COORDINATED BY ECLAC: STUDY BEGINS ON THE ECONOMICS OF CLIMATE CHANGE IN CENTRAL AMERICA.

(San Pedro Sula, 27 May 2008) Estimates indicate that Central America produces less than 0.5% of the planet’s carbon dioxide, but is one of the regions most vulnerable to the effects of climate change.

Rising atmospheric temperatures and sea levels and the decrease and instability of rains affect production, infrastructure, and the population’s means of subsistence and health. Moreover, the capacity of the environment to provide essential services may diminish gradually, while droughts and hurricanes intensify.

If Central American societies do not take steps to address these problems, what will be the economic impact on the population? What will be the toll on fiscal budgets of responding to the consequences? How will the region deal with the effects of climate change on people’s health? What options does Central America have to adapt, and how much will they cost?

Faced with these issues, environmental officials in the region and their integration body, the Central American Commission on Environment and Development (CCAD), ECLAC’s subregional headquarters in Mexico, and the United Kingdom’s Department for International Development (DFID) announced the undertaking of a study on The Economics of Climate Change in Central America, to analyze the challenges, benefits and costs of mitigating and adapting to climate change.

This initiative is borne out of the concern of the Presidents of the Central American Integration System to develop strategies to face the impact of global warming caused by carbon dioxide emissions, as announced today in the context of the Summit on Climate Change and Environment.

The study seeks to prompt discussion over climate change, integrating economic and social decision-makers with scientists and environmental experts, and alert society in general about the seriousness of the situation. It also hopes to stimulate debate over alternative actions at a national and regional level that must be taken urgently in a sustained manner.

The study will use the general methodological guidelines of the Stern Report on the economic impact of climate change in the world, adapting it to the region.

The research will include an analysis of the global context, highlight the possible evolution of emissions and the world economy, and set forth macroeconomic scenarios for Central America. In addition, studies will be carried out on the impact and costs for climate-sensitive sectors, such as water, agriculture, health, poverty and extreme natural phenomena. These studies will serve as input for a model of integrated valorization that will estimate the economic impact in the region, enabling proposals on adaptation policy options with possible benefits for mitigation.

Given its complexity and depth, the study may take an estimated 15 months to elaborate at a cost of approximately US$1.8 million. The British government, through its cooperation agency, will support the project initially with a million dollars. ECLAC will be responsible for the technical coordination, while Central American nations will contribute with their personnel to accompany the implementation of the project’s different activities.

The study for Central America is another of a series of similar initiatives presently being carried out, such as the study The Economics of Climate Change in Mexico, in which ECLAC also participates.

There is also information exchange with current studies in Brazil and the preliminary study on the Andean Community of Nations (CAN).

ECLAC is supporting the negotiation of another similar study for the Caribbean.

The study for Central America will likely benefit from the results of the Mexican case (2008), and contribute to a regional appreciation of the economic impact of climate change in Latin America and the Caribbean.

For more information, please contact Pedro Cote Baraibar, Coordinator of Communications at ECLAC’s Mexico office. Telephone:(+52 55) 5263 9715 and mobile (52 1 55) 2109 7227. Email:  pedro.cote at cepal.org