Climate change could subtract up to 5% from Latin American GDP

Climate change could subtract up to 5% from Latin American GDP

By Amaia Ormaetxea

Latin America is a region especially vulnerable to the effects of climate change. Although its total contribution to the emission of greenhouse gases is not significant (it only represents 9%), "the development style of the region shows an inertia that erodes its own bases of sustainability", according to the report The economics of climate change in Latin America and the Caribbean, recently prepared and published by ECLAC (Economic Commission for Latin America and the Caribbean, dependent on the UN).

The most conservative forecasts estimate that the effects of climate change could subtract between 1.5% and 5% from the regional Gross Domestic Product (GDP) during the next decades. The report explains that climate projections suggest that the average temperature in Latin America will increase between 1.7ºC and 6.7ºC by the end of the 21st century.

The most affected sector would be agriculture, which contributes 5% of its total wealth to the region; a worse performance of this sector would also impact on the governments' social agenda, since it would complicate the goals of reducing poverty, which are priorities for most Latin American countries. "Climate change will induce changes in national and regional patterns of agricultural production and will have a greater impact on subsistence crops (...) it will also cause increases in food prices, with consequent effects on nutrition", explains the report . According to World Bank calculations, the cost of adapting the most vulnerable sectors of Latin American economies to the effects of climate change would range from $ 16,800 to $ 21,500 million annually until 2050. This amount includes the adaptation of agriculture, infrastructure, water resources, coastal areas, health, fishing and protection against extreme weather events (torrential rains, tsunamis, etc.)

Other structural changes would also need to be addressed; the main ones, the matrix of the production model and transport. Regarding the former, it would be necessary, according to Cepal, to invest more in infrastructure, modify the current technological paradigm (which has little innovation), and reduce economic incentives and subsidies.

The transport model that prevails in the region does not help sustainability either. It is highly based on the use of private vehicles, with the highest energy expenditure and the highest CO2 emissions that this entails. According to the report, "the lack of modern, safe, and quality public transport leads to the preeminence of private transport", both in the middle and upper and lower social strata. This scenario is difficult to modify in the short term, since the infrastructures have a useful life of between 30 and 50 years and those that are being developed in the current paradigm will continue to operate in 2050.

In summary, according to the report, combating the effects of climate change in Latin America implies a change in the current development paradigm, which favors equality and social cohesion and "reduces vulnerability to the adverse impacts of climate change and less onerous mitigation costs ”.


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