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Opinion

Latin America and the Caribbean, the unexpected climate change actor

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One of the best-kept secrets of Latin America and the Caribbean is that it has 60% of the planet's biodiversity, 50% of the world's primary forests and 28% of the land with agricultural potential. This advantageous reality is set to become one of the region's main tools to position itself as one of the most relevant actors in the implementation of climate action.

According to the International Union for Conservation of Nature, up to 37% of climate change mitigation needs can be addressed with nature-based solutions. This places Latin America and the Caribbean in a privileged position. However, to realise its potential, experts agree, it will be necessary to work in a coordinated manner to preserve natural ecosystems, many of which are shared by several countries.

One of the pieces of good news to come out of COP 26, the climate change summit being held in Glasgow from 1 to 12 November, is the agreement between Colombia, Costa Rica, Ecuador, and Panama to conserve the Eastern Tropical Pacific Marine Corridor, an ecosystem that generates 3 billion dollars a year, mainly from fishing, tourism and maritime transport. In this sense, CAF also announced that it will contribute 1 million dollars to the cause, in a sign of joint and coordinated work.

Another area in need of protection measures is the Amazon. Shared by Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela, it is one of the great lungs of the world, the source of a rich biodiversity and home to 40% of the planet's tropical rainforests. In this line, the Leticia Pact is called to promote coordinated work to reduce deforestation, to stimulate research processes and to increase resilience to extreme climate events.

"The adaptation and conservation measures of natural ecosystems that the region is carrying out are essential in the fight against climate change. Climate adaptation, biodiversity conservation and, to the same extent, the preservation of the livelihoods of millions of Latin Americans depend on them," says Julián Suárez Migliozzi, Vice President of Sustainable Development at CAF.

Currently, more than half of the countries in the region have 17% of their land area protected, but the rest have levels of around 10%. In parallel, the region is only responsible for 10% of greenhouse gas emissions but will be one of the most affected by the rise in global temperature. To name just a few consequences, rainfall patterns will change dramatically, Andean glaciers will melt, and the Pacific and Atlantic oceans will rise, among a long list of events.

COP 26, which aims to create new global consensus to increase investments in renewable energy and accelerate green growth, has a special significance for Latin America and the Caribbean. The challenges are to expand financing for adaptation and mitigation initiatives, to position itself as a reference actor in the still incipient carbon market, and to bet on nature-based solutions.

The region also needs to anticipate the inevitable transition to clean economies that the world will experience in the coming years. Reality shows a widespread dependence on fossil fuels, and production and service systems with low levels of modernisation and intensive use of natural resources. 

Expectations for Latin America and the Caribbean at COP2

Given the objectives of COP26, what is at stake for Latin America and the Caribbean? The answer can be summed up in three points: finance, nature-based solutions, and carbon markets.

The fight against climate change needs financing. Countries in the region have been severely affected by the pandemic, which has further exposed their limited fiscal capacity. The region therefore needs to add new avenues of finance to increase its resilience and align its economic recovery strategies with the goals of the Paris Agreement.

Nature-based solutions are also essential. Latin America and the Caribbean has rich biodiversity and ecosystems that need to be integrated into climate action. Such solutions can be a framework for addressing social objectives, biodiversity loss and climate change, and include ecosystem-based adaptation, inclusion of indigenous communities and a focus on risk reduction. Countries in the region have highlighted the importance of this approach, and could generate a sustainable production model, increasing their resilience and economic development, which is compatible with increased competitiveness.

As for the carbon market, which is still in its infancy, it is presented as an opportunity to balance emissions and receive new financing. These are markets for transferring emission reductions on a voluntary or binding basis between parties. Although they are not yet regulated, agreement between countries at COP26 will be crucial to revive them. The vast majority of countries in the region have mentioned their intention to use this mechanism once it is properly regulated.

COP26 is demonstrating that the countries of the region have the necessary commitment to face the challenges of climate action in the coming decades. This is the way to capitalise on the advantageous position that Latin America and the Caribbean have thanks to their natural wealth.

Robert Valls, Senior Communications Executive at CAF

Visiones del Desarrollo is a section promoted by CAF -development bank of Latin America- that analyses the main development issues in the region. The articles it contains are published simultaneously in the main Latin American media.