CAF Report stresses challenges and opportunities for Peru amid climate and biodiversity crisis

CAF—development bank of Latin America and the Caribbean—has presented in Lima its Economy and Development Report (EDR) entitled "Global Challenges, Regional Solutions: Latin America and the Caribbean facing the climate and biodiversity crisis." This report provides insights on issues related to climate change and biodiversity loss that impact Peru and the entire region.

CAF's report was presented at the B.A.P. Carrasco Naval Base in Callao, specifically on the Polar Oceanographic Vessel, which conducts scientific research along the Peruvian coastline and Antarctica, in an event that brought together government leaders, economic development experts, scholars, civil society members, and CAF representatives. The study sheds light on a set of relevant data for Peru that are crucial for the nation's future.

At the meeting, CAF Executive President Sergio Díaz-Granados noted: "Peru, like many nations in Latin America and the Caribbean, is facing a climate crisis that jeopardizes not only its natural environment, but also the stability and prosperity of its people. The challenges of climate change are undeniable and impinge on all layers of society. Addressing them requires the involvement of the government and the entire Peruvian society, urging collaboration and implementation of policies and practices that foster biodiversity conservation, curbing carbon emissions, and climate change adaptation. With this report and our goal of becoming the Green Bank of the region, we bring inputs to a debate that should be a priority for all."

Furthermore, Agricultural Development and Irrigation Minister Jennifer Contreras Álvarez noted that as part of the Government's policies, the sector is part of a multi-sectoral effort involving various ministries and institutions, with measures to address the challenges of climate change, including, e.g. prevention actions for El Niño phenomenon in the north and south of the country.

Peru and the Impacts of Climate Change

The report stresses that Peru is highly vulnerable to climate change impacts, due to its geography and socio-economic conditions. In recent years, there has been a growth in the frequency of extreme weather events in the country. From 1980 to 1999, there was an average of 1.3 extreme events per year, while from 2000 to 2021, this number grew to 2.7 events per year. This has led to a surge in the number of people affected, from 253,000 annually to 455,000 in the same period.

One worrisome phenomenon is the degradation of tropical glaciers in Peru caused by global warming. Although the country is home to most of these glaciers worldwide, their coverage has significantly shrunk in recent decades. This has serious implications for the availability of water resources and for the tourism economy, as both sectors rely heavily on these ecosystems.

"The EDR also stresses that climate change adaptation in Peru can have a positive impact on social inclusion and economic growth. Adopting sustainable agriculture practices, investments in adaptation infrastructure, disaster risk management policies, and regulatory measures are crucial to address these challenges," said Pablo Brassiolo, co-author of the report and chief economist of the Socioeconomic Research Department at CAF.

Peru has taken steps in the right direction in its National Climate Change Adaptation Plan in 2021. This plan focuses on key sectors including healthcare, fishing and aquaculture, agriculture, water, and forests. Implementation will foster sustainable practices and preservation of the much needed ecosystems.

Greenhouse Gas Emissions

The EDR also discusses greenhouse gas (GHG) emissions in Peru and how they impact climate change mitigation. In 2019, the nation accounted for 2.5% of the total emissions in Latin America and the Caribbean. While Peru's per capita emissions are below the global and regional average, we need to address key emission sectors.

The EDR claims that the change in land use and the agricultural sector are the main culprits of emissions in Peru, accounting for 42% of the total. To counter these emissions, we need to take measures to preserve ecosystems and boost productivity of the agricultural sector with a sustainable approach.

Ecosystems and Biodiversity in Peru

The EDR stresses the biodiversity wealth of Peru, one of the 17 mega-diverse countries worldwide. However, we are losing this biodiversity at an alarming rate due to changes in land use. The preservation of ecosystems is critical, as they provide protection against extreme weather events, regulate local climate and absorb carbon dioxide from the atmosphere. Peru boasts tremendous natural capital, with 69% of its area in a natural or semi-natural state, above the regional average.

The preservation of these ecosystems is pivotal for Peru's sustainable development, as they support crucial economic sectors such as fishing, agriculture, and tourism. The creation of protected areas is one of the common policies to preserve natural capital, and Peru holds 18% of its land and 8% of its maritime area as protected zones. "Peruvians play a pivotal role in mitigation and adaptation, and effective policies can have a positive impact on economic growth and social inclusion." The preservation of ecosystems and biodiversity is crucial for the nation's sustainable development, and the implementation of appropriate policies is key to ensuring a better future for generations to come," said CAF , Socioeconomic Research Director Ernesto Schargrodsky.

The presentation of the EDR in Peru also featured Director General of Captaincies and Coastguards Vice Admiral Rodolfo Sablich Luna Victoria, CAF North Regional Manager Santiago Rojas Arroyo, MINAM Climate Change and Desertification General Director Milagros Sandoval, Research Director at the University of the Pacific Johana Kamiche, Finance Leader for Conservation at the WWF Claudia Yep, and MEF Director General of International Economic Affairs, Competition and Productivity José La Rosa.

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