One out of every four loans approved by CAF promotes green financing
OREANDA-NEWS. December 10, 2015. Latin America is only responsible for 12.5% of emissions worldwide, but its agricultural sector lost USD 11 billion between 2003 and 2013 due to natural disasters, according to the Food and Agriculture Organization (FAO) of the United Nations.
Unless corrective measures are taken, the region is likely to see lower rainfall in Patagonia, central Brazil, the Caribbean and Central America; an increase in droughts throughout the territory, which will reduce agro-industrial production and lower Latin America's productive capacity; more tropical cyclones; and a rising sea level that will endanger the populations settled along the shoreline; to name just a few of the negative impacts of an increase in global temperature.
The necessary financing to cause a transition toward low-emission and climate-resilient economies is estimated at some 1 trillion dollars a year through 2050. Therefore, in order to implement this new model, the commitment of all stakeholders, from governments and the private sector to multilateral organizations and civil society, will be essential.
In its strategic approach, CAF-development bank of Latin America-is geared toward mobilizing international resources to support actions to mitigate emissions and measures to adapt to changing climate scenarios, as well as helping its member countries to formulate climate strategies and policies. In fact, CAF has contributed close to USD 1.5 billion in the last 10 years. And in 2014 alone, the institution's green financing totaled USD 2.81 billion, representing one out of every four of all approvals for that year.
"Green financing accounted for 24% of CAF's approvals in 2014. By 2020, we aim to reach 30%, in order to support the countries of Latin America in the process of transition to low-carbon, climate-resilient economies," explained Enrique Garc?a, executive president of CAF.
Garc?a added that: "contrary to what tends to be assumed, it is proven that 'green' investments increase the competitiveness and productivity of countries, are profitable and can even represent a boost to national economies, an important aspect in the global context of low growth, with the opportunity to generate more and better jobs."
These and other issues will be addressed today on CAF Day, as part of the meetings being held at COP21. Representatives of environmental organizations, development banks, the private sector and public representatives will meet to discuss green financing, adaptation projects and cities resilient to climate change, among other topics.
The attendees at the conference, which will be held at the Paris Marriott Ambassador Hotel, include Luis Enrique Berrizbeitia, executive vice president of CAF, Hela Cheikhrouhou, Executive Director of the Green Climate Fund, Anne Paugam, CEO of the French Development Agency, and senior representatives of the environmental ministries of several Latin American countries.
Some of the
activities in which CAF is participating to improve the efficient
use of natural resources like water and other initiatives to
mitigate the impact of climate change in Latin America
- Production of "Carbon and Water Footprints" in the city of Lima, La Paz, Santa Cruz de la Sierra, Tarija, Quito, Guayaquil, Loja, Fortaleza, Recife and Cali.
- Implementation of pilot projects for mangrove conservation, "Panama Bay Mangrove Urban Park," for the city's coastal resilience in response to coastal erosion by tides and the rising sea level.
- "Fire-Free Amazonia" project for conservation of the Amazonian forests in Brazil, Bolivia and Ecuador.
- Preparation of the "Climate Change Vulnerability Index for the Region of Latin America and the Caribbean." The index assesses the risk of exposure to climate change and extreme phenomena with respect to current conditions and the country's capacity to adapt to the potential impacts of climate change.
- Technical assistance for the design and structuring of Nationally Appropriate Mitigation Actions (NAMAs). Specifically, the governments of Argentina and Colombia were supported in the design of the PROBIOMASA and coolants NAMAs, respectively. The government of Chile is currently being assisted in the design of the sustainable transport NAMA for the Green Zone of the Municipality of Santiago, and the government of Panama is being assisted in the design of the urban mobility and demand-based energy efficiency NAMAs, among other initiatives.
- Design and implementation of innovative instruments of climate financing. One example is performance-based climate financing facility, an initiative that is implemented in collaboration with the German Development Bank (KfW) with funds donated by the European Union. Through the mechanism, sustainable, low-carbon development is encouraged in the sector, by implementing specific and concrete mitigation measures for which a non-refundable economic incentive will be provided. For the implementation of two pilot mechanisms, there is EURO 10 million. We are currently implementing the mechanism in Ecuador's urban solid waste sector and considering the possibility of implementing the second mechanism in Mexico's industrial sector, specifically for energy efficiency measures.