Among the scores of intra and international conflicts and problems that have characterized the last two decades, climate change has emerged as a force to be reckoned with. Forest fires, hurricanes, melting glaciers, sinking cities – the knells are ringing loud and clear. The time for action is now. If not now, it will be never.

Disproportionate consequences of climate change

Climate change is a global calamity. No region will go unscathed. And yet, the highly skewed impacts of the crisis cannot be sidelined. Certain countries of the world have thus far borne a disproportionate burden of the challenge, and will likely continue to do if nothing changes.

Latin America is one such region. Comprised of Southern and Central America, Mexico and the Caribbean islands, Latin America contributes to less than 10% of global greenhouse gas emissions (World Bank, 2021). But the slew of droughts and floods in recent years have rendered the subcontinent particularly vulnerable. Indeed, this is a recurring pattern seen in most, if not all, developing countries.

Faced with the catastrophic consequences of climate change alongside the imperative to hasten development and better standards of living, these countries find themselves at a crossroads. Poverty reduction, better employment opportunities, infrastructure development – the trajectories that have bought the developed nations of today here have relied heavily upon fossil-fuel intensive technology and intensive agriculture.

But do developing countries in the 21^st century have the same options?

Climate action is a frequently-emphasized on the United Nations agenda. Numerous talks have highlighted frameworks intended to bring countries onto the path of sustainable development, the most recent of which was COP28 under the aegis of the United Nations Climate Change Conference.The bid is to reach the overarching goals of the Paris Agreement to hold “the increase in the global average temperature to well below 2° C above pre-industrial levels”.

There has also been a general consensus that this would require all countries of the world to pursue sustainable development and growth strategies in order to minimize emissions. This would include a shift from fossil fuels to renewable energy for electricity generation, replacing greenhouse-gas emitting technologies with clean, low-carbon alternatives, minimizing waste creations, and the restoration and maintenance of forest ecosystems.

A critical situation in the LAC region

The LAC (Latin America and the Caribbean) region is faced with no dearth of issues surrounding the impacts of climate change, coupled with the complications arising from proposed ways of tackling the problem. Agricultural productivity, hydrological regimes, and biodiversity are all facing highly adverse impacts due to extreme heat and changes in precipitation patterns. Coastal livelihoods are under threat due to ocean acidification, sea level rise, tropical cyclones, and temperature changes. Tourism, food and water security, and health in the Small Island Developing States of the Caribbean will bear the brunt of the same. As glaciers melt, fresh water sources used for consumption, irrigation and hydroelectric power are diminishing. Simultaneously, sea levels are rising.

It is clear, therefore, that existing poverty and lack of employment are being exacerbated by the climate crisis. Between 150,000 and 2.1 million people are “pushed into extreme poverty because of natural disasters in the region” (World Bank, 2021). These numbers are not trifling, and have been predicted to rise to 3 million by 2030.

Crop yields of beans and maize have been projected to decline by around 20% (in the LAC region?). 160 million people do not have access to a safely managed water supply, and 350 million do not have adequate access to safe sanitation. They are thus made highly susceptible to vector-borne diseases. The economic consequences of climate change in the region are substantial as well. Argentina in 2018, for instance, lost around $1.5 billion in tax revenues, resulting largely from the drought-induced decline in exports in 2017. Increase in public debt, reduction in long-term sustainable growth and a subsequent slowed and inadequate response to climate-related risks thus serve to perpetuate the vicious cycle that Latin American countries find themselves in (World Bank, 2021).

Sustainable Development in the LAC region

In 2015, 193 member states of the United Nations adopted the 2030 Agenda for Sustainable Development at the Sustainable Development Summit. At the crux of the agenda are the following goals – eradication of extreme poverty, reduction of inequality, decent work for everyone with the aim of making economic growth inclusive, sustainable cities, and of course, the mitigation of climate change (CEPAL, United Nations, 2023).

Developing regions like the LAC, however, are faced with the constant tug-of-war at the policy front, as these goals compete for human and monetary resources.

There are two challenges that have made the low-carbon transition in these countries that much more daunting –

1. Relative to the incomes of these countries, emissions reductions are significantly more expensive
2. If high-emission sectors such as coal, oil and gas are to eventually be phased out, these countries will face a major loss in export and fiscal revenues (UNDP, 2022) 

Restricted fiscal capacity and financing have limited investment in these countries. an investment that is vital if they are to make the low-carbon transition.

Yes, addressing climate change while paving the path towards sustainable development appears to be an inexorably challenging task. But the foundations for viable action are there. In essence, LAC countries would have to adopt a framework that would finance the transitions while offsetting the likely fiscal losses and also developing new sources of income. 

‘Green fiscal rules’, for instance, have been touted as essential for countries to develop sustainably (UNDP, 2022). This would entail public investment spending to reduce the impact of economic activity on the environment. Spending that would go toward activities that contribute substantially to at least one of the following six objectives – climate change mitigation, climate change adaptation, sustainable use of water and marine resources, circular economy, pollution prevention and health ecosystem. Indeed, contributing to anyone must not impede progress in any of the other five. There are also ways to ensure economic and employment opportunities for all, thereby forging ahead on the path of development, while making sustainable shifts. Natural disaster preparedness, technological and sectoral capacities to eliminate extreme weather risks, new financial products to amplify resilience, and optimal use of degraded areas can all be explored. ICTs (information and communication technologies) can improve efficiency in networks and equipment, monitor weather events, and inform people about impending disasters. In time, countries should thus be able to adapt to anticipated climate-induced shocks (World Bank, 2021).

Does it have to be a catch-22?

The question is –can low- and middle-income countries develop without having to shelve their sustainability goals? Policies aimed at reducing greenhouse gas emissions may be at odds with fossil fuel-reliant growth strategies. The debate about balancing economic interests with climate change goals holds as much water today as it did a decade prior.

There is a body of work that underscores that it is indeed possible to combat climate change without threatening economic growth. Moreover, climate action will prove to be vital in drawing disenfranchised populations outside the poverty and vulnerability traps.

Firstly, the world’s richest developed countries have to do more. They contribute more to global emissions and, by virtue of their place in the world income distribution, are poised to contribute monetarily. However, developing countries cannot choose the status quo either. If they do so, while the rest of the world pursues a net zero path, global greenhouse gas emissions will not go below 40% of current levels (World Bank, 2022).

Additionally, the rhetoric of climate actions being at odds with economic growth may be untrue. Trade-offs that have hitherto been unavoidable are being gradually rendered untrue. Solar and wind energy are possibly cheaper today than coal and gas. Reduced emissions will improve air quality, with positive implications for health outcomes, particularly vis-à-vis the physical and cognitive development of children. Healthy ecosystems and soil resulting from land restoration and management will contribute to farmer incomes, while also reducing emissions and flood risk (World Bank, 2022).

We might also witness something akin to what has been outlined in the Porter hypothesis (1991), according to which cleaner technologies will eventually be able to compete with their less clean predecessors, even if their initial introduction is by mandate (World Bank, 2022).

Investing in making urban spaces greener and more amenable to broad climate-action goals will create ‘productive’ cities, with essential jobs for people as well as the required institutions (World Bank, 2022).

But perhaps much of this is easier said than done.

A resilient and sustainable transition will require a major boost to access to green technology, alongside adequate investment and infrastructure. Global value chains will have to connect poorer countries to new technology.

The skewed nature of the burden of climate change only means that every country will have to adopt the motto “one for all, and all for one”.

References:

1. Wellenstein, A. & Hickey, V. (2021). “10 key points on climate change impacts, opportunities and priorities for Latin America and the Caribbean”. World Bank. https://blogs.worldbank.org/en/latinamerica/10-key-points-climate-change-impacts-opportunities-and-priorities-latin-america-and#:~:text=%231%3A%20LAC%20contributes%20about%2010%25%20of%20global%20GHG%20emissions.&text=Both%20Mexico%20and%20Brazil%20are,1.33%25%20of%20global%20emissions%20each.
2. World Bank (2021). “Promoting Climate Action Change in Latin America and the Caribbean”. https://www.worldbank.org/en/results/2021/04/14/promoting-climate-change-action-in-latin-america-and-the-caribbean
3. Economic Commission for Latin America and the Caribbean (2023). “The 2030 Agenda: Are Latin America and the Caribbean on Track to Achieve the Sustainable Development Goals by 20230?”.  https://www.cepal.org/en/notes/2030-agenda-are-latin-america-and-caribbean-track-achieve-sustainable-development-goals-2030
4. Cárdenas, M. & Orozco, S. (2022). “The challenges of climate mitigation in Latin America and the Caribbean: Some proposals for action”. https://www.undp.org/sites/g/files/zskgke326/files/2023-01/PNUDLAC-working-paper-40-climate-EN.pdf
5. Hallegatte, S. (2022). “Getting it right on development: We do not have to choose between people and climate”. https://blogs.worldbank.org/en/climatechange/getting-it-right-development-we-do-not-have-choose-between-people-and-climate