Global challenges, regional solutions: Latin America and the Caribbean in the face of the climate and biodiversity crisis

Reporte de Economía y Desarrollo (RED)

Global challenges, regional solutions: Latin America and the Caribbean in the face of the climate and biodiversity crisis

Fecha de publicación: 2023-09-26

Autores: Brassiolo, Pablo ; Estrada, Ricardo ; Fajardo, Gustavo ; Juncosa, Federico ; Odriozola, Juan ; Schargrodsky, Ernesto ; Toledo, Manuel ; Vicuña, Sebastián

This edition of the Report on Economic Development (RED) examines the challenges and opportunities that climate action and the protection of ecosystems and biodiversity pose for Latin America and the Caribbean. The report emphasizes three key messages relevant to all countries: the importance of adaptation, the need to contribute to global mitigation efforts, and the urgency of preserving natural capital as a key factor in the development process. It also highlights that policies to address these challenges may vary depending on each country’s resource diversity and risks, with potential trade-offs between conflicting objectives and opportunities for synergies that must be harnessed. This document seeks to contribute to the debate about the best public policy alternatives to promote productive economies with low carbon emissions, greater social inclusion, and sustainable use of natural resources. The financing needs to meet development, climate, and biodiversity preservation goals are overwhelming. Therefore, CAF – Development Bank of Latin America and the Caribbean has committed to increasing green financing to 40% of its approvals by 2026 and to being one of the most active institutions in the region in mobilizing resources from major green funds and international partners.

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País / Región: América Latina

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Brassiolo, Pablo; Estrada, Ricardo; Fajardo, Gustavo; Juncosa, Federico; Odriozola, Juan; Schargrodsky, Ernesto; Toledo, Manuel; Vicuña, Sebastián. (2023). Global challenges, regional solutions: Latin America and the Caribbean in the face of the climate and biodiversity crisis. Caracas: CAF

Capítulos

Chapter 1

Climate change and biodiversity: From the physical basis to the economic perspective
Climate change and biodiversity loss are urgent global challenges that pose significant threats to human life. The latest evidence leaves no doubt that the global climate is changing and biodiversity is declining at an alarming rate. Human actions are at the core of these environmental crises. Technological progress, with the resulting economic growth over the last two centuries, has led to a significant improvement in the living standards of the world’s population. However, it has also meant increasing consumption of fossil energy, large-scale land use changes, and overexploitation of natural resources, all of which have altered the ecological balance of the planet. This chapter explores the interconnectedness of climate change, biodiversity, and human activity. It begins by providing a brief overview of the physical mechanisms behind climate change. These mechanisms explain how greenhouse gas (GHG) emissions—primarily from burning fossil fuels and activities that alter land use—drive global climate variability. Some of these gases are reabsorbed by terrestrial and marine ecosystems, such as forests and oceans, acting as natural sinks. However, the remainder accumulates in the atmosphere, causing global warming. This warming triggers changes in the climate system, impacting regions differently and affecting human activities, ecosystems, and biodiversity.
 

Autores: Brassiolo, Pablo Vicuña, Sebastián

Chapter 2

Economic activities: Sustainability in production and consumption
The impacts of climate change are far-reaching and affect all economic sectors. In Latin America and the Caribbean (LAC), economies rely heavily on natural resources, with agriculture and tourism being particularly vulnerable to climate variability. As temperatures rise and climate patterns become more extreme and unpredictable, these sectors face increasing challenges to avoid productivity losses, cost increases, and ultimately, competitiveness declines. Additionally, the effects of climate change on infrastructure, due to the increased frequency and intensity of extreme weather events and rising sea levels, also pose significant economic challenges across all sectors. The magnitude of these challenges is reflected, at least in part, in the climate change vulnerability index for the region developed by CAF (2014). This index consists of the risk of exposure to climate change and extreme events, human sensitivity to this exposure, and a country’s capacity to adapt or take advantage of potential climate changes. This indicator reveals the great heterogeneity of climate change impacts in the region and highlights the high risk faced by countries in Mesoamerica, the Caribbean, and the northern and central regions of South America.
 

Autores: Odriozola, Juan Toledo, Manuel

Chapter 3

Ecosystems and biodiversity in the face of climate change
The ecosystems provide vital services to human existence. These benefits, known as ecosystem services, encompass the provision of food, freshwater, medicine, and materials. Moreover, they play a crucial role in regulating and maintaining the environmental components that shape our living environment and serve as a wellspring of inspiration and a source of cultural identity. The quality, intensity and type of available ecosystem services are indispensable for human development (Millennium Ecosystem Assessment, 2005; PBES, 2019). Ecosystem services for climate regulation are crucial to tackle climate change. As discussed in Chapter 1, ecosystems play a vital role in mitigating climate change by absorbing carbon dioxide from the atmosphere and storing it in biomass and soils. In LAC, the Amazon rainforest alone holds a carbon stock equivalent to nine years of global fossil fuel emissions (Baccini et al., 2012; Ferreira, 2023). Furthermore, ecosystems contribute to climate change adaptation by moderating extreme weather events and regulating local climate patterns. For instance, mangroves and coral reefs serve as protective barriers, reducing the risk of coastal flooding and shielding Caribbean communities from the escalating frequency of hurricanes attributed to climate change.
 

Autores: Estrada, Ricardo Juncosa, Federico

Chapter 4

International climate change and conservation policy: coordination challenges
International coordination in climate and biodiversity policy is necessary because both are issues where the actions of each country affect others. Over the decades, various initiatives have emerged to coordinate these efforts, yet atmospheric greenhouse gas concentrations and biodiversity loss have continued to rise. This chapter discusses the key challenges and points of interest for international coordination in these areas. To provide context, it first outlines the evolution of cooperation in recent decades. This historical review reveals that despite the interaction between climate change and biodiversity conservation as natural phenomena, negotiation and coordination channels on these issues have evolved independently. This calls for a separate analysis of each case while considering the connection between climate and biodiversity when contemplating specific policies and actions.
 

Autores: Fajardo, Gustavo

Chapter 5

Climate change response and the development agenda in Latin America and the Caribbean
The preceding chapters shed light on the enormous challenges posed by climate change and biodiversity conservation to the world. Global greenhouse gas (GHG) emissions must be rapidly reduced if global warming is to be limited in line with the goals of the Paris Agreement. Moreover, adaptation to the current and expected impacts of climate change must be redoubled to avoid excessive costs to the well-being of the world’s population and to protect and restore natural capital, in order to restore the planet’s ecological balance. Latin America and the Caribbean (LAC) is not exempt from these challenges; on the contrary, the region is among the most affected by climate change and least prepared to withstand its impacts, making the need to enhance the resilience of its economies even more urgent. Additionally, the region’s abundance of natural capital positions it as a key player in achieving global climate and conservation goals.
 

Autores: Brassiolo, Pablo Estrada, Ricardo Schargrodsky, Ernesto

Autores y autoras

Brassiolo, Pablo

Num. de publicaciones 36

Estrada, Ricardo

Num. de publicaciones 32

Fajardo, Gustavo

Num. de publicaciones 23

Juncosa, Federico

Num. de publicaciones 20

Odriozola, Juan

Num. de publicaciones 8

Schargrodsky, Ernesto

Num. de publicaciones 15

Toledo, Manuel

Num. de publicaciones 19

Vicuña, Sebastián

Num. de publicaciones 3

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