmental objectives. Although LAC contributes to only 10 per cent of the global greenhouse gas (GHG) emissions, its geographic location and socioeconomic conditions make it highly vulnerable to climate change. This vulnerability creates a stark asymmetry: while highincome groups within the region are disproportionately responsible for emissions, the low-income, vulnerable population suffers the greatest impacts of climate change (ECLAC, 2024). Argentina and Brazil, the two key economies in MERCOSUR, exemplify these dynamics and offer valuable insights for this study. Throughout the 21st century, both nations have faced recurring political and economic crises that underscore the interconnected social, external, and environmental challenges that they must address. The three-gap model—social, external, and environmental—proposed by Gramkow and Porcile (2022) provides a useful framework for understanding the complex dynamics these countries face.