Uruguay is one of the countries with the highest human development in the Latin America and the Caribbean region, achieved through decades of political and economic stability and strong democratic institutions.
However, climate change is threatening Uruguay’s progress towards sustainable development, severely impacting communities and economic activities, from fishing and agriculture to energy production and tourism. This is evident across the country’s 670 km coastline, where around 70 percent of the population—over 2 million people—live. These areas generate more than 40 percent of national wealth through activities like tourism and fishing and now are under threat from rising sea levels, which have already increased by 11 cm in Montevideo, the capital. Worryingly, scientific projections show that sea level rise could reach 80 cm by the end of the century without a drastic reduction in global greenhouse gas emissions.
Climate impacts are also undermining the country’s agricultural and livestock sectors, which are key to Uruguay’s economy and have been affected by increasingly intense and frequent droughts. The 2021-2023 drought caused losses in the agricultural sector that were estimated at nearly 3 percent of GDP, while also disrupting drinking water quality and electricity generation. The water crisis affected the Santa Lucía River basin, which supplies more than 60 percent of the country’s population with water, deepening pre-existing inequalities, with women and rural populations experiencing greater impacts.
In this increasingly challenging context, Uruguay has committed to taking decisive action to mitigate climate change and adapt to its impacts, while safeguarding development gains. In 2009, the Government established a National Climate Change Response System, which has been leading on climate policymaking ever since. In parallel, national energy policies led by the Ministry of Industry, Energy and Mining have guided the sustainable energy transition and the expansion and diversification of renewable sources of electricity. The inclusion of women, young people and rural communities has been at the core of national priorities, ensuring the country’s development strategy responds to the needs and priorities of different groups.
Uruguay is one of the countries with the highest human development in the Latin America and the Caribbean region, achieved through decades of political and economic stability. Photo: UNDP Uruguay
More than 40 percent of national wealth comes from coastal zones through activities like tourism and fishing which are now under threat from rising sea levels and other climate change impacts. Photo: UNDP Uruguay
Building the climate policy architecture
To align its national efforts with the goals of the Paris Agreement, in 2016, Uruguay established its National Policy on Climate Change. Under this long-term, strategic framework, Uruguay developed its Nationally Determined Contribution (NDC) and was one of the first countries to submit its third-generation NDC, in November 2024. This ambitious NDC includes an economy-wide absolute emission cap by 2035. The plan also sets specific targets for emissions reductions in the agricultural and livestock sectors and for conserving or increasing carbon stocks related to land use and forestry.
Under Climate Promise 2025, the UN System supported the Government of Uruguay in shaping and developing its latest NDC, offering expertise on key issues such as circular economy, climate finance, energy, inclusion, just transition, transparency and net-zero pathways. UNDP led coordination efforts, while also assisting the government to mainstream gender equality and social inclusion across sectoral climate policies and align climate action with biodiversity conservation, converging with the country’s National Biodiversity Strategy and Action Plan (NBSAP).
Importantly, UNDP supported Uruguay to transparently assess its progress towards achieving climate goals by establishing robust measurement, reporting and verification (MRV) systems that include an NDC progress tracker and a greenhouse gas emissions inventory tracker. This enabled the country to submit its first Biennial Transparency Report, demonstrating reductions in emissions intensity for all greenhouse gases and outlining the progress the country has made on its mitigation and adaptation targets.
Uruguay was one of the first countries to submit its third-generation NDC, in November 2024. This ambitious NDC includes an economy-wide absolute emission cap by 2035. Photo: UNDP Uruguay.
The latest NDC also sets specific targets for emissions reductions in the agricultural and livestock sectors and for conserving or increasing carbon stocks related to land use and forestry. Photo: UNDP Uruguay
Investing in the sustainable energy transition
Uruguay is widely recognized as one of the world's most successful examples of a rapid transition of its electricity matrix. In a little more than a decade, the country moved from heavy dependence on imported fossil fuels to a power system that generates approximately 98 percent of its electricity from renewable sources, primarily wind, hydropower, biomass and solar. This transition was driven by a long-term national vision, strong political consensus across successive governments, and stable regulatory frameworks that attracted significant private investment.
With support from UNDP and funding from the Global Environment Facility (GEF), the government put in place a series of regulatory policies to foster investments in renewable sources that contributed to increasing the country’s installed capacity in wind, solar and biomass. Today, these energy sources represent around half of Uruguay’s electricity generation and contributed to doubling the total electricity generation capacity of the country.
However, while Uruguay has achieved remarkable progress on renewable energy generation, fossil fuels still represent a significant proportion of final energy consumption in the country. Around 37 percent of energy that is consumed by individuals and industries for heating, cooling, cooking, transport and lights, among other uses, derive from oil products. Uruguay is now focusing on carrying out its second energy transition to reduce emissions from energy consumption and decarbonize hard-to-abate sectors, such as cement production, shipping and aviation.
Transport accounts for nearly 60 percent of energy-related emissions in the country. In 2017, the government launched Movés, an initiative supported by UNDP and funded by GEF to promote low-carbon, efficient and inclusive transport systems. Through regulatory and fiscal adjustments, technology testing and cultural behaviour change, Movés promoted public transport, active mobility—such as cycling and walking—and more sustainable private and public vehicles. Under the project, 33 electric buses were deployed in Montevideo, avoiding 278.9 kt of carbon dioxide emissions annually.
Movés also helped repurpose fossil fuel subsidies to support the transition to sustainable transport and facilitated the testing of electric vehicles, helping to promote their benefits and contribute to their uptake. In parallel, the project helped develop vehicle energy efficiency labeling regulations, allowing consumers to choose between several vehicle options, promoting more energy-efficient and environmentally friendly consumption.
Beyond technology adoption, Movés carried out assessments to measure and improve the quality of public transport services, particularly to ensure they were inclusive. A guide for incorporating inclusive sustainable mobility in urban planning was provided to all local governments and tested in two pilot projects in the municipalities of Ciudad de la Costa and San José. These pilots worked to solve mobility challenges for children and young people and their families. Additionally, through the Pledge to Impact programme, UNDP supported Uruguay to assess gender gaps in its transition to sustainable transport, resulting in recommendations to ensure that women can access the jobs and opportunities created.
The government has worked to promote low-carbon, efficient and inclusive transport systems. Under the Moves project, 33 electric buses were deployed in Montevideo, avoiding 278.9 kt of carbon dioxide emissions annually. Photo: UNDP Uruguay
Movés carried out assessments to measure and improve the quality of public transport services, particularly to ensure they were inclusive. Photo: Movés / Rodrigo Razquin
In Ciudad de la Costa and San José, pilot projects worked to solve mobility challenges for children and young people and their families. Photo: Movés / Rodrigo Razquin
Helping communities adapt to the impacts of climate change
Coastal and riverside communities in Uruguay are particularly vulnerable to droughts and floods. During El Niño years, river overflow from more intense rains and storms displaces communities and affects agricultural livelihoods as land availability for crops and cattle reduces. Meanwhile, during periods of droughts, communities struggle to access drinking water, for both humans and livestock, and to irrigate crops.
To address its specific vulnerabilities to climate change impacts, Uruguay developed sectoral National Adaptation Plans (NAPs). In 2019, with support from UNDP and FAO through the NAP-Ag programme, Uruguay developed a NAP for agriculture and livestock, a key sector for the country’s economy. Similarly, with funding from the Green Climate Fund (GCF), UNDP provided support to Uruguay in developing its NAP for cities and infrastructure, as 93 percent of the population lives in urban areas. The country also developed NAPs for coasts and energy and is currently working on a NAP for the health sector.
On the ground, through a binational initiative between Uruguay and Argentina funded by the Adaptation Fund, UNDP has helped build community-led resilience along the Uruguay River. The project focused on strengthening territorial planning and disaster risk reduction, promoting resilient infrastructure in flood-prone preserved areas. Recognizing the importance of building government capacity to respond to climate impacts, UNDP is also training civil servants on climate change adaptation through a gender-inclusive and human rights-centered approach.
As some groups and communities are more vulnerable to climate change impacts than others, UNDP is supporting afro-descendant women to strengthen their climate resilience, offering trainings on the use of meteorological information which help them combine official meteorological data and early warnings with their own knowledge of their territories.
Coastal and riverside communities in Uruguay are particularly vulnerable to droughts and floods. Photo: UNDP Uruguay
UNDP has supported strengthening territorial planning and disaster risk reduction, promoting resilient infrastructure in flood-prone preserved areas. Photo: UNDP Uruguay
Placing inclusion at the core of climate action
As in many countries around the world, climate change impacts men and women in Uruguay differently due to existing structural inequalities. Women have historically been responsible for providing their households and communities with food, water and energy. Yet, they are not fairly remunerated for their work and have less access to productive resources, limiting their capacity to adapt to climate change and amplifying their vulnerability to its impacts. A recent survey highlights that women report higher impacts on their lives than men. At the same time, women are drivers of climate solutions and play a key role in the response to the crisis.
The new NDC underscores Uruguay’s continued commitment to promote gender equality, social inclusion and just transition, ensuring alignment with the sustainable development agenda. With UNDP’s support, Uruguay developed its forthcoming Gender and Climate Change Action Plan 2026-2030, which makes gender a crosscutting issue in the implementation of its National Policy on Climate Change. As part of this process, UNDP supported the elaboration of a guide on gender and climate change to help subnational governments, public institutions and civil society organizations recognize the role of women as agents of change. With funding from GCF, UNDP is supporting the implementation of the plan, including through territorial dialogues that help integrate priorities from communities across the country into climate policy.
In the agricultural sector, UNDP supports the Ministry of Livestock, Agriculture and Fisheries in implementing its Gender Policy Action Plan 2025-2029 and in integrating gender into the costing of the sector’s NDC measures, including through workshops with rural women and agricultural extension technicians.
Climate change also disproportionally affects young people, who will face the worst consequences of the crisis and therefore need to be meaningfully included in decision-making processes that impact their future. In Uruguay, Acción Climática Joven was created by UNDP, UNICEF and the Ministry of Environment to raise awareness about climate change and empower young people to get involved in climate action. As part of these efforts, Accion Climática Joven worked with youth centres to provide skills and trainings on climate change and environmental issues, giving them a platform to express their concerns and ideas, and acting as a bridge between young people and policymakers. It has also fostered the participation of youth in coastal adaptation measures and the implementation of the National Adaptation Plan. In addition, Uruguay is currently developing its National Strategy on Teenagers, Youth and Climate Change through a participatory process that gathers the voices of youth across the country, in partnership with UNDP and UNICEF.
In Uruguay, women report higher impacts on their lives than men. At the same time, women are drivers of climate solutions and play a key role in the response to the crisis. Photo: UNDP Uruguay
UNDP supported the elaboration of a guide on gender and climate change to help subnational governments, public institutions and civil society organizations recognize the role of women as agents of change. Photo: UNDP Uruguay
Acción Climática Joven worked with youth centres to provide skills and trainings on climate change and environmental issues, and giving them a platform to express their concerns and ideas. Photo: UNDP Uruguay
Mobilizing climate finance
In 2022, Uruguay became the second country in the world, after Chile, to issue Sovereign Sustainability-Linked Bonds. The key performance indicators (KPIs) of the Bond are tied to a 50 percent reduction in emissions per real GDP unit relative to the reference year of 1990 and the conservation of 100 percent of native forest area relative to the reference year of 2012. In this way, the Bond serves as a mechanism to direct finance towards achieving NDC targets.
To ensure transparency and accountability, the Government of Uruguay requested UNDP to fulfill the role of external verifier of the KPIs. UNDP has conducted thorough verifications processes for the four annual reports tracking the Bond’s KPIs published by the government to date. By 2024, the country had recorded a 48 percent reduction in emissions and had achieved full maintenance of native forest areas.
In another climate finance innovation, in 2023, Uruguay was the first country to obtain a $350 million World Bank loan with climate action incentives. Under the framework of this loan, interest rates are reduced if the country reduces the intensity of methane emissions from livestock production.
Since 2024, UNDP has been working with the Ministry of Environment, the Ministry of Economy and Finance and the Central Bank of Uruguay to strengthen the capacities of the public and private sectors to increase financial flows towards climate and nature goals. This GCF-funded initiative developed a climate finance mapping to identify domestic and international climate finance instruments. By compiling economic assessments of NDC and NAP measures, this work helped to determine which measures have cost estimations and investment needs indicated and to identify where information gaps remain. The initiative also focused on assessing gender gaps in priority NDC measures for the energy and agricultural sectors, providing recommendations for integrating gender equality in energy transition financing instruments. In addition, a course on climate finance for sustainable development, developed in partnership with the Sustainable University Network, aims to strengthen the capacity of the finance system, businesses and public sector to mobilize resources towards climate action.
In 2022, Uruguay issued Sovereign Sustainability-Linked Bonds. The key performance indicators are tied to a 50 percent reduction in emissions per real GDP unit and the conservation of 100 percent of native forest area. Photo: UNDP Uruguay
UNDP supported economic assessments of NDC and NAP measures, including the identification of gender gaps for the energy and agricultural sector and recommendations for integrating gender equality in energy transition financing instruments. Photo: UNDP Uruguay / Pablo La Rosa
A circular economy for sustainable production and consumption practices
In recent years, Uruguay has fostered circular economy approaches to promote social transformation and contribute to climate and development goals. In 2024, Uruguay presented its National Circular Economy Strategy, developed with support from ECLAC, UNIDO and UNDP. With funding from the GEF, UNDP now supports the country to promote circular business models and waste reduction, as well as the prevention of food loss and waste.
In this framework, the initiative Circulab, led by CEMPRE with UNDP support, promotes circular economy approaches within Uruguayan companies. Through technical trainings and exchanges, Circulab works with companies and with recycling and waste management cooperatives—a key link in the value chain—to strengthen their ties and integrate circular economy tools into their operating strategies. Together with the Ministry of Social Development, the initiative works closely with women from the cooperatives, making their role more visible and promoting actions on recognition, autonomy, care, rights and equity.
What climate action means for Uruguay's future
As a small country with important water and coastal resources, great potential for renewable energies and an economy heavily reliant on agricultural production, Uruguay’s sustainable development is inextricably linked to climate action.
The country’s NDC is a plan to further transition its agricultural, industrial and transport sectors towards low-carbon, efficient and sustainable production and consumption systems, while protecting infrastructure, livelihoods and people from climate change impacts. However, translating this plan into action requires partners that support the country’s vision to build an economy powered by renewable energy and sustainable mobility, and through a just transition that creates decent jobs for all, particularly women and young people.
By advancing this vision, Uruguay recognizes that climate action is an opportunity to invest in a future where low-carbon economies and societies can flourish and communities can thrive while protected from climate change impacts.