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When water and climate converge

In Latin America, water is more tightly linked to human potential and economic competitiveness than in any other part of the world. The region has roughly 31 percent of the planet´s freshwater resources, while holding only 8 percent of its population. This huge water advantage enables Latin America to get a 68 percent of all its electricity from hydroelectric sources, compared to a global average of less than 16 percent.

The region’s key commodity exports—in agriculture and mining—depend on extraordinary quantities of water. Around half the world´s beef exports, and nearly two thirds of all soya, now come Latin America, where they are produced cheaply thanks to abundant rain.
 
But in recent years severe droughts have turned this water advantage into a stark vulnerability. In 2008 Argentina lost 1.5 million head of cattle and nearly half its wheat crop to drought, while hydroelectric output in the most populous part of Chile plunged by 34 percent.

In 2009 and the first few months of 2010, major cities in Venezuela, Ecuador, Colombia, Paraguay and Mexico were forced to ration water, cut power, or both.  These strains deepen the gap between people with in-home water connection and the millions of poor Latin Americans who must resort to unregulated water vendors or expensive bottled water.

The latest droughts are believed to stem from cyclical weather phenomena such as El Niño. But they are also an omen, because climate scientists agree that extreme fluctuations in rainfall will be among the first and most dramatic consequences of rising temperatures in Latin America.
 
In fact, there is a growing consensus in Latin America that water can no longer be treated as a free and limitless commodity, and that changes in water supplies may be the first and most disruptive consequences of climate change.

Signs of this shift can be seen in the demand for more detailed, local-level estimates of the potential impact of climate change. Over the past two years Mexico, Brazil and Chile have sought assistance from the IDB, the United Nations and Great Britain to carry out the first country-level studies of the economic impact of climate change in the region. Similar studies are now underway in Colombia, Peru, Bolivia, Ecuador and most Caribbean and Central American countries.
 
As these studies are completed, governments can begin to anticipate how various climate change scenarios could affect regions within their territories, and to determine how individual industries and populations may need to adapt.

In some cases, adaptation may mean building new infrastructure to redirect water from places where it abounds to those that are increasingly dry. In Peru, for example, the IDB is underwriting a project to divert water from a small mountain river that currently drains into the water-rich Amazon basin. A percentage of the river’s water will instead flow to the country’s dry Pacific coastal region, where it will be used to irrigate up to 150,000 hectares, generate hydroelectricity, and meet the needs of local communities.

In other cases, adaptation may require a shift to smarter water use in existing agricultural sectors. Latin American farmers have only begun to apply technologies such as drip irrigation that enable producers to get “more crop per drop.” Some specialists estimate that the region could easily double its total food output—using the same amount of water—by investing in efficient irrigation systems.

For the cities where 80 percent of Latin America’s population lives, adaptation is likely to mean prioritizing investments and reforms in public utilities in order to reduce waste, close the coverage gap, and eliminate water-borne diseases among the poor.
 
In 2009, the IDB approved a record $1.8 billion in loans for these kinds of projects throughout the region. Between 2006 and 2011, the Bank will have approved nearly $6 billion in this sector. This reflects the fact the governments in the Americas are making a renewed effort to tackle water and sanitation problems.

But if they are to adopt a truly strategic approach to protecting their water wealth, Latin American governments will also need to make concessions in pursuit of global emissions reductions that could reduce the risk of water crises in the decades ahead.

In the months leading up to the next U.N. Climate Change Conference, to be held in Cancún, Mexico, this November, governments will attempt to reconcile some of the conflicting priorities that prevented the emergence of a binding climate deal in Copenhagen last December. The challenge will be to show how the abstract risks of climate change are connected to the tangible imperatives of health, food, education, jobs and safety—particularly in countries where millions of people still don’t have these essentials.
 
For Cancún to be more successful than Copenhagen, industrialized countries that are prioritizing emission reductions and clean energy will need to persuade people in the developing world that these goals are important as expanding access to basic services today.  Developing nations, for their part, will have to show that they are willing to share in the sacrifices necessary to lower the risk of catastrophic climate change in the long-term.
 
In a major multimedia presentation delivered in Mexico City last November, IDB President Luis Alberto Moreno explained how the intersection of water and climate offers a way to simultaneously address many of these concerns. In recent opinion articles published in the Los Angeles Times,  Mexico’s Reforma, and Spain’s ,El Mundo Moreno also argued that international assistance that helps to solve near-term water needs of Latin American and Caribbean communities may make it easier to reach a more ambitious climate accord over time.