Latin American governments must implement more actions to combat climate change since the recurrence and severity of natural phenomena will lead to a deterioration of productive capacity, Moody’s Analytics warned today, Thursday.
In the text “Latin America under the risk of climate change”, the analysis firm explained that governments, companies, and financial institutions should adopt preventive measures to reduce carbon emissions to mitigate eventual damages caused by climate change.
“One of the recommended strategies is the implementation of an emissions tax,” indicated the document prepared by the director of analysis for Latin America at Moody’s Analytics, Alfredo Coutiño.
“Even though most Latin American countries have adhered to the Paris Agreement on climate change and have committed to reducing emissions, some countries still favor the production and use of fossil fuels,” he added.
Complacency and underestimation of the effects of climate change could cost the region around 6 percent of Gross Domestic Product (GDP) by the middle of this century and nearly 20 percent by the end of the period, according to economic models from Moody’s Analytics, the rating agency’s analytical arm.
In 2021, carbon emissions in Latin America accounted for 4.4 percent of total global emissions, with Brazil, Mexico, and Argentina leading emitters, accounting for about 70 percent of GDP generated in the region, according to the report.
The Economic Commission for Latin America and the Caribbean (ECLAC) estimates economic growth for the region at 1.2 percent in 2023.