LACCW Day 3: “If we do not take action, Latin America could lose up to a quarter of its GDP due to the climate crisis”

By Climate Champions | October 25, 2023

From high-level ministerial dialogues emphasizing the importance of financial equity to discussions on sustainable cooling, adaptation and  just energy transitions, day three of the Latin America and Caribbean Climate Week 2023 once again dissected the challenges and opportunities for the region.

A fireside chat between High-Level Champions Global Ambassador, Gonzalo Muñoz and CBD Action Agenda Champion for Nature and People, Manuel Pulgar-Vidal brought to the forefront the need for long-term vision and action. Pulgar-Vidal remarked, “Most countries in Latin America and the Caribbean do not have a vision for 2050. And if you have an NDC but you do not have a path to 2050, you are going to get lost. We need non-state actors leading and supporting a national vision to 2050.”

He further warned, “If we do not take action, the Paris Agreement will not sanction us, because the Agreement does not have sanctions. The economy is going to penalize us: it is estimated that Latin America could lose up to a quarter of its GDP due to the climate crisis.”

Key takeaways:

• Without a clear 2050 vision, Latin America risks significant economic losses, potentially a quarter of its GDP, due to climate impacts.

• Adaptation gaps in food systems and water infrastructures require significant attention and investment.

• Grassroots movements and Indigenous communities play a pivotal role in shaping regional climate solutions.

• Sustainable cooling is vital, with a considerable portion of the global population facing dangerous temperatures annually.

• A just energy transition is not only morally imperative but also a practical necessity for success.

• Protection and inclusion of activists, especially those on the frontlines, is paramount for any meaningful climate transition.

Financial equity and adaptation

During a High-Level Ministerial event on Adaptation and Finance, a collective call was made to address the escalating impacts of climate change, especially on vulnerable regions, and to ensure equitable access to financial resources. H.E. Fernando Andrés López Larreynaga, Minister of Environment and Natural Resources of El Salvador, emphasized the stark impacts of extreme climate events on health, infrastructure and water access, imploring for “equitable access to finance.”

H.E. Juan Cabandie, Minister of Environment and Sustainable Development of Argentina, underscored the inequalities in global climate discussions, pointing out, “Developed countries are not taking full responsibility.” He also highlighted Latin America and the Caribbean’s role as the “green lung,” home to 40 percent of global biodiversity. H.E. Matthew Samuda, Minister of Economic Growth and Job Creation of Jamaica, spotlighted the unmet $100 billion funding pledge by developed nations, emphasizing its necessity for climate action.

Montserrat Xilotl from the UNDP shed light on the adaptation gap, amounting to $71 billion annually, underlining the significance of adapting food systems and water infrastructures. Gonzalo Muñoz presented the efforts from the Race to Resilience and highlighted the High-Level Champions’ latest initiatives, including the Sharm-El-Sheikh Adaptation Agenda, advocating for greater alignment with financial entities to realize the Paris Agreement’s objectives. Echoing this sentiment, Muñoz appealed, “Authorities – please, help us to help you. Let’s lower the barriers of mistrust and build bridges of collaboration between the public and private sector.”

Tailoring financial mechanisms for Latin America

During the launch of a new regional network of GFANZ, discussions revolved around the need for climate adaptation and financial mechanisms tailored to Latin America’s unique challenges.

Olga Cantillo, from Latin American Stock Exchange, Latinex, discussed a collaboration with Idb Invest to support companies with ESG frameworks, noting an acute lack of data hindering the comparison between companies and financial institutions. Salvadoran lawyer, María Eugenia Brizuela de Avila spotlighted Latinex’s best practices that have influenced the region and the significance of engaging formal SMEs, which make up 70 percent of the informal economy, highlighting their potential as agents of change. Gonzalo Muñoz stressed the importance of developing a standardized operational framework for climate goals and highlighted the role of GFANZ in mirroring successful strategies from the north while addressing regional specifics. Muñoz also touched upon areas like food systems, the methane agenda, public transport improvements, and the need for a greener shipping industry.

During the panel discussion moderated by Muñoz, Cantillo reiterated the importance of leading by example in the transition to sustainable practices, while Tisha Marajh, CSO, Republic Financial Holdings Limited, RFHL, described the efforts made by the Republic Bank Limited across 15 Caribbean countries, emphasizing the role of SMEs. Jorge Quintanilla Nielsen, CEO of CAPITAL+SAFI, viewed the transition as a massive opportunity and emphasized integrating environmental practices for sustainable business growth. Franco Piza, CSO at Bancolombia; Member of the GFANZ Steering Group, underlined the significance of leadership in understanding the profound implications of sustainability. Closing the session, Andrea Meza, Deputy executive secretary, UNCCD, emphasized the importance of the real-world sector in the climate transition. She advocated for financial institutions to champion disclosure, accountability, transparency, and coherent strategies. Echoing the session’s sentiment, Meza asserted, “There will be difficult decisions, but we have to be brave; there’s a bright future for all of us.”

The power of Latin American voices

Youth, Civil Society, Indigenous Peoples, Women and Gender advocates and Trade Union representatives convened to voice their expectations and visions for climate action in the region. Andrés Urrego, representing Climalab and YOUNGO, shared a sobering video depicting the struggles of Indigenous peoples in Colombia, emphasizing their lack of access to water and the detrimental impacts of air pollution. He stressed the need for broader participation spaces in climate discussions and the importance of integrating Indigenous cosmovision into these dialogues. Urrego advocated for a unified vision for Latin America during COPs and called for the preservation of platforms like the Talanoa Dialogue, highlighting the multifaceted and multi-actor nature of climate change. Aligning finance with societal needs and empowering all relevant stakeholders was also underlined.

José Antonio Mendez, representing OPIAC, spoke about the unique perspectives and roles of Indigenous peoples in addressing climate change. “Who are the Indigenous peoples? Usually they are seen as a minority. But we have our own government, we have direct relations with mother nature. This is what keeps the balance between all beings,” he said. He noted the cultural and natural resources preserved by Indigenous communities and called for formal recognition and regulation of Indigenous territories. Mendez stressed the importance of effective participation in decision-making processes, utilizing Indigenous traditional knowledge that makes the Amazonia region the “lung of the world.” His message echoed a call for climate fund resources to directly reach Indigenous territories (less than 1 percent of climate finance currently reaches Indigenous peoples) and for full and effective participation in shaping climate decisions, underscoring COP28 as a unique opportunity to integrate traditional Indigenous wisdom into climate action.

Karla Maass, from ENGO CAN, brought attention to the urgency of phasing out fossil fuels and the alarming rise in emissions that exceed planetary boundaries. She emphasized the importance of internationally accountable mechanisms and transparent frameworks for a just transition. Maass called for developed countries to lead the transition in areas such as finance, energy, and food production and highlighted the need for equitable access to funds in Latin America, making finance open, accessible, and fair.

Global Cooling Pledge

As regions around the world experience intensified warming, the importance of sustainable cooling has become a critical discussion point. Maria Azul, Youth Engagement Specialist for the COP28 Presidency, emphasized, “In a warming world, cooling is not a luxury but a necessity.” She elaborated on the consequences of insufficient cooling, stating, “Almost one-third of the world’s population is facing dangerous temperatures for more than 20 days a year,” and warned about the economic repercussions: “Heat stress could lead to 80m jobs being lost resulting in losses of US$2.3 trillion.” However, Azul also highlighted the environmental cost of cooling: “Cooling equipment and appliances account for 7-10 percent of global GHG emissions. This is expected to double by 2030 and triple by 2050.” On a hopeful note, she introduced the Global Cooling Pledge as a concerted effort to tackle these challenges: “Today, I am pleased to highlight how the Pledge will raise ambition and international cooperation on sustainable cooling.” The Pledge, with commitments like “increase access to sustainable cooling by 2030” and “support the phasedown of HFCs,”represents an important collaborative effort towards a cooler and more sustainable future.

Inclusive energy transitions

Later in the day the role of non-party stakeholders in fostering Just, Financed & Inclusive Energy Transitions was discussed in the context of the Just Energy Transition Collaboration (JET-Co).

Climate Champions Campaigns Director, Ramiro Fernanez touched upon the intricacies of the Comprehensive Climate Transition (CCT), stating, “The energy projects need to be inclusive – they are installed in physical spaces that affect the communities.” Advocating for innovative financial solutions, he emphasized the importance of integrating communities into the transition process to “reduce the amount of investment for those projects” and thereby ensuring both regional development and resilience.

Ana Carolina Espinosa, Natural Resource Governance Institute, said a just transition was a “moral imperative but also a practical consideration: if the energy transition is not fair, it will not happen. The transition must consider people’s contextual needs, so that people are involved, perceived benefits, and collaborate for the transition to occur.”

Ricardo Pineda steered the conversation towards the importance of youth involvement and the pressing need to protect environmental activists, referencing the tragic fate of Berta Cáceres in Honduras and stating the urgency that “We cannot talk about just transition without talking about the protection of activists in the frontlines of the conflicts.”

Adding to the conversation, Manuel Pulgar Vidal emphasized that it was imperative to integrate two key elements in the energy just transition: the protection of nature and promotion of responsible and strategic mining.

Global stocktake 

A High-level event on the global stocktake (GST) saw participants discuss crucial enablers and technologies for ambitious, just, and inclusive transitions. H.E. Maria Susana Muhamad, Minister of Environment and Sustainable Development of Colombia, emphasized the importance of safeguarding biodiversity during the energy transition and highlighted the urgent need to mobilize funding, protect people, and promote energy transitions in the face of a climate collapse.

Kishan Kumasingh, Head of Multilateral Environmental Agreements from Trinidad and Tobago, stressed the need to set precedents for future stocktakes and comprehensively consider all aspects of the Paris Agreement, including loss and damage.

Gabriele Pankararu of YOUNGO emphasized the critical role of youth in climate discussions, calling for effective collaboration between governments, civil society, and companies, capacity building, and support for non-state actors. Her Excellency Elba Rosa Perez Montoya, Minister of Science, Technology, and Environment of the Republic of Cuba, underlined the urgency of addressing rising temperatures in Latin America and the Caribbean and the need to incorporate the concerns of developing countries into the GST process, including strengthening implementation measures and financial goals, and emphasizing the importance of the Loss and Damage fund within GST. She also stressed the need to preserve the fundamental principles of international climate negotiations within the GST framework.