Climate Change Could Cost Latin America 16% Of GDP This Century, Says Moody's

• Climate change could cost Latin America nearly a fifth of its gross domestic product (GDP) by the end of the century without new policies to curb its impact, according to a Moody's Analytics report published Monday.
• The analysis examined three possible scenarios for the region, accounting for the costs of climate change's physical toll (infrastructure damage, poorer health) as well as the costs of policy interventions aimed at reducing climate change.
• Latin America's economic output sustained losses under all three scenarios analyzed, namely, immediate policy actions targeting zero emissions by 2050, policies delayed until 2030 but then picking up pace, and no new policies to curb climate change.
• If no new policy action is taken, Moody's foresees a steady deterioration in GDP, estimating a loss of 10% by 2075 of the regions GDP, and ending the century with an economic decline of 16% as the region loses production capacity starting this year, and losses mount at increasing rates. Under a late policy scenario, Moody's sees output sinking more than 6% lower before recovering to a loss of 5% by 2080.
• "Latin American countries that would be more affected by climate change are the main fossil fuel producers and consumers: Venezuela, Colombia, Brazil, and Mexico," the report said. This is primarily due to the fact that emissions from fossil fuels are said to be the dominant cause of global warming. As a result, the move to cleaner energy will take a huge toll on these producers.
• Early policy implementation presented the best-performing scenario as it reported the lowest losses. It is therefore suggested that countries push towards early climate control implementation policies to reduce future economic output losses and lower inflation from less intensive prices and tariffs.

(Source: Reuters)