Financial Sustainability and Transition to Green Economies in Ecuador.
DOI:
https://doi.org/10.70577/asce.v5i1.676Keywords:
Sustainable Development, Green Economy, Environmental Finance, Economic Policy, Energy Transition, Environmental Planning.Abstract
The objective was to analyze Ecuador’s financial sustainability and its real capacity to transition toward a green economy within a context characterized by structural fiscal deficits, high dependence on extractive activities, and elevated country risk, factors that increase the cost of accessing green financing and constrain long-term environmental investment. From a public finance perspective, the study addresses the tension between macrofiscal stability and the allocation of resources to green projects, considering the State’s intertemporal budget constraint. A qualitative documentary approach was applied, based on a systematic review of scientific, regulatory, and institutional literature covering the period 2001–2025, complemented by bibliometric analysis and regional comparative assessment. The results indicate that, although the country has implemented instruments such as sovereign green bonds, debt-for-nature swaps, and ESG guidelines, these mechanisms operate in isolation and are not fully integrated into fiscal planning or into a sustainable financial consolidation strategy. The volatility of extractive revenues, the limited tax base, and the high cost of external financing restrict the ability to scale up green investment without compromising fiscal balance. It is concluded that the transition toward a green economy in Ecuador requires reconciling fiscal discipline with environmental investment through a coherent financial architecture that combines environmental tax reform, improved quality of public expenditure, reduction of sovereign risk, and institutional strengthening, so that environmental sustainability does not rely solely on isolated financial instruments but rather on an integrated macroeconomic strategy.
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