Stranded assets in Latin American agriculture: risks, vulnerabilities and implications

Abstract

We examine the risk associated with stranded assets in Latin American and Caribbean agriculture, defined as physical, natural or knowledge assets that experience premature loss of value due to environmental, economic or regulatory pressures. By implementing the XLRM model as an analytical framework, we explore how the interaction between climate change and market globalization generates a “double exposure” that puts the sustainability of agricultural systems at risk.  Both progressive and abrupt transformation trajectories are recognized, associated with environmental degradation, technological obsolescence and regulatory changes at the international level. It is stressed that this vulnerability is particularly critical in regions characterized by high inequality, low investment in agricultural public goods and limited institutional capacity. It is suggested that policies be implemented to strengthen resilience through investments in public goods, climate finance, adaptive governance mechanisms and climate-sensitive accounting schemes.  It also stresses the imperative of implementing polycentric and inclusive governance that takes into account the diversity of actors and territories. The document concludes that the anticipation and mitigation of stranded asset risk transcends mere technical necessity, becoming a strategic priority of public policies in the region.