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ECLAC Addresses the Paradoxes and Challenges of Climate Change's Economic and Social Impact in the Region

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22 September 2014|Press Release

The Executive Secretary, Alicia Bárcena, said in a statement that the economic costs of climate change could total between 1.5 % and 5 % of the annual GDP of Latin America and the Caribbean, in the case that the temperature rises an additional 2.5 °C.


photo of Alicia Bárcena, ECLAC Executive Secretary.
ECLAC Executive Secretary, Alicia Bárcena, at a press briefing in New York.
UN Photo/Kim Haughton

(22 September 2014) Preliminary estimates suggest that the economic costs of climate change will be around 2.5 % of Latin America and the Caribbean's annual Gross Domestic Product (GDP), in the case that the temperature rises 2.5 °C above the historical average, the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, said today in the following statement released in the context of the Climate Summit, which will take place on 23 September at the United Nations headquarters in New York:

"For the last decade, ECLAC has studied the economic and social costs of climate change in Latin American and Caribbean countries, providing the statistical information needed to make decisions and offering numerous public policy recommendations.

Estimates from different studies suggest that the economic costs of climate change could total between 1.5 % and 5 % of the region's annual GDP. These calculations are still preliminary and include a high level of uncertainty because they do not address all the potential effects or possible results of adaptation actions.

These averages do not reflect the region's heterogeneity either, but they do offer enough evidence to justify incorporating the medium-term effects of climate change into public decisions, for example, regarding infrastructure investments. Investment is the bridge between the short and medium term and these studies allow policy makers to act early.

Latin America and the Caribbean has contributed less to climate change than other regions, but nonetheless it is particularly vulnerable to its effects. The region's greenhouse gas emissions (GHG) represent 9 % of the global total, with an annual growth rate of 0.6 % between 1990 and 2011 (compared with 1.5% worldwide). What characterized this region is that a significant proportion of emissions have come from changes in the use of soil, deforestation and agriculture.

The most pressing challenge for the region at this time is adaptation to climate change, especially in the Small Island Developing States of the Caribbean and Central American countries. The annual adaptation costs for Latin America and the Caribbean have been estimated at around 0.5 % of the region's annual GDP. Although these calculations are preliminary, they clearly reflect the trend in this phenomenon.

The region must urgently design and implement adaptation strategies that include a long-term vision and take into account collateral impacts. The protection of water basins, including forest and soil preservation on high ground and periodic dredging in low areas, is one telling case. A notable example of the pressing need for adaptation is the flooding caused by hurricanes at important basins in southern Mexico and northern Colombia.

The vulnerability of Latin American and Caribbean countries is exacerbated by its geography, the way its population and infrastructure are distributed, its dependence on natural resources, the importance of agricultural activity, and the length of its coastal areas-both along the Pacific and the Atlantic.

Evidence suggests that climate change impact in Latin America and the Caribbean is already relevant and will probably be greater in the future. Variations in temperature levels and precipitation patterns can already be seen. The biggest risks are concentrated in agriculture, water availability, forest conservation, loss of biodiversity, the population's health, tourism in coastal areas, and rural poverty reduction.

The economic dynamism experienced by the region in the last decade has contributed to reducing poverty and improving the population's living conditions, but it has also generated negative effects such us atmospheric pollution, greater fossil fuel consumption and the resulting contribution to climate change.

It is a fact that this region has the highest degree of urbanization on the planet. At the same time, there is an increase in private motorization. The lack of modern, safe and high-quality public transportation leads to the preeminence of private vehicles, concentrated among the people who have the highest income levels and who also benefit the most from subsidies to fossil fuels and infrastructure.

The region still has time to choose the paths towards development with equality and environmental sustainability, especially in cities. This is the time for the region to make crucial decisions in order to increase the supply and quality of public services, use renewable energies and shift to a lower-carbon production matrix.

On a global level, the current commitments on mitigating greenhouse gases are still insufficient for stabilizing climate conditions. To do that, the approximately seven tons of CO2 per capita that are emitted today would need to be reduced to two tons per capita by 2050. Only a global agreement with the participation of all countries, along with a paradigmatic technological change in production and consumption patterns, could provide a solution to this phenomenon.

That is why ECLAC is here to accompany the efforts of the United Nations Secretary-General, Ban Ki-moon, in convening this Summit ahead of the Conference of the Parties that will take place in our region-specifically in Lima, Peru-in December of this year.

Latin American and Caribbean countries can be fundamental actors in this global but asymmetrical challenge, given that very often those who have contributed the most to GHG emissions historically do not suffer the most intense impacts of climate change, and they normally have more resources to adapt to the new climate conditions.

The challenge of climate change is, ultimately, to transition towards a new model of sustainable development with equality, in the framework of shared but differentiated responsibilities."

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