The Economics of Climate Change: Challenges Facing Latin America and the Caribbean

By Geovanny Vicente, Guest Blogger
Latin America and the Caribbean contribute barely 9 percent of air pollutant emissions globally, according to data from the Economic Commission of Latin America and the Caribbean (ECLAC).  However, Central America and the Caribbean are considerably vulnerable to the impact of climate change. The region has begun to feel the direct effects of climate change and is threatened by the resurgence of diseases that were already considered eradicated, as well as the prevalence of other tropical diseases such as dengue and malaria.

Climate change also significantly impacts the region’s economic trajectory. While the world continues to work toward eradicating poverty, we must ensure that the agricultural production of Latin America is not unduly affected by harmful emissions. On the occasion of the International Day for the Eradication of Poverty, I asked the former Prime Minister of New Zealand, Helen Clark, how to end this problem. Clark, through her official Twitter account @HelenClarkNZ replied, “Use of cash transfers, job creation and free education.” To that equation of three, I would add investing in food security—a critical source of future growth for Latin America. The region plays a large role in securing global food security due to the vast expanse of arable land and water—a quarter of the agricultural land on the planet and a third of global sources of fresh water.

International organizations have long advocated for the need to act immediately to reduce the effects of pollutants on the planet. The effect generated by emissions is already causing higher temperatures, colder winters and hotter summers, floods, droughts, hurricanes of unpredictable and more dangerous trajectories, as well as the disappearance of some beaches.

According to ECLAC data for 2014, if the temperature increases by 2.5 degrees Celsius compared to the historical average, the economic burden of climate change could represent between 1.5 percent and 5 percent of GDP in Latin American and the Caribbean. However, the costs generated by adaptation measures to climate change could represent below 0.5 percent of the region’s GDP. Thus, preventing the costly risks that rising emissions present makes good economic sense. With the knowledge of these data, a greater investment in renewable energies and sustainable infrastructure is urgently needed, together with the fulfillment of the commitment assumed in the Paris Agreement for a sustainable development model.

Climate change presents a crosscutting challenge to all 17 Sustainable Development Goals (SDGs) established by the United Nations; insufficient action to combat the negative impact jeopardizes the achievement of the proposed 2030 Agenda. Sustainable Development Goal #13 calls for action to help the environment, while SDG #6 calls for clean water and universal sanitary best practices.  Similarly, SDG #7 urges investment in affordable and clean energy, while SDG #9 advocates for innovation and infrastructure, and SDG #12 promotes responsible production and consumption. The Paris Agreement provides an excellent model and lesson learned related to the 17th, and final, SDG: without a strategic alliance, it is impossible to achieve the 16 previous objectives.

In Fiji, within the framework of COP23, the name of the United Nations Conference on Climate Change 2017 (UNFCCC), an initiative was launched that will provide resources and technical assistance to small, developing islands. This is an alliance between the World Health Organization (WHO), the COP23 and the UNFCCC.  The Director General of WHO, Dr. Tedros Adhanom, indicated that, “they are launching the initiative for these small, developing islands because they are the ones that will disproportionately bear the burden of climate change.” The objective is for these islands to learn to understand, manage, and prevent the negative effects on health and the economy.  Islands such as Puerto Rico and Dominica are prime examples of the region’s vulnerability to natural phenomena, such as hurricanes, which have massively disrupted the economies of both islands.

More international and regional programs, such as the UNFCCC, focused on developing local solutions to shared challenges that multiple countries face can help effectively pool resources to invest in new technologies that will mitigate the long and short-term economic impact of climate change on Latin America and the Caribbean.



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