As the weeks go by, the alerts from the experts regarding the growing probability that the El Niño phenomenon will be present in the coming months. The measurements of the water temperature both in the coastal areas of Ecuador and Peru, as well as in the so-called intertropical confluence zone of the Pacific Ocean, show numbers that exceed previous records.
If current forecasts come true, we will soon see extreme events throughout the Americas. I am referring to intense rainfall or strong droughts, in addition to atmospheric disturbances such as tornadoes that have devastated parts of the North American territory.
Although, to tell the truth, the alterations will be observed in the five continents, we are more exposed than others. The particularities of our biodiverse geography, combined with urban settlements located in risk areas, apart from vast extensions dedicated to agriculture, make us vulnerable and are a cause for concern that must be taken very seriously.
As scientists have long pointed out, more intense episodes are part of global warming, which unfortunately is running its course. During the third week of March, those who make up the Intergovernmental Panel on Climate Change (IPCC), attached to the United Nations, pointed out the damage already caused to nature and human beings by the average rise of more than one degree centigrade in temperatures on the planet, compared to the levels of the second half of the 19th century.
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According to a World Bank report, extreme poverty should increase by 300% by 2030 in Latin America and the Caribbean due to climate change
This progression continues its course, despite the calls for action and international commitments signed. Although the adoption of sustainable and non-conventional methods for energy generation is advancing vigorously, it is essential to redouble efforts because, according to IPCC experts, the window of opportunity to achieve effective results threatens to close.
It is no secret to anyone that this is one of the great dramas of our time. There is not a region of the planet that is not hit by natural catastrophes, increase in temperatures, effects on agriculture and, consequently, on food production.
As if that were not enough, Such phenomena mainly hit the most vulnerable populations. According to a World Bank report, extreme poverty should increase by 300% by the year 2030 in Latin America and the Caribbean due to climate change.
How much responsibility do we Latin Americans have in what happens in the planetary sphere? It is worth remembering that the region’s net greenhouse gas emissions amount to 8.4 percent of the world totalsomething that is similar to the weight of the economy and the population in their respective global indicators.
Even so, it is worth emphasizing that the energy sector is below the universal norm in its contributions (43 versus 74 percent), while the opposite is the case with the segment of agriculture, livestock, forestry, and changes in land use. (31 vs. 14 percent). Specific, deforestation shows a high share of responsibility in the aforementioned balance.
Pending subject
For this reason, any action taken requires recognition of the particularities cited, among others so that the remedies are not applied in the same doses as in other latitudes where the reality is very different. To this is added the pending issue of poverty and inequality.
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And it is that the precariousness of the lowest income population is expressed in many ways ranging from the cost of foodfrom or access to it to the precariousness of the homes or their location in risk areas. Added to this are the usual challenges such as labor informality or the still low health coverage. It is also no mystery to anyone that the pandemic involved setbacks on this front.
Although it is correct to reduce the carbon footprint through actions that range from the protection of natural areas to the limitation of extractive industries and the implementation of a sustainable productive matrix, the challenges are multiple. Perhaps the most obvious is how meet these goals in sync with the objectives of reducing poverty and marginality.
Achieving both purposes is part of the line of work of the Development Bank of Latin America (CAF). On the occasion of the approval to increase the capital of the entity under my control by 7,000 million dollars, which took place in March 2022 during our shareholders’ meeting, we released a renewed proposal. This is summarized in the intention of being a Green Bank that goes through not only sustainability, but also care for biodiversity, including that of our seas.
In practical terms, it is about making available to the countries in which we work $25 billion of direct green financing in the span of five years. By 2026, 40 percent of the operations approved in that period should fall into this category.
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Thus, we have been incorporating environmental and climatic variables in the design and structuring of all projects and programs in which we are involved. Speaking specifically, we are interested in strategies that involve biodiversity conservation, sustainable use of natural capital, as well as climate change mitigation and adaptation schemes.
Regarding the thematic agenda, what was agreed includes programs related to water, circular economy, energy, transport, digitization, agriculture or forestry development. Apart from resources, the intention is to provide technical assistance that includes regulatory frameworks, good practices and exchange of successful experiences.
The foregoing, of course, does not have to be opposed to the challenge of achieving greater social development. In fact, on the occasion of the capital increase to which I referred a few lines back, we received the strategic mandate to be the Bank for economic and social reactivation in the nations in which we operate.
green agenda
I have always been convinced that the start-up of a green agenda (and also blue, that cares for the oceans) is a great opportunity for progress for Latin America and the Caribbean. Having said the above, the CAF has usually spoken about the urgency of evaluating environmental policies based on an improvement in poverty indicators, since in our opinion these are concordant objectives.
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In this regard, it is common to find the argument according to which economic growth is associated with a higher carbon footprint, as suggested by the example of China over the past decades. In fact, during the pandemic, which led to a contraction in so many places, the discharges into the atmosphere were reduced.
Is this to say that we must choose between reducing emissions or reducing poverty? Insist that this can be a false dilemma. Cleaner production methods and sustainable lifestyles open up immense possibilities that we cannot ignore in a region as blessed by nature as ours.
Apart from the above, the debate must take place with appropriate measurement systems that show a much broader picture. I mean multidimensional indices. In other words, it is not just about examining the monetary income of households, but elements such as access to public services, health, housing, education and the environment, as complementary factors.
Both the UNDP (United Nations Development Program) and the World Bank, along with some thirty governments, have incorporated this metric developed at the University of Oxford as a system that allows joint priorities to be established in order to define initiatives aimed at to achieve what is known as the double reduction of emissions and poverty. The usefulness of the tool is that it allows the dilemmas to be adequately evaluated in the face of different possible paths.
The reason is that the general methodology effectively incorporates three dimensions: education (years of schooling and school attendance), health (nutrition and infant mortality) and standard of living (fuel for cooking, sanitation, water, electricity, housing and asset ownership). . Thus, a more complete vision is achieved, which is particularly useful in our region.
By the end of 2022, there were already multidimensional poverty indices in 11 countries in the region, including Colombia, whose progression is notorious. It is important to note that the weightings of each element may be different, so the figures obtained are not necessarily comparable between one nation and another.
Beyond the clarification, what is important here is that there is a way to create a framework that puts the objectives signed in the framework of the United Nations and international conferences, relative to zero poverty and zero net emissions, at the same level. In other words, makes it feasible to combine data on poverty and climate.
Likewise, this approach makes it possible to make the use of public resources, which are always scarce, more efficient. As those dedicated to evaluating projects would point out, cost-benefit analysis becomes more robust.
Reducing the emissions that cause climate change and at the same time achieving significant reductions in poverty does not have to be a utopia
An example illustrates the need for observations with a wider range. The gas, which has been used in millions of Latin American homes for cooking, emits carbon dioxide. However, its massification allowed to replace firewood or oil derivatives that are much more polluting and, in the case of the first, they contribute to deforestation.
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Hence, the position of abandoning it is probably not the most indicated in the short or medium term, in addition to the fact that proceeding in this way would very surely affect the family economy of so many. I use this illustration not to open a debate regarding this fuel, but to point out that we require a more complete reading in order to assume a comprehensive obligation.
Reducing the emissions that cause climate change and at the same time achieving significant reductions in poverty does not have to be a utopia. It is necessary to aim, then, at what is known as the double descent, since there is an opportunity to create a framework that places both purposes on the same level.
And I reiterate that I am not talking about an unrealizable dream. On the contrary, at CAF we believe that a green, blue and biodiverse strategy is viable, which ends misery and results in substantial improvements in the quality of life of Latin American and Caribbean people. We continue to work towards that goal, both with funding and with knowledge.
SERGIO DIAZ-GRANADOS
FOR THE TIME
President of the Development Bank of Latin America, formerly the Andean Development Corporation, CAF.
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