Latin America and the Caribbean could suffer more from the effects of climate change than other regions in the world because of its location in a zone of frequent hurricanes with island nations and low coastal areas, its dependence of Andean snow water for urban and rural provision of water and its vulnerability to floods and forest fires, among others.
Given that greenhouse gas emissions in the region are low (11.7% of the world total in the year 2000), national governments should focus on adapting to climate change. Currently, government response tends to be spontaneous and reactive, and focused mostly on recovery after natural disasters.
Preventive adaptation policies should foresee losses going from the primary sector to public finances. Moreover, says ECLAC, given the social inequality and limited funds available in the region, the State should quantify the economic impact of climate change in order to address its consequences, such as droughts, floods, epidemics, heat waves and damages in infrastructure, among others.
Developing capabilities of adaptation involves facing challenges such as distributing costs among private (producers and consumers) and public agents, specifying and focalizing measures and raising awareness among authorities in charge of economic, social and environmental areas that the issue should be addressed comprehensively in these three dimensions.
Advancing in adaptation requires making efforts to protect the structure of public finance, the stability of the private sector and macroeconomic performance. It should also consider adjusting to the changes caused by the response of developed countries to their needs of mitigation in trade and investment.
Given the above, countries in the region should consider strategic options that may allow them to advance towards development models low in carbon emissions.
ECLAC considers important to draw the attention of economic authorities in the region to the effects of climate change. The better prepared they are, the unexpected pressure on spending and losses in tax revenues will be lower and economic governance greater.
Mexico, Brazil, Central America, the Caribbean and South America are already carrying out studies on economy and climate change which will strengthen the regional perspective. This research will provide greater certainty about the national and sectorial magnitude of adaptation costs and the potential gains of mitigation.