10 key points on climate change impacts, opportunities and priorities for Latin America and the Caribbean

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Guna Yala, Panama Guna Yala, Panama

As we celebrate the International Earth Day, the challenges of climate change are foremost on our minds.  What does climate change mean for Latin America and Caribbean (LAC)? Here is our quick guide to the 10 Key Points on Climate Change Impacts, Opportunities, and Priorities for LAC and the planet.

#1: LAC contributes about 10% of global GHG emissions.

The region contributed 10% of global greenhouse gas (GHG) emissions in 2018, with its contributions growing from only 5.5% in 2000 . Both Mexico and Brazil are among the top 20 emitters in the world, though they represent only 1.33% of global emissions each. 

#2:  GHG Emissions in LAC are mostly from land use change and agriculture.

The main sources of GHG emissions are from land-use, land-use change and forestry (35%) and agriculture (23%). Despite the importance of the Amazon as a carbon sink, soaking up 5% of global emissions, a total of 11,088 sq km of the forest were lost through deforestation and fires from August 2019 to July 2020 . Transport and energy together account for another 20% of emissions. This is different than at the global level, where energy accounts for a much larger part of GHG emissions. While LAC has a relatively green energy generation matrix overall, Mexico, Central America and many Caribbean states still rely heavily on fossil fuels, and others, like Brazil, are at risk of seeing renewable shares slip as climate change makes hydro generation less reliable.

#3: LAC is highly vulnerable to increasing climate variability and extremes due to climate change. 

Heat extremes and changing precipitation patterns are impacting cities, agricultural productivity, hydrological regimes and biodiversity. Warmer oceans threaten the region’s fishing and tourism industries, as in the Caribbean where 80% of the coral reef cover has been lost in recent years. Andean glaciers shrank by nearly a third from 2000 to 2016, melting faster than in any other mountain region in the world . This has resulted in a loss of a major source of freshwater for consumption, irrigation and hydro power.  By 2050, coastal flooding due to sea level rise could generate about $940 million to $1.2 billion of mean annual losses in the 22 largest coastal cities in LAC.

#4: Climate change-related disasters are increasing in frequency and intensity.

2020 was the second second-hottest year for South America and the Carribean after 2014, according to NOAA.  The hurricane season of 2020 broke all records with two major hurricanes hitting Central America in less than two weeks, causing tens of billions of dollars in damages to homes, power lines, and workplaces during a time of overlapping economic and social crises.

#5: Climate Change could push three million people a year into extreme poverty by 2030. 

Every year on average, between 150,000 and 2.1 million people are pushed into extreme poverty, in the region, because of disasters . Food and nutrition security could be severely impacted, with projected reduction of around 20% of crop yields for beans and maize in Central America and in the Caribbean by 2050. 

#6: Climate change is already having major impacts on growth in LAC.   

On average, about 1.7 % of GDP is lost each year due to climate related disasters. Several countries are experiencing deeper, longer droughts and intensified storms and floods that are disrupting economic activities and affecting livelihoods. In Uruguay, for example, climate-related shocks have become more frequent and intense. The 2017-18 droughts and related crop and livestock losses cost about 0.8% of GDP in 2018 alone. 

#7: Many countries in LAC are committed to the Paris Agreement.

Chile, Costa Rica, Jamaica and others have set out ambitious climate change plans to move to greener, carbon neutral economies by 2050  and build resilience to adapt to the impacts of climate change. Colombia and Argentina recently expanded their commitments to achieve net zero decarbonization by 2050.

#8: Green growth presents opportunities for LAC economies.

By 2030, changes in production and consumption necessary to be on track for full decarbonization could result in 15 million more jobs in LAC , compared with a business-as-usual.  The region has mineral resources central to the decarbonization agenda (for example lithium), and it can reform sectors like forestry, fishery, and aquaculture – managed sustainably, they too can deliver more growth. Climate-friendly agricultural products have enormous potential in export markets and could be a significant source of new jobs. At the same time, ensuring climate-friendly practices for exported products will reduce the risk of trade barriers such as tariffs imposed on firms that operate under less climate-friendly practices.

#9: LAC Cities will have to transform themselves into green and productive hubs.

With more than 80% of population living in urban areas, cities in the region will have to transform into green and productive hubs to reduce congestion, heat-stress, water and air pollution, expand green space and reduce energy consumption in buildings. Low-carbon public transport would reduce congestion, pollution and raise productivity. Urban planning and design will help create compact cities; nature-based solutions – such as mangrove forests to protect against wave energy – will help communities adapt to climate change impacts. 

#10: Transition to a low-carbon, resilient economy is an opportunity for inclusive development.

Focusing on efforts to reduce emissions from forest degradation and deforestion will open opporutnities for the region‘s rural population and forest-dependent Indigenous Peoples.  Boosting resilience will help the most vulnerable who bear a larger brunt of climate impacts. And efforts to assure the move to low carbon growth is just, with attention to who looses and who gains, will be a critical for fairness and sustainability.  

Both the pandemic and climate crises have magnified exisiting inequities and exclusion in the region. As part of recover from the COVID-19 crisis, climate action can help create better livelihoods and economic opportunities for the poorest and excluded populations 

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Anna Wellenstein

Regional Director, East Asia and Pacific, Sustainable Development Practice Group, World Bank

Valerie Hickey

Global Director for Environment, Natural Resources and Blue Economy (ENB) at the World Bank

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