Climate Change: How Latin America is Paying for Global Inaction

Extreme changes to the climate are affecting Latin America, with Amazon wildfires, stronger hurricanes and greater difficulties in food access

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Bogotá — Latin America is facing its own theory of climate chaos, for while the world’s largest economies continue to miss their environmental targets, the pace of climate change is unleashing large and often unpredictable global impacts on vulnerable regions, while local inaction by governments increases the risks.

Although Latin America is responsible for only 8% of the world’s greenhouse gas emissions, its ecosystems are among the most vulnerable to the effects of climate change.

Poor practices in the agricultural sector put further pressure on the conservation of territories, while the effects of this situation are already being reflected in the productivity of a number of industries.

In an interview with Bloomberg Línea, Tatiana Cespedes, campaigns coordinator for Greenpeace Colombia, warned that “business leaders in general have had to demonstrate specific changes in production costs such as raw materials, access to energy and water use”.

The World Wildlife Fund (WWF) states that climate change is perhaps the greatest possible negative external factor in the global economy and that the most environmentally and economically vulnerable countries are those that do not have clear processes for mitigating and adapting to climate change.

Mitigating factors such as food insecurity, poverty and lack of access to decent housing place Latin America in a more complicated situation in the face of the effects that climate change may bring.

Accelerated urban growth, mostly in developing countries, has been accompanied by increased demand for transportation, public services, raw materials and products and, in general, greater pressure on natural resources and environmental goods and services.

For the WWF, this growth causes negative externalities, such as air pollution, the generation of greenhouse gases, road accidents, health problems and water pollution.

It is important for countries to have a comprehensive approach in the policies proposed in order to coordinate the different levels of government to implement a dynamic urban transformation, with growth pillars based on low carbon emissions. This is the only way to mitigate the social, environmental and economic effects of climate change.

WWF

Furthermore, the disjointed political discourse in the region has delayed climate change-mitigation actions in some of the largest economies in Latin America, so it is expected that the political shift in economies such as Brazil will be reflected in specific decisions and a more decisive voice in the continent.

The World Bank has warned that, by 2023, some 5.8 million people could fall into extreme poverty as a result of climate change, and by 2050 some 17 million people could be displaced by the impact.

Latin America and the Caribbean have climate vulnerabilities associated with certain conditions such as their geographical location, being surrounded by the Pacific and Atlantic oceans.

The World Meteorological Organization (WMO) indicates that “climate is largely influenced by prevailing sea surface temperatures and related large-scale atmosphere-ocean coupling phenomena, such as El Niño-Southern Oscillation (ENSO)”.

Greenpeace considers that coastal cities such as Rio de Janeiro are at risk from hurricanes, while cities in the Andes mountains could be at risk from flooding and landslides.

It warns that other territories located in places where different ecosystems such as wetlands used to exist are at high risk from landslides, naming cases such as Bogotá and Mexico City.

Globally, cities are responsible for 70% of greenhouse gases and consume 80% of the energy produced on the planet, according to figures compiled by WWF.

At the same time, it adds, they show high levels of atmospheric pollution with its negative collateral effects on health, intensified by climate change.

Climate-related events and their impact on Latin America and the Caribbean left more than 312,000 dead and more than 277 million people affected between 1998 and 2020 alone, according to UN figures.

Climate change and its effects on crops in Latin America

Latin America and the Caribbean face a dilemma, because while the agricultural sector accounts for 47% of emissions, above the global average, it is at the same time one of the industries that may suffer the greatest consequences from the impact of climate change.

Consulted by Bloomberg Línea in Colombia, Benjamín Quesada, a climatologist and director of the undergraduate program in Earth System Sciences at the Universidad del Rosario, stated that with increased greenhouse gas emissions, crop yields between now and 2050 will be reduced by 7% to 8% on average in the region, based on figures from the Inter-American Development Bank (IDB).

This situation could be exacerbated by an increase in pests, water shortages or nutrient depletion in crops, and which are not contemplated in these impact simulations.

“To counteract the effects, it is imperative to reduce the causes, mitigating the burning of fossil fuels and deforestation, two scourges that explain global climate change. This will reduce dependence on fuels that are becoming scarcer year after year and increase socioeconomic resilience in the long term,” Quesada said.

He added that adaptation to climate change already underway is crucial to limit losses, while the costs of inaction are substantially higher than the investments needed in climate resilience in all sectors (sustainable transport, more renewable energy matrix, less carbonized industry, etc.).

The WWF says that the increase in extreme weather events such as droughts and floods will impact crops and affect food security, which could lead to changes in the type of food that is grown due to the increase in temperature.

It warns that if we do not implement environmentally consistent land use planning, invest in eco-efficient and socially inclusive infrastructure, implement disaster prevention and early warning systems, or develop economic and regulatory instruments that promote a reduction in emissions, the economic effects could be represented with:

- A drop in a crop yields

- A rise in basic food prices

- Extreme meteorological phenomenon, which will hit hard the countries that are already vulnerable

- Water scarcity, which will become one of the most serious problems

Mixed consequences of climate change

The effects of climate change on Latin American economies may be mixed and their incidence depends on factors such as the resilience of certain crops and areas, or even more or less unfavorable economic conditions.

For climatologist Benjamín Quesada, each country has its own particularity and a different combined vulnerability.

“Changes in temperature and rainfall will not affect all crops in a similar way. Thus, by 2050, fruit trees are expected to see a 24% reduction in production, while oilseeds could increase their production by 15%,” Quesada said.

Northern Colombia could see a sharp reduction in corn and bean yields, while in Mexico other crops, such as bananas, could experience shocks.

Central American countries could face shocks in coffee production and other markets such as Ecuador and Peru in cocoa.

In Argentina, the world’s third largest soybean exporter and second largest corn exporter, climate change poses a significant risk to the country’s agricultural sector, since almost half of its land is used for agriculture.

According to the climatologist, rainfed corn and wheat will be affected, while soybeans will be maintained due to favorable changes in rainfall in the Pampas region.

Countries must begin to organize themselves in terms of adaptation to climate change. In Colombia, for example, we have a general climate change policy, but we do not have an adaptation policy. We have to start seeing a scenario in which the climate change situation is not going to improve, but on the contrary, this event is going to continue. Somehow we do not visualize a change of attitude at the company level..

Fabio Gómez Delgado, professor and researcher

Meanwhile, he believes that activities related to meat consumption could also have a negative impact.

Fabio Gómez Delgado, professor and researcher of the Department of Biology at the Faculty of Sciences of the Pontificia Universidad Javeriana, states that climate change may also affect the fishing sector due to acidification and the rise in temperature that changes the migratory pattern of commercially important consumer species.

In general terms, he considers that the effects could be felt in all those countries with coastlines due to the threats posed by tropical storms and floods, events “that are clearly being magnified by climate change”.

“But if we think about it from the Latin American point of view, all countries have an important agricultural production, we are in the first line of the economy, which is the productive one, and we depend on that productivity, such as Chile and Argentina with their wines and meats (...) obviously we are at great risk,” he said.

But other economic activities such as tourism, electricity generation, natural resource exploitation, infrastructure and construction, manufacturing industries and public health could also directly feel these effects.

Record temperatures

According to the WMO, rising temperatures have reached record levels and have increased by an average of 0.2°C per decade over the past 30 years, with extreme weather events and climate shocks worsening in the region.

And in the summer of 2022, unprecedented forest fires were recorded as a result of both extreme heat and dry soils, driving carbon dioxide emissions to 20-year highs.

As a consequence, the Brazilian state of Amazonas suffered the highest total emissions for the July to October fire season in the last 20 years (more than 22 megatons).

Recently, images of the low water levels of the Panama Canal as a result of the drought that is hitting it also went viral, and which could have serious repercussions on the economy of that country, since it generates a quarter of the money that enters the Government. The effects are already being felt in Panamanian bonds, which reached their lowest level of the year.

Canal authorities have restricted the number of ships that can cross the canal to 32 per day (the norm is 38 ships per day) with a drop of some $200 million in canal revenues, which last year totaled $4.3 billion, expected.

The Intergovernmental Panel on Climate Change (IPCC) has identified Latin America and the Caribbean as a region “highly exposed to, vulnerable to and greatly impacted by climate change”.

The environmental organization Greenpeace has identified five key factors that could actively contribute to the current climate crisis:

  • The excessive use of fossil fuels
  • Deforestation and forest fires
  • Emissions from cities
  • Overconsumption of resourcea
  • Use of plastics

Therefore, the WWF believes that a transformation of all economic sectors is required to accelerate this transition, since global financial flows are between 3 and 6 times below what is needed for 2030.

And the biggest gap is in developing countries and in the agriculture, livestock, forestry and other land-use sectors, “where many of the actions needed for the region fall”.

“Limiting global warming to 1.5ºC by the end of the century is still possible, but requires transformational change,” according to the WWF.

Climate change would postpone LatAm’s economic goals

Tatiana Céspedes of Greenpeace Colombia warns that the climate crisis is exacerbating conditions of poverty and inequality, to the point that it threatens to destroy much of the progress achieved in previous decades.

According to figures from the Food and Agriculture Organization of the United Nations (FAO), 6.5% of the population of Latin America and the Caribbean suffers from hunger. Even so, moderate or severe food insecurity decreased from 40.3% in 2021 to 37.5% in 2022.

The Inter-American Development Bank (IDB) warns in a report that by the end of the century the gap between the GDP per capita of the richest and poorest countries in Latin America and the Caribbean will widen as a result of climate change and natural disasters.

Climate change could also aggravate housing deficit conditions in the region, according to Habitat for Humanity.

It is estimated that more than half of the 1.8 billion people currently without adequate shelter worldwide live in informal settlements, which are highly vulnerable to climate shocks.

Habitat for Humanity associates part of the effect to the accelerated growth of cities and the lack of preparedness of territories to risks.

Tatiana Céspedes, of Greenpeace Colombia, warns that the climate crisis is exacerbating conditions of poverty and inequality, to the point that it threatens to destroy much of the progress achieved in previous decades.

In Latin America and the Caribbean “approximately 82% of the population lives in urban areas and 47% of the population in Latin America has a housing deficit, mostly qualitative,” said Ernesto Castro, Area Vice President for Latin America and the Caribbean, Habitat for Humanity International.

Therefore, it is imperative that the region make a concerted effort to design policies that promote sustainability and inclusive growth to mitigate the problem of hunger and poverty in the face of climate change.

Fabio Gómez Delgado, of the Universidad Javeriana in Colombia, stresses that the possibility of achieving the initial economic and social development goals in an environment of climate change cannot be seen in a very positive light, so countries that are not prepared would have to reevaluate them and find other strategies.

The World Bank, for example, believes that it is key for the region to promote green growth and more resilient cities, while enabling vulnerable populations to adapt to climate change.

It is also considered essential to decarbonize power generation, transportation systems and manufacturing, an area in which Latin America has taken important steps, but further efforts will be required to see results.

Between 2015 and 2020 renewable energy capacity in Latin America increased by a significant 33%. Already by 2021, 58% of electricity generation in the region was projected to come from renewable sources.

However, Latin America and the Caribbean will need to accelerate in that direction by harnessing hydroelectric potential, as well as untapped solar and wind resources, while electricity demand could grow by 48% by 2030.

“If we fail to limit climate change to 2°C, overcoming poverty and hunger will be much more difficult. In fact, investing in climate change mitigation and adaptation has benefits over all other sustainable development goals. Climate change is a machine of injustice: the countries that are least responsible for climate change will have the greatest impacts, and the already most vulnerable populations will suffer a disproportionate impact,” laments climate scientist Quesada.

According to the Economic Commission for Latin America and the Caribbean’s (ECLAC) aggregate estimates of the economic costs of climate change in the region, related to a 2.5°C temperature increase (most likely around 2050), range from 1.5% to 5% of the countries’ GDP.