Four years ahead of schedule, the Paris climate change agreement is expected to enter into force next month. Latin American and Caribbean countries played a major role in the diplomatic push to secure the agreement and are now making progress on ratifying it.
As of today, over a dozen countries from the region have also ratified – including its largest emitters, Brazil and Mexico, and also some of its smallest and most vulnerable, Barbados and Belize.
Yet ratification is only an initial step towards implementation. Fortunately, the region has made progress on designing the policies and institutions to implement the agreement. Peru, Brazil, Mexico and Costa Rica were among the first developing countries to put forward voluntary emission reduction pledges starting in 2008.
Given the worsening evidence on global warming, these efforts must be accelerated. The announcement by NASA that 2016 is already on track to be the hottest ever year reinforces a sense of urgency that countries must embrace a transformative agenda to implement the agreement.
Latin America and the Caribbean is already highly vulnerable to climate change impacts including the intensification of flooding, droughts and other natural disasters. Our research indicates that damages in the region caused by these impacts associated with a rise of two degrees Celsius will likely approach $100bn a year by 2050.
At the same time, as the region’s population and economies grow, the demand for sustainable and climate-friendly infrastructure is growing. Thus infrastructure must respond to the risks presented by climate change whilst addressing regional challenges including rapid urbanisation, the need for universal access to basic water, electricity and sanitation services.
We estimate that up to 5 per cent of Latin America’s GDP or roughly $250bn per year will be required to meet future demand for infrastructure.
The Paris Agreement provides unprecedented momentum for ensuring public finance is used to effectively deliver the investment required for transitioning to more prosperous, low-carbon and climate-resilient economies.
The agreement seeks to limit the mean global temperature increase to well below 2 degrees Celsius and to pursue efforts to limit global mean temperatures to 1.5 degrees Celsius.
Countries have a legally binding obligation to submit national climate change plans – called Nationally Determined Contributions (NDCs) – every five years, outlining progressively ambitious actions to reduce emissions and adapt to climate change impacts.
To implement them, developed countries must provide developing countries with the finance and support for capacity building and the transfer of technology. The agreement is also explicit about the need to make finance flows consistent with a pathway towards low emissions and climate-resilient development.
In April this year, governors of the Inter-American Development Bank (IDB) agreed a goal for increasing our climate-related financing to 30 per cent by the end of 2020, and of evaluating all projects for climate risk and resilience by 2018.
We are now poised to take a further step to align activities to the Agreement’s goals and provide countries with the adequate tools, instruments and capacity to ensure NDCs translate into viable investment plans.
This week the IDB Group will launch a new initiative to support countries to implement their NDCs. The initiative aims to provide comprehensive support for countries to transform their national climate commitments into achievable investment plans and mobilize resources for their implementation.
We will work closely with countries to provide a comprehensive package that offers bespoke support that responds to their unique national circumstances and requirements through a national-led process.
A pressing challenge will be integrating the NDCs into countries’ development strategies, investment plans and budgets. This will require strong involvement by ministries of finance, which need to integrate the low carbon and climate resilient agenda into national policy.
The NDCs can help rewire development plans to better respond to the demands of citizens and delivering an inclusive growth agenda. NDC Invest aims to support these efforts by tackling climate change whilst stimulating growth, boosting domestic markets needed to create jobs and for mobilising investment for sustainable infrastructure and landscapes.
This can help ensure greener and healthier cities and more productive rural communities whilst protecting the region’s incredible biodiversity.
The role of civil society, investors and the private sector will be indispensable to implement the NDCs. A 2015 survey by the Pew Research Center says 77 per cent of Latin Americans think climate change is already harming people. Encouragingly, investors and businesses from the region are becoming more proactive about pitching in.
This blog was originally posted by the Financial Times.