He climate change could cost Latin America almost a fifth of its Gross Domestic Product (GDP) by the end of the century if new policies are not adopted to curb its impact, according to a report by Moody’s Analytics Posted this Monday.
The analysis examined three possible scenarios for the region, taking into account the costs of the physical consequences of climate change, damage to infrastructure, health, as well as the costs of policy interventions aimed at reducing the impact of climate change.
Without new policy measures, Moody’s forecasts a steady decline in GDP, which will lose 10% in 2075 and end the century down 16% as the region loses production capacity starting this year and Losses increase at an ever-increasing rate.
The report calls it a “nightmare scenario.”
“The Latin American countries that would be most affected by climate change are the major producers and consumers of fossil fuels: Venezuela, Colombia, Brazil and Mexico,” the report states.
Latin America’s economic output suffered losses in all three scenarios analysed: immediate policy action with a goal of zero emissions by 2050, policies delayed until 2030 but then accelerated, and no new policy to curb climate change.
“Early policies are the most effective, since they record the lowest losses,” according to Moody’s, which predicts in this case a inflation higher during the first 50 years and production losses of less than 4.5%, which would stabilize at 3.5% in 2100.
In a late policy scenario, Moody’s expects production to decline by more than 6% before recovering to a 5% loss in 2080.
Production losses would accelerate and worsen between 2030 and 2060 as decarbonization progresses, with much higher inflation from more intensive prices and tariffs.
