Latin American ministers want financial resources to fight climate disasters

On Wednesday, finance ministers from across Latin America and the Caribbean urged the Inter-American Development Bank (IDB) to consider new financial instruments to mitigate the economic shock associated with climate disasters.

At an IDB-sponsored meeting in Washington, Uruguayan Finance Minister Azucena Arbeleche said, “We need products with incentives. “An underdeveloped nation is not going to force itself to choose this path when it faces immediate crises.”

The IDB has traditionally invested up to $10 billion in environmental protection programs, so ministers asked the regional lender to continue supporting these initiatives.

Nigel Clarke, Jamaica’s finance minister, called for “risk transfer tools” that would help Caribbean countries maintain fiscal stability even in the aftermath of catastrophic disasters.

Although Latin America and the Caribbean contributes only a small amount to global greenhouse gas emissions, the IDB predicts that in 30 years these factors – rising temperatures, sea levels and changing climate patterns rainfall – will cost the region between 2% and 4% of its annual GDP.

Caribbean nations, among the hardest hit by rising temperatures, are poised to seek compensation at COP27 climate talks as climate change deals increasingly catastrophic blows to its tourism industry.

The bank predicted a decade ago that by 2050 climate change could cost the region $100 billion a year.

The ministers also reviewed the measures taken by their countries to combat the effects of climate change and economic instability.

Arbeleche from Uruguay said his country was preparing to issue a sovereign bond with interest rates based on environmental measures. According to Jose Antonio Ocampo, Colombian Finance Secretary, the government must diversify its exports beyond oil and develop its ecotourism industry.

It is a primary objective for us to ensure that Colombia no longer depends solely on oil exports, he said.

Summary of news:

  • Latin American ministers want financial resources to fight climate disasters
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Louis R. Hancock