63400 POVERTY THE WORLD BANK REDUCTION AND ECONOMIC MANAGEMENT NETWORK (PREM) Economic Premise JUN 2011 JULY 010 • Numbe 61 • Number 18 Social Implications of Climate Change in Latin America and the Caribbean Dorte Verner Climate change is the defining development challenge of our time. More than a global environmental issue, climate change is also a threat to poverty reduction and economic growth and may unravel many of the development gains made in recent decades. Latin America and the Caribbean account for a relatively modest 12 percent of the world’s greenhouse gas (GHG) emissions,1 but communities across the region are already suffering adverse consequences from climate change and variabil- ity (De la Torre, Fajnzylber, and Nash 2009). As highlighted in “Reducing Poverty, Protecting Livelihoods, and Building Assets in a Changing Climate” (Verner 2010), climate change is likely to have unprecedented social, economic, environmen- tal, and political repercussions. Assumptions and Analytical Framework health, lack of education, social marginalization, and lack of ac- for Assessing the Social Implications of cess to credit and insurance. Although livelihoods have con- Climate Change stantly adapted to change throughout history, it is very likely that the impacts of climate variability and change will push Climate change compounds existing vulnerabilities by eroding poor people beyond their capacity to cope. It is a fact that many livelihood assets. For the poor in particular, the detrimental ef- indigenous peoples in LAC have already reached this point fects of climate change on the environment erode a broad set of (Kronik and Verner 2010). livelihood assets—natural, physical, financial, human, social, The progression of cause and effect sketched in figure 1 and cultural. The resilience of the poor to disaster is already shows how GHG emissions resulting from human activity are low. Many depend directly on fragile natural resources for their linked to their environmental impacts (step 1). This environ- livelihoods and well-being, and many live in environmentally mental degradation affects the availability and quality of wa- fragile areas that are especially prone to natural hazards such as ter for human consumption (including domestic, agricultur- drought, floods, rising sea levels, and landslides. When circum- al, and industrial use and power generation), as well as stances change for the worse, the poor are hard put to adapt. For terrestrial and marine flora and fauna ecosystems. The envi- many, the effects of climate change are compounded by other ronmental impacts have social implications, as presented in pressures, including a growing scarcity of land viable for agri- step 2, affecting people’s livelihoods, food security, and health. culture, joblessness, difficulty obtaining enough food, poor Excessive stress on those determinants of human well-being 1 POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK    www.worldbank.org/economicpremise Figure 1: Climate Change and Its Social Implications key climate change indicators in LAC: • rising air and sea surface temperatures • increasing intensity of mitigation natural hazards • changing precipitation • rising sea levels environmental impacts: • ecosystems • biodiversity STEP 1 • land productivity • fisheries • freshwater availability • glacier retreat • Amazon dieback social implications • food security STEP 2 • livelihoods • health • poverty • inequality adaptation • migration • conflict Source: Verner 2010. will increase poverty and income inequality. It may also cause Climate Variability and Change in Latin migration to swell and has the potential to heighten the risk of America and the Caribbean conflict. To understand the social implications of climate variabili- Precise projections about climate variability and change in the ty and change, it is useful to identify risk factors and protec- Latin America and Caribbean (LAC) region cannot be made. tive factors. Although not necessarily causal, these factors can Too little detailed historical information is available on the re- be important predictors, and understanding them can help gion’s weather conditions, sea levels, and extreme events to al- shape policies and programs to strengthen people’s resilience low robust regional climate models to be developed, and global and capacity to adapt. Risk or vulnerability factors increase climate studies yield relatively few robust statements and pro- the likelihood that a person or community will experience jections for the region (IPCC 2007a). negative outcomes: experience shows that the risks associated Nonetheless, the available evidence clearly shows that cli- with climate change increase when combined with poverty, mate change is taking place and gathering speed in the region: poor governance, and poorly maintained infrastructure. How • Projected temperature changes. Overall, like the world as a vulnerable people are to these risks often depends on local so- whole, the LAC region is projected to warm. Most of cial, political, and economic realities and government poli- South America is forecast to warm more than the global cies. average, the exception being the Southern Cone. This im- Protective factors increase the likelihood that a person or plies that, over most of the region, temperatures in all sea- community will make a successful transition. Important fac- sons will continue to rise during the 21st century. Heat tors that protect against the negative impacts of climate change waves are likely to be more frequent and more intense, and exist at the household, community and societal levels, and in- the higher temperature level in general will tend to favor a clude good public policies, such as provision of public health longer warm season, with possible related extreme events services, education, social protection schemes, and the like; so- such as hurricanes. In the high Andes, the temperature cial connectedness, whether to relatives, neighbors, civil society rise is projected to be greater than the mean values for the organizations (CSOs) or government agencies; solid and well- region. This means that less water will be stored because maintained infrastructure; good governance; and healthy pub- snow, ice, and glaciers will continue melting. In the Ama- lic finances. zon region, the expected higher temperatures are likely to 2 POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK    www.worldbank.org/economicpremise worsen the destructive effects of deforestation and in- this century will generally be in the more extreme direc- crease the risk of wildfires. tion, that is, more intensive precipitation, longer dry spells • Projected precipitation. The patterns of probable change and warm spells, heat waves with higher temperatures show dry areas becoming dryer and wet areas becoming than generally experienced up to now, and more numer- wetter.2 Mean annual precipitation is projected to decrease ous, severe hurricanes. According to the International over northern South America near the Caribbean coasts, Panel on Climate Change (IPCC 2007a), further increases as well as over large parts of northern Brazil, Chile and Pa- are expected in the number of floods and droughts and in tagonia, and to increase in Colombia, Ecuador, Peru, the intensity of tropical cyclones (see figure 2). around the equator, and in southeastern South America. The countries in the Caribbean and the Gulf of Mexico, The mid-continental areas, such as the inner Amazon and which are often assailed by intense hurricanes, can expect these northern Mexico, are projected to become dryer during storms to become even fiercer as a result of climate change. the summer months, with increased risk of droughts and Other important issues are the destruction of coral reefs and forest fires. Annual precipitation is likely to decrease in the the growing threat to southeast Pacific fish stocks due to in- southern Andes, with relative changes being largest in creasing sea surface temperatures. A rise in sea level would summer. How annual and seasonal mean rainfall will likely bring flooding to low-lying regions such as the coasts of El change over northern South America, including the Ama- Salvador and Guyana and could exacerbate social and political zon forest, is uncertain. tensions in the region. • Extreme events. Most areas of LAC have experienced several For the Andean countries, the most momentous climate ef- instances of severe weather in recent decades, with torren- fects include major warming, changes in rainfall pattern, rapid tial rain and hurricanes causing thousands of deaths and tropical glacier retreat, and impacts on mountain wetlands. damaging properties, infrastructure, and natural resourc- These effects will combine with increasing precipitation vari- es. These events are widely interpreted as reflecting cli- ability to significantly affect water availability (IPCC 2007c). mate change and increased variability, but no formal scien- These effects may lead to greater migration and risk of conflicts. tific detection of such a relationship at the regional level In the Amazon region, the most pressing issue is the risk has been made.3 Neither is there evidence that the recent that the forest will die back—that rising temperatures and de- extreme events are less or more severe than those that may creases in soil moisture in the eastern Amazon region will lead be experienced in the future. That said, the available mod- to the replacement of tropical forest by savannah. When that els clearly suggest that the changes that will take place over danger is combined with the deforestation caused by human Figure 2: Key Climate Change Hot Spots for Latin America coral reefs and mangroves seriously threatened with warmer SST under the worst seal-level rise scenario, mangroves are very likely to disappear from low-lying coastlines Amazonia: loss of 43% of 69 tree species by the end of 21st century; savannization of eastern Amazonia Cerrados: losses of 24% of 138 tree species for a temperature increase of 2°C reduction of suitable lands for coffee increases in aridity and scarcity of water resources sharp increase in extinction of: mammals, birds, butterflies, frogs, and reptiles by 2050 water availability and hydroelectric generation seriously reduced due to reduction in glaciers Ozone depletion and skin cancer severe land degradation and desertification Rio de la Plata coasts threatened by increasing storm surges and sea-level rise increased vulnerability to extreme events Note: Areas in red correspond to sites where biodiversity is currently severely threatened and this trend is very likely to continue. Source: Verner (2010) based on IPCC (2007b). 3 POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK    www.worldbank.org/economicpremise activities, the outlook is dire. If present deforestation trends nity transitions, climate change is also affecting the psychologi- continue, 30 percent of the Amazonian forest will have disap- cal transition—a period of breaking free of traditional patterns peared by 2050. That, with the transformation of tropical rain- of thinking and resolving problems, of increased competition forest into dry grassland savannah, would lead to the extinction over resources, and of emphasis on the present over the future. of a great number of plant and animal species unique to the The poor and vulnerable who live a day-to-day existence and area. lack the assets to allow long-term planning have little experi- The overall effects of climate change will be negative in the ence addressing these issues; they typically behave in ways that LAC region. There will, however, be exceptions, particularly are rational for their objectives and perceptions of risk, which with respect to increasing temperatures. In the southernmost by necessity employ a very short-term perspective. Planning for part of South America and in the Andes, rising temperatures a future with a changing climate is extremely difficult when an will expand the range of some crops, and the higher concentra- individual’s or a household’s asset base is barely sufficient to tion of carbon dioxide (CO2) in the atmosphere will increase survive on from day to day, especially given frustrations that yields. But elsewhere, crops such as coffee and maize are already arise from economic turbulence, blocked participation, and being grown in close-to-optimum temperatures, so temperature marginalization in the community. increases, especially if coupled with declining rainfall, will lead Although fraught with risks, climate variability and change to significant yield reductions. Higher temperatures not only also present opportunities for households, communities, local will affect plant growth, but will also cause more heat- and dis- and national governments, society, and the economy. Decisions ease-related stress and mortality for livestock and humans alike. about adaptation strategies, developing skills, and engaging with the broader civic community will determine the quality The Road Ahead of life for the next generation. With more knowledge about Although many of the effects of climate variability and change how climate change affects the poor and vulnerable, govern- are already unavoidable, much scope remains for human agen- ments may be better able to understand and serve this group. If cy and ingenuity in crafting mitigation strategies to address the policy makers do not invest now in mitigation and adaptation, causes of climate change itself and in adapting to address the they will miss a unique opportunity to equip the poor and vul- consequences.4 An optimal national strategy would employ nerable populations with the tools to break the downward spi- both mitigation and adaptation efforts and should embody ral of poverty and inequality and become drivers of growth and good governance and include public voice, representation, and sustainable development. social accountability. About the Author It is critical that policy makers in LAC address the social is- sues related to climate change. Even if global mitigation efforts Dorte Verner is the Climate Change Coordinator in the Middle improve, the climate trends that are already under way have East and North African Region of the World Bank. Previously, considerable momentum and will dramatically affect econom- Ms. Verner was a Senior Economist in the Latin America and Ca- ic, human, and social development for years to come. Thus, as ribbean Region and led the Social Implications of Climate Change the Stern Review on the Economics of Climate Change argues, it is program in the Latin American and Caribbean Region. She has paramount that climate variability and change become fully published extensively in the areas of poverty and on rural and integrated into development policy (Stern 2007). Social devel- social development issues. Most recently she has written books opment is key to efforts to reduce the loss of livelihood systems, and papers on climate change in relation to indigenous peoples, forced migration, and potential conflicts. Indeed, an overriding agriculture, health, migration, poverty, and rural issues. Before message that emerges from the study that this note describes is joining the World Bank in 1996, Ms. Verner worked as an econ- that almost all of the policies, investments, and institutional omist at the Organisation for Economic Co-operation and Develop- reforms advocated here are good development policies. The re- ment (OECD) Development Center and as a researcher at the Eu- alities of climate change may give them added value, but, in ropean University Institute in Florence, the Sorbonne in Paris, and most cases, they would have significant benefits even in its ab- the University of Aarhus in Denmark. She holds a PhD in mac- sence. Thus, when devising adaptation policies, they should be roeconomics and econometrics from the European University “climate-proofed” in the sense that they enhance resilience and Institute and a postgraduate degree in economics from the Uni- enable adaptation. For example, physical infrastructure is in versity of Aarhus. dire need of improvement, both to enhance people’s living con- Notes ditions and economic opportunities and to enable people to cope with climate change. At-risk communities need special at- 1. WRI (2005). The figure falls to 6 percent of global emissions tention because risky climate situations are costly not just to if emissions from energy use only are taken into account. When the households affected, but to society at large. Although this land-use changes are included, the proportion rises to 12 per- note focuses on the external aspects of household and commu- cent of the world’s GHG emissions, mainly as a result of the 4 POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK    www.worldbank.org/economicpremise large-scale deforestation taking place in the region. Yet, despite Change: An Overview. World Bank Latin American and Carib- the region’s small contribution to global warming, its people bean Studies. Washington, DC: World Bank. still find their well-being, homes, and livelihoods threatened by IPCC (Intergovernmental Panel on Climate Change). 2007a. climate variability and change. The inverse relationship be- Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the tween responsibility for global warming and vulnerability to its IPCC. Geneva: IPCC. effects is often ignored (UNDP 2007). ———. 2007b. Climate Change 2007: Impacts, Adaptation, and 2. There will be local exceptions to these broad tendencies, but Vulnerability. Contribution of Working Group II to the Fourth existing models do not give robust results for every part of this Assessment Report of the IPCC. Geneva: IPCC. large region. In particular, there are still many unresolved issues ———. 2007c. Synthesis Report: An Assessment of the Intergovernmental related to changes in the Amazonas, because important aspects Panel on Climate Change. Valencia, Spain, November 12–17 of the interaction between vegetation and climate are still not Kronik, J., and D. Verner. 2010. “Indigenous Peoples and Climate well understood. Change in Latin America and the Caribbean.” World Bank. 3. To formally attribute change or occurrence of particular http://www.worldbank.icebox.ingenta.com/content/wb/ events to a cause, a statistically sound number of events must bk18237. normally be considered. By nature, extreme events are rare at a Stern, Nicholas. 2007. Stern Review on the Economics of Climate Change. Cambridge, UK: Cambridge University Press. given location. Events that occur over a large geographical re- UNDP (United Nations Development Programme). 2007. Fighting gion, such as LAC, cannot simply be lumped together for study Climate Change: Human Solidarity in a Divided World, Human because the causal chains leading to them most likely differ Development Report 2007/08. New York: Oxford University from event to event and from location to location, which pre- Press. cludes a simple statistical treatment of the data. Therefore, the World Bank. 2006. “Project Document for Regional Implementa- recent IPCC reports have very little to say about recent changes tion of Adaptation Measures in Coastal Zones (SPACC).” at a regional level, and even less about the national or provincial World Bank Latin America and Caribbean Region/Global level, and their possible links with global climate variability and Environment Facility. change. ———. 2008. “Poverty Data: A Supplement to World Development 4. The essence of mitigation policies should be to price carbon Indicators 2008.” Washington, DC: World Bank. and carbon equivalent gases to reflect their true costs—includ- WRI (World Resources Institute). 2005. “Climate and Atmo- ing social costs. This note does not address these policies in any sphere—CO2 Emissions: Cumulative CO2 Emissions, 1990– 2002.” Earthtrends. http://earthtrends.wri.org/text/ climate- detail. atmosphere/variable-779.html. References Verner, D. 2010. Reducing Poverty, Protecting Livelihoods, and Build- ing Assets in a Changing Climate. Washington, DC: World Bank. De la Torre, Augusto, Pablo Fajnzylber, and John Nash. 2009. Low http://elibrary.worldbank.org/content/book/9780821382387;j Carbon, High Growth: Latin American Responses to Climate sessionid=52r6hrhl1dim7.z-wb-live. The Economic Premise note series is intended to summarize good practices and key policy findings on topics related to economic policy. They are produced by the Poverty Reduc- tion and Economic Management (PREM) Network Vice-Presidency of the World Bank. The views expressed here are those of the authors and do not necessarily reflect those of the World Bank. The notes are available at: www.worldbank.org/economicpremise. 5 POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK    www.worldbank.org/economicpremise