sustainable development 20 years on from the ... - José Eli da Veiga

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The same applies to the incentive structure implicit in certain trade policies (such as the
importation of used cars or low-efficiency refrigeration equipment) and in policies for promoting
investment in environmentally sensitive sectors (such as mining) when they fail to internalize the
environmental costs of trade and investment decisions. There is an obvious need for greater overall policy
coherence across fiscal, trade, investment and environmental arenas. All the more so as the region’s
current pattern of insertion in the global economy depends on the <strong>sustainable</strong> management of their natural
resource endowments.
The result of not incorporating environmental costs fully is that activities that pollute or
degrade the environment and damage health become more profitable than they would be if their costs
were paid in full. The failure to do so means that these costs are actually being paid by those affected
(in the form of poor health and health-care costs or production losses) and therefore price signals are
incorrect for <strong>sustainable</strong> <strong>development</strong>. Apart from price signals, there are shortcomings in
methodologies for evaluating public and private investments, which exclude environmental and
health costs.
B. PROGRESS WITH SPECIFIC ENVIRONMENTAL ISSUES
1. Climate change
Climate change is a key item on Latin American and Caribbean public agendas because of the impact that
it is expected to have and due to the region’s contribution to greenhouse gas (GHG) emissions.
(a)
The impact of climate change in the region
By <strong>20</strong>50 climate change is expected to have a significant impact on fragile ecosystems (such as
mangroves, glaciers and coral reefs) and the production sectors (especially agriculture) in association with
extreme weather events. It is also expected to take a heavy socioeconomic toll, especially in Central
America and the Caribbean (see map II.1). The estimated costs of damage caused by extreme weather
events in Latin America and the Caribbean over the past 10 <strong>years</strong> are in excess of US$ 40 billion (see
figure II.1). Climate change therefore represents a new challenge to the region’s <strong>development</strong>.
According to the special report of the Intergovernmental Panel on Climate Change (IPCC) on
managing the risks of extreme events and disasters to advance climate change adaptation (IPCC, <strong>20</strong>11),
exposure and vulnerability are key determinants of disaster risk and climate impacts. Exposure and
vulnerability are dynamic, differing in timing and location, and they depend on cultural, economic, social,
geographic, demographic, institutional, governance and environmental factors.