ECLAC presents at COP28 report that Stresses Climate Financing Needs for region in its Fight Against Global Warming

The content originally appeared on: Caribbean News Service

ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs, unveiled today in the framework of the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28), being held in the city of Dubai (United Arab Emirates), a new report by the organization that stresses the climate financing needs for Latin America and the Caribbean in its fight against global warming.

The document entitled The Economics of Climate Change in Latin America and the Caribbean, 2023: Financing needs and policy tools for the transition to low-carbon and climate-resilient economies presents current regional emissions trends, climate action commitments and estimates of the investment required to fulfill the Nationally Determined Contributions (NDCs), in addition to establishing guidelines to follow with the aim of achieving inclusive, sustainable and just development for the region.

The report was presented by the highest authority of the Economic Commission for Latin America and the Caribbean (ECLAC) at the COP28 side event “Economic cooperation between Spain and Latin America for climate finance,” held in the Spain pavilion at the global gathering. This event was moderated by Gonzalo Muñoz – UN High-level Climate Champion COP25, and board member of GFANZ LAC – and also featured remarks by Alicia Montalvo, Manager of Climate Action and Positive Biodiversity at CAF-Development Bank of Latin America and the Caribbean; Ricardo Marshall, from the Roofs to Reefs Programme (R2RP) of the Prime Minister’s Office of Barbados; and Elsa Velasco, Team Leader of EUROCLIMA+ 2020 at FIIAPP.

“Climate change is one of the greatest challenges of our time. For years, ECLAC has been analyzing its impacts in Latin America and the Caribbean and has found that the cost of inaction outweighs the cost of action, that these impacts are non-linear, and exponential, and that global warming will exacerbate the negative effects of extreme weather events,” José Manuel Salazar-Xirinachs warned in his presentation.

“Our document shows that, by 2030, the loss of labor productivity due to heat stress could reach 10% in some countries, directly impacting the region’s growth potential. Additionally, the impact of extreme events must be considered,” the senior United Nations official added.

The report stresses the importance of financing in key economic sectors such as land-use change, agriculture, livestock and forestry, which at a regional level represent 58% of greenhouse gas emissions. Despite this, financing is currently focused mainly on mitigation to the detriment of adaptation and cross-cutting actions. In fact, in 2020, 89% of global climate finance was allocated to mitigation, 8% to adaptation and just 3% to cross-cutting actions.

“Latin America and the Caribbean is deeply committed to climate action, having set an emissions reduction target of between 24% and 29% by 2030, with respect to a business-as-usual scenario. But to achieve these targets, the region’s current decarbonization rate (0.9%) would have to be four times faster,” ECLAC’s Executive Secretary emphasized.

According to the study, fulfilling climate action commitments necessitates an investment of between 3.7% and 4.9% of regional GDP per year until 2030. By way of comparison, climate finance in Latin America and the Caribbean in 2020 amounted to just 0.5% of regional GDP. Therefore, closing the climate financing gap requires increasing domestic and international resource mobilization by between 7 and 10 times, Salazar-Xirinachs indicated.

“Investment in climate action can yield not only environmental, but also economic and social gains, as the levels of investment and financing for mitigation and adaptation measures will provide a major boost to growth, employment and social development,” he underscored.

In terms of recommendations, the document also stresses the need to coordinate policies and align the financial system in order to channel investment flows towards productive activities that boost sectors that drive the economy with a view to achieving development that is more productive, more inclusive and more sustainable.

In this regard, he indicated that the region’s countries should intensify and escalate their productive development policies. He reiterated that ECLAC has identified numerous dynamic sectors – which are areas of opportunity for economic growth and collaboration – that include the energy transition, electromobility, the circular economy, the bioeconomy, the pharmaceutical and medical device industry, modern (digital) services and the care economy.

“ECLAC remains committed to and will continue working for an environmentally sustainable, socially inclusive and economically competitive future in Latin America and the Caribbean,” the Executive Secretary concluded.

At COP28, the ECLAC delegation led by José Manuel Salazar-Xirinachs has had a substantial agenda and significant participation in various events.

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