World Bank Global financial & climate crises

World Bank Global financial & climate crises

Last week the World Bank released a report on Latin America’s responses (or possible responses) to the challenge of climate change with the promising title: Low Carbon, High Growth – yet, beyond providing some informative analysis of the costs of climate change and distribution of responsibilities in the Latin American region, the policy conclusions rest on a shaky assumption: “an appropriate international policy environment in which a critical mass of high-income countries take a global leadership role…”

Just for the sake of a brief overview – the report outlines current manifestations of climate change in the Latin American region. Most significant and most worringly are the melting of the Andean glaciers that jeopardises ecosystems and water supply; the bleaching of coral reefs, hosting 65% of Latin American fish species, providing coastal protection and attracting tourists; apparent damage of the ecologically important Gulf Coast wetlands in Mexico; and the increasing possibility of a climate-related dye-back of tropical, borreal and mountain forests in the region.

These phenomena will have significant ecological, social and economic consequences, that even if not yet apparent are somewhat quantified in the report: increases in diseases such as malaria and dengue fever by 70,000 cases over the next 50 years; an estimated sevenfold rise in average economic losses from hurricanes; region wide agricultural losses that could amount to 18% of GDP (net present value of a one-time shock), to name the most significant.

Who is responsible for what in the Latin American region? – around 85% of the region’s emissions are concentrated in six countries: Brazil and Mexico together account for almost 60% of GHG emissions (and GDP). Argentina, Colombia, Peru, and the República Bolivariana de Venezuela for another 25%. A similar picture emerges if you exclude land use change with the exception that Brazil’s contribution falls from 46 to 34% and Mexico’s rises from 13 to 21%. In other words, although emissions from land use change make up almost 50% of overall emissions, their significance vary hugely from country to country.

Overall, the report concludes that Latin America’s reduction in “carbon intensity of energy” has been almost entirely compensated by a growing consumption of energy per unit of output.

What ultimately matters to define who should do what, is the rate of growth of emissions and the ratio of emissions to GDP. Based on this analysis, the report concludes that some LAC countries have a relatively high mitigation potential in energy (e.g. Argentina, Chile, Mexico, and República Bolivariana de Venezuela) while for others (e.g. Brazil and Peru) the potential for reducing GHG emissions lies mainly in LUC or agriculture.

How? – “by means of implementing policies and programs to conserve its large forests and to maintain its relatively clean energy matrix” (page 35) – The report outlines a suite of policy areas that need specific attention; yet, given that it covers an entire region it cannot provide any details on actual implementation on most of these, although citing some interesting case studies. Most critically, however, the policy conclusions and thus the outlook on Latin America’s ability to actually pursue “high growth with low carbon” rests on the assumption of “an appropriate international policy environment in which a critical mass of high-income countries take a global leadership role…” (p. 80) Poznan, as the Climatico report shows, has been an international set back where exactly those most proudly countries who showed particular leadership in pointing out their leadership (e.g. Germany) are putting their heads in the sand.

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