Climate change financing: New challenges for Latin America

19 Oct 2009

Region’s high-level officials of finance, environment along with international experts explore options for long-term climate investments

Rio de Janeiro — Latin America needs enhanced capacities to face a new climate change regime, especially key financial mechanisms that make possible national efforts to reduce the impact of climate change (adaptation), curb greenhouse gas emissions (mitigation) and enable the transfer of new green technologies. This was one of the conclusions at the first day of the meeting Climate Financing and Long-Term National Development Planning in Ibero-America, a high-level debate dedicated to exploring options for the integration of climate change financing into national and regional long-term social and economic development planning.

More than 60 Latin American governmental authorities – from the finance and environment ministries – along with representatives from the private sector and international organizations discussed key challenges to climate change investment and financial flows at the national and regional levels. The two-day meeting was organized by UNDP and the Inter-American Development Bank (IDB) to enable countries and experts to identify already available and future financing options on climate change and to discuss the role of national and regional development banks and international organizations in these efforts.

“Climate change is the defining human development challenge of the 21st century,” said Veerle Vandeweerd, director of UNDP’s Environment and Energy Group. “If we do not address this squarely and successfully now, we can expect international poverty reduction efforts to fail.”

“Permitting countries that have played little or no role in causing the problem to adapt to the inevitable consequences of a changing climate is crucial,” Vandeweerd continued. “We have to work in partnership so countries can prepare themselves for the Copenhagen Conference of the Parties and beyond.”

“It is critical that Latin America countries discuss financing barriers and the nature of financial instruments to orient public and private investments for mitigating and adapting to climate change as well as how to access current and new multilateral funds to face climate change,” said Juan Pablo Bonilla, coordinator of IDB’s Sustainable Energy and Climate Change Unit. “Finance, development and environment ministers have a crucial role to play: they will need to have pragmatic and comprehensive frameworks to catalyze climate investments with resources from international financial mechanisms – and they will also need to reinforce national budgetary planning.”

Along with UNDP and the IDB, the Economic Commission for Latin America and the Caribbean (ECLAC) and the World Bank presented several initiatives, showcasing the outcomes of such climate change funds.

The meeting will also discuss the impact of the current negotiations of the United Nations Framework Convention on Climate Change (UNFCCC) on climate financing for the region.

In Latin America and the Caribbean the cost of climate-related disasters exceeds US$5 billion per year, and the poorest are the most vulnerable to the adverse effects of climate change. Since tackling such problems will demand great resources, the discussion on finance mechanisms is crucial, particularly for developing countries, which are most affected by the climate change.

Under the UNFCCC mandate, member states are negotiating the post-2012 financial framework to support developing countries to address climate change.  For this reason, climate financing is a key topic in the path towards achieving a deal in Copenhagen in December 2009. Especially vital for developing countries is a fair, ambitious deal on climate financing that will enable the implementation of the Convention and its objectives.

Contact Information

Carolina Azevedo, UNDP, Cell (Rio):  + 55 (21) 8292 3118; Cell (N.Y.): +1 917 208 3732; carolina.azevedo@undp.org

Janaina Goulart, IDB, Tel (Brasilia): +55 (61) 3317-4285 or Cell (Brasilia): 8115-0703, janainag@contractor.iadb.org