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DECEMBER 10, 2008, AT 10:00 AM WASHINGTON, DC TIME (3:00 PM GMT/UTC)
World Bank
Latin America and the Caribbean Region
News Release No. 2009/161/LAC
Contacts:
Sergio Jellinek (202) 294-6232
[email protected]
Gabriela Aguilar (202) 473-6768
[email protected]
GLOBAL FINANCIAL & CLIMATE CRISES:
New Report Urges Fresh Look at Latin American Solutions
WASHINGTON, DC, December 10, 2008 – In the midst of the most severe global financial crisis in
decades, the World Bank today urged the international community to look to Latin America for
innovative solutions to avert a climate crisis. The region is in a position to lead middle income countries
in reducing emissions from deforestation, breaking the impasse on hydropower development, improving
energy efficiency, and transforming urban transport, a new Word Bank study concludes.
“Such an approach could simultaneously support economic recovery and encourage growth in areas that
mitigate the impact of climate change. By promoting a shift towards low carbon economic activities,
governments can not only help avoid dangerous climate change impacts but can also make the region
more competitive, contributing to a faster recovery from the current economic slowdown,” says Pamela
Cox, World Bank Vice President for Latin America and the Caribbean.
With oil prices falling, World Bank Chief Economist for Latin America and the Caribbean Augusto
de la Torre acknowledges that “increased investments in green technologies are not going to be an easy
sell.” However, he underlines that “there is growing support from businesses, government and civil
society for the idea that the crisis itself provides an opportunity to create incentives for a low carbon
development path.”
“Low Carbon, High Growth: Latin American Responses to Climate Change” released today, is the
World Bank's flagship report on Latin America and the Caribbean (LAC). It explores how the region is
exposed to climate change impacts and what it can do to avert its effects, both unilaterally and with the
incentives of a global climate agreement to be negotiated next year in Copenhagen by the United Nations.
According to the report, LAC, the most biodiverse region in the world, has the resources and the
leadership to be part of the global solution needed to move the world towards a low carbon path.
“The region is suffering the impact of climate change; however, it is not a main source of emissions that
are driving global warming, thanks to its clean energy matrix and its innovative policies to promote low
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carbon growth. Latin America produces only about six percent of global energy-related greenhouse gas
emissions, or 12 percent of emissions from all sources, including deforestation and agriculture,” says the
report, written by World Bank economists de la Torre, Pablo Fajnzylber and John Nash.
This is the first time that the office of the Chief Economist for Latin America has selected climate change
as the main theme of research for the annual flagship publication.
Of the world’s ten most biodiverse countries, five are in the Latin American region: Brazil, Colombia,
Ecuador, Mexico, and Peru. These are also five of the 15 countries whose fauna is most threatened with
extinction.
According to the report, Latin America’s countries and citizens —especially those living in extreme
poverty— are highly vulnerable to the effects of climate change. Developing country engagement must
be based on the understanding that industrialized countries “carry an historical responsibility for the
existing greenhouse gas concentrations causing climate change.” Therefore, a committed Latin
American engagement should be based on the idea that improved environmental management can go
hand-in-hand with economic growth.
“Many of the actions needed to reduce the region’s emissions and adapt to climate change make sense
from economic and social perspectives – and often from a financial perspective as well -- regardless of
climate concerns,” the report emphasizes. Adopting a low-carbon development path will be beneficial for
the region’s competitiveness, especially if the world’s technological frontier moves in the direction of
low carbon technologies.
The region has piloted new technologies and approaches to reduce emissions:
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Mexico’s 2007 National Strategy on Climate Change adopts long-term, nonbinding targets. In the
energy sector, the strategy identifies a total mitigation potential of 107 million tons of
greenhouse gasses by 2014, a 21 percent reduction from business as usual over the next six years.
Brazil is moving towards energy independence through the expansion of alternative energy
sources such as hydroelectricity, ethanol, and biodiesel. Its sugar-based ethanol production is
financially and environmentally sustainable without diverting land from food crops.
Public and environmentally friendly public transport policies demonstrated by Curitiba (Brazil)
and expanded in Bogota (Colombia) are now underway in dozens of cities in the region.
Costa Rica has received worldwide recognition for its efforts to place a financial value on
preserving ecosystems, through several initiatives on “payments for ecosystems services.”
Argentina is moving forward with renewable energy in rural areas which provides affordable
and reliable electricity to communities and has an impact on productivity and jobs.
Despite these innovations, Latin America has been moving to a higher carbon growth path. Based on
current trends, from 2005-2030 the projected growth of per capita CO2 energy emissions in the region is
33 percent (above the world average of 24 percent). The study finds that keeping LAC on a high-growth
and low-carbon path will require a coherent policy framework on three levels:
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1. An international climate change
Some critical impacts of climate change in LAC
architecture that creates enough
momentum and is friendly to Latin
 By 2100, agricultural productivity in South
America’s specific features, including:
America could fall by 12 percent to 50 percent.
clear financial incentives to reduce
 In Mexico, 30 percent to 85 percent of farms
deforestation; the expansion of carbon
could face a total loss of economic productivity by
trading mechanisms to sectors;
2100.
mobilization of financial flows to Latin
 Climate-related natural disasters (storms, droughts
America to facilitate deployment of
and floods) cost, on average, 0.6 percent of GDP
“green technologies;” and the creation of
in affected countries.
a global market for sustainable bio-fuels,
 Hurricane damages will increase by 10 percent to
removing tariffs and other barriers.
26 percent for each 1oF warming of the sea.
2. Domestic policies to adapt to the
 Many Andean glaciers will disappear within the
inevitable climate change impacts on the
next 20 years placing 77 million people under
region’s ecosystems and societies,
severe water stress by 2020.
incorporating climate-related threats into
 Caribbean corals will bleach and eventually die.
the design of long-term infrastructure
Since the 1980s, 30 percent of corals already have
investments, improving weather
died, and all could be dead by 2060.
monitoring and forecasting, enhancing

Increase in risk of dengue, malaria and other
social safety nets so as to allow
infectious diseases in some areas.
households to better cope with climate
 The Amazon rainforest could shrink by 20 percent
shocks, and improving the functioning of
to 80 percent if temperatures increase by 2 to 3oC
land, water and financial markets.
 Large biodiversity losses are expected in Mexico,
3. Domestic policies to exploit mitigation
Argentina, Bolivia, Chile and Brazil.
opportunities to make Latin America part
of the global climate change solution.
Many of the actions needed for mitigation are also good development policies. For example,
increasing energy efficiency often can save money; reducing deforestation has social and
environmental benefits; improving public transport can reduce congestion and local pollution with
impacts on health, productivity and welfare; and expanding off-grid renewable energy can help reach
rural populations without access to electricity.
“If the region moves ‘ahead of the pack’ it could take advantage of international cost-sharing
mechanisms for deploying low-carbon technologies and build new comparative advantages,” says Pablo
Fajnzylber.
The report emphasizes that good adaptation to climate change is an indispensable part of good
development policies and that action is needed from all countries.
“Latin America has demonstrated a consistent commitment to fight climate change beyond political
cycles. Now is the time when the region can act as a leader within developing nations in articulating
constructive global solutions. If governments make the right short-term decisions, it could mean
significant progress towards a more sustainable market economy,” concludes John Nash.
-###For more information about the report and the World Bank’s work on climate change in Latin America,
please visit:
http://www.worldbank.org/lac
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