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Climate change in Latin America and the Caribbean: A Priority Task for IDB Action

The purpose of this institutional article is to provide information about the actions and approach that the Inter-American Development Bank (IDB) has adopted to support Latin American & Caribbean (LAC) countries to face the challenges posed by climate change. The main effects of this phenomenon on the region´s countries are described. The last section discusses the expectations raised by the 16th Conference of the Parties (COP 16) toward a global climate change agreement, which is to be held in Cancun, Mexico, next November *.

Global Climate Change and its Effects on LAC

The Fourth Assessment Report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) concluded that global warming of the climate system is unequivocal. As evidence of this, it stressed climbing average world air and sea temperatures, widespread thawing of snowfields and glaciers, and rising average of world sea levels. Numerous detailed observations around the planet -continental and oceanic- show ecosystems being deeply affected by various kinds of climate disturbances, especially rising temperatures.

Developing countries (DGCs) are experiencing the worst conditions when it comes to dealing with climatic variations. They and their communities are in a vulnerable state, which time and inaction tend to exacerbate. The outlook for LAC countries, in particular, is bleak, as they will have to confront increasingly severe consequences in various areas in the absence of global, regional, and national actions to tackle climate change. Such consequences include:

A significant reduction of agricultural productivity in the most vulnerable areas, with extremely negative effects on food security.
Changes in the quality, quantity, and availability of water for human, animal, and agricultural consumption, and electricity generation. As an indicator, it is estimated that 77 million people will face water shortages by 2020 as a result of the disappearance of the tropical Andean glaciers. This also entails adverse changes in the electricity sector, as it will force the use of dirty energy sources (coal and oil) instead of the hydroelectric sources that have so far dominated in several countries in the region (over 50% of Ecuador’s energy supply, over 70% in Bolivia, and 68% in Peru).
Damage in coastal areas caused by an estimated 1-5 meter rise in sea levels, leading to an economic crash between 0.4% and 1.0% of the region’s Gross Domestic Product (GDP).
Permanent negative effects on marine fauna, including corals that will seriously affect production and tourism. It is estimated that, by 2053, climate change will cumulatively have cost the Caribbean subregion between US$0.4 and US$2 billion. In the same subregion, the annual income from fishing may be affected by as much as US$140 million from 2015.
Significant losses of biodiversity with disastrous effects on the region’s countries in various economic sectors, especially, tourism.
It is estimated that the increase in the frequency and intensity of natural disasters will involve a 0.6% reduction in per capita GDP in the countries affected.
Some studies suggest that a 2°C-3°C rise in the planet’s average temperature will lead to a loss between 20% and 80% of the Amazon rainforest, thus accentuating the problems of desertification in the region.
In 1970-2008, disasters caused by climate change (storms, floods, droughts, forest fires, extreme temperatures, and health) cost LAC countries US$81.4 billion a year.

Although LAC countries’ contribution to the concentration of greenhouse gases (GHGs) is less than 12% of the world total, there is no doubt they are experiencing more negative effects, such as those detailed above, a list that is by no means exhaustive. What is more, in the absence of global, regional, and national actions to climate change, the damage will be worse in the region’s countries and the negative effects in economic terms will be even more acute.

[*] The Sustainable Energy and Climate Change Unit of the Inter-American Development Bank (IDB), managed by Juan Pablo Bonilla,provided the material for this note.
Supporting bibliography available in PFD version