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Damage could cost region US$100B – IDB warns
Urgency of climate action in Latin American, Caribbean cannot be overstated…
Kaieteur News -If urgent action on climate change is not taken in Latin American and Caribbean (LAC) nations, the damage could cost the region US$100B annually by 2050. This was noted by the Inter-American Development Bank (IDB), one of Guyana’s key partners in strengthening its legislative and regulatory framework for the oil industry.
Mauricio Claver-Carone, President of IDB
In its November 2021 report titled: IDB Group and Climate Action-Position Paper (COP26), the IDB stressed that the devastating effects of climate change and the action needed cannot be overstated. In fact, the IDB noted that climate change is already considered one of the major disruptors of agriculture and food systems, while noting that some of the worst impacts on sustainable development are expected to be felt among those whose livelihood depends on agriculture and the coasts.
The financial institution said this reality makes it so that, despite the socioeconomic setback generated by the COVID-19 crisis, 14 of its borrowing member countries have updated their Nationally Determined Contributions (NDCs) since first submitting to the United Nations Framework Convention on Climate Change (UNFCCC) while adding that, to date, six countries already have Long-Term Strategies (LTS) in place.
In spite of the foregoing, the IDB said the technical and financial needs of LAC countries to transition to decarbonized climate-resilient economies are varied and vast. It stressed that investment is needed to decarbonize infrastructure, halt and reverse deforestation, develop and implement policies that manage climate risk and ensure the transition is just and inclusive, manage its extractive sector, and engage the private sector as a critical actor in climate action.
Expounding further, the IDB said, “LAC is ready for ambitious climate action. Nine countries have pledged net-zero targets, and this number is continuously growing. That is why we are actively supporting our clients in the updating of their NDCs and development of LTSs and integrating climate factors in the formulation of country and sector strategies. These are essential country- and client-led processes that will build the roadmaps our region needs for a decarbonized and climate-resilient future.”
The IDB Group in particular said it understands the challenge ahead and, for this reason, it has traced a roadmap that will take country-specific priorities and needs as a basis, and strategically intervene in ways that support further Paris Agreement alignment. The IDB said it is already working in this direction through several actions, one of which includes systematic incorporation of long-term decarbonization and climate resilience objectives in sector and country strategies, ensuring they consider transition risks, contributing to a just transition, and tooling to address the vulnerability of the country and sector to the impacts of climate change.
The IDB is also working towards strengthening collaboration between its public and private arms in ways that help garner the multi-stakeholder support countries need to trace socially legitimate, technically robust, and financially viable net-zero pathways. It has also increased efforts to provide technical and financial support to governments and private companies, to implement decarbonization technologies and develop decarbonization financing schemes.
With respect to its fiscal support to climate change, the IDB Group was keen to note that it delivered almost US$4.9 billion in Climate Finance, amounting 29% of total lending volume. In 2020, it said COVID-19 redirected lending towards urgent fiscal and social measures, thereby limiting opportunities for climate finance.
Nonetheless, the IDB Group said its active role in promoting a green and sustainable economic recovery has paid off, while adding that in 2021 it is observing an uptick in clients’ interest for projects related to policies for a green and resilient economy, and new investments in low-carbon technologies.
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