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Challenges of Climate Change Adaptation in Central America and Policy Implications for Korea-Central America Cooperation Economic relations, Economic cooperation

Author Seungho Lee, Sungwoo Hong, Jino Kim, Mi Sook Park, and Hyuk Ju Kwon Series 21-07 Language Korean Date 2021.12.30

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   Guatemala, El Salvador, Honduras, and Nicaragua – all located in Central America – have been under the direct influence of climate change due to their geographical characteristics. In these countries, climatic factors including temperature and precipitation patterns have been changing, and extreme weather events such as storms have been frequent. Such climate extremes not only cause massive casualties, but also adversely affect a wide range of sectors, including agriculture, water resources, infrastructure, housing, health and migration, dramatically hindering the sustainable development of these countries.
   As the effects of climate change intensify, there is a growing consensus on the importance of climate change adaptation. In response, the four Central American countries have formulated various policies in order to reduce their climate change vulnerabilities, both at the regional level, mainly through the Sistema de la Integración Centroamericana (SICA), and at the national level. Unfortunately, they have had difficulties in implementing adaptation-oriented policies, given their limited human, financial and institutional capabilities, stemming from complex socioeconomic factors such as the level of economic development, poverty, agricultural dependence, population density, the level of education, and governance.
   The “caravans,” which have received much attention from the international community in recent years, are a symbol of the failure by the four Central American countries to reduce the adverse effects of climate change. Many of these “caravans” leave their homes in Guatemala, El Salvador, Honduras, and Nicaragua and head to the United States, as socioeconomic conditions deteriorate rapidly in their countries of origin due to climate change. The overall socioeconomic landscape in these countries has further worsened since the COVID-19 outbreak, tarnishing prospects for climate change adaptation. In addition, in 2020, Hurricane Etta and Yota occurred one after another, causing millions of victims and damaging various sectors such as agriculture and infrastructure.
   One should note that, while Central American countries record relatively low greenhouse gas emissions, they have been under direct, continuous influence of climate change. This suggests that more emphasis should be put on adaptation efforts than on mitigation efforts in promoting sustainable development in these countries. All in all, adaptation activities should be considered as a key to the sustainable development of these countries and there is certainly an international consensus on the urgency of adaptation-oriented activities. Despite such urgency, it is hard to deny that Korea has had difficulties in formulating effective cooperation measures targeting climate change adaptation in Central America, given the lack of understanding of adaptation issues and demands for cooperation in the region. Against this backdrop, this study identifies promising cooperation areas in the field of climate change adaptation between Korea and Central American countries and proposes cooperation schemes in each area. The contents of the study are as follows.
   Chapter 2 first examines how climatic factors have evolved in the four Central American countries. We also explore how frequent climate-induced weather extremes have been and how much damage they have caused in these countries. We find that, from 1931 to 2020, the average annual temperature and average annual maximum temperature rose, while the average annual precipitation decreased. During rainy seasons, the number of rainy days decreased and the intensity of heavy rain increased. Due to the changes in climatic factors, the frequency of floods, storms, droughts, landslides, and abnormal temperatures in these countries over the 1991–2020 period increased substantially compared to the 1961–1990 period. It is also found that more than 37,000 casualties occurred and the number of victims reached 27 million due to climate disasters in the four Central American countries between 1991 and 2020. Economic losses from climate disasters recorded 2.1% of GDP in Nicaragua from 1996 to 2000 and 4.8% of GDP in Honduras from 2016 to 2020. Moreover, around 2.19 million people were internally displaced due to climate disasters over the 2008–2020 period. Meanwhile, it is predicted that the trend of increasing average annual temperature, decreasing annual precipitation, and increasing intensity of heavy rain during rainy seasons will be prolonged.
   In Chapter 3, we assess the climate change vulnerabilities of the four Central American countries in geographical and socioeconomic dimensions and examine their policy efforts to adapt to climate change at the regional and country level. We find that they demonstrate a high degree of area-specific and country-specific vulnerabilities to climate change in dry corridor areas, rural areas, mountainous areas, coastal areas, and urban areas, due to their own complex reasons. In this context, the four Central American countries for the first time jointly responded to climate change at the regional level through the creation of the Convenio Regional sobre Cambios Climáticos (CRCC) in 1993. In 2011, the Estrategia Regional de Cambios Climáticos (ERCC) was approved at the 37th SICA Summit. It was followed by an action plan to support the strategy and regional policy efforts. This study provides a review of the adaptation-related contents of the ERCC and each country’s policy documents that provide guidance at the highest level on how adaptation activities should be implemented. By doing so, we identify the regional-level and country-level policy directions in the field of climate change adaptation and the priority areas that each country has set for adaptation purposes. While the priority areas for adaptation differ across countries, among the top priority areas commonly identified by four Central American countries are found to be agriculture, water resource management and disaster response and management.
   Chapter 4 provides a breakdown of climate development finance allocated to the four Central American countries for projects oriented towards adaptation, mitigation and both, by donor countries and multilateral institutions and by targeted sectors. In terms of the absolute amount, we find that the four Central American countries received a significantly smaller amount of financial support from the international community to address climate change challenges than other Latin American countries. Even after taking into account the population size, it is found that they still did not secure enough financial resources to cope with climate change. Between 2010 and 2019, the amount of per capita climate change finance recorded $174 in Nicaragua, $167 in El Salvador, $145 in Honduras, and $72 in Guatemala. Over the same period, the amount of per capita climate change finance oriented towards adaptation-targeted projects was found to be $110 in El Salvador, $62 in Nicaragua, $41 in Honduras, and $37 in Guatemala. We then present a breakdown of financial resources provided by OECD DAC countries and multilateral institutions to each country’s climate change adaptation projects. Among the priority areas of cooperation – namely, agriculture, water resource management and disaster response and management – we find that there is a clear lack of financial support from the international community towards water resource management in Guatemala, water management and disaster response and management in El Salvador, and disaster response and management in Honduras and Nicaragua. Nevertheless, considering the total amount of adaptation-related development finance allocated to the four Central American countries, one can say that financial support from the international community is insufficient to meet their demands for cooperation in all the areas mentioned above.
   Chapter 5 presents a brief overview of the structure of Korea’s international cooperation schemes regarding climate change response and the main initiatives formulated upon this background. The National Strategy for Green Growth, Five-Year Plan for Green Growth, Mid-Term Strategic Plan for Development Cooperation and Green New Deal ODA Strategy encompass policy guidelines for Korea’s international cooperation in response to climate change. In particular, with the Green New Deal ODA Strategy in place, it is expected that climate change adaptation will constitute one of the core pillars of Korea’s development cooperation in the near future. Against this backdrop, we identify a number of areas where Korea has accumulated know-how in adaptation-related cooperation activities. We find that Korea has accumulated sufficient experience in agriculture and water resource management, having disbursed large amounts of adaptation-oriented development funds to those areas. While Korea has not allocated much of its adaptation-oriented development funds to disaster response and management so far, we suggest that the experience gained from the related projects conducted in Asia and Latin America can be applied to potential cooperation projects in Central America.
   In the last chapter, we draw upon the analyses in chapters 3, 4, and 5 to reiterate main areas of challenge that the four Central American countries need to address for climate change adaptation. These are agriculture, water resource management and disaster response and management. We then propose cooperation initiatives for each area of challenge by presenting examples of promising activities and reviewing some cases of the projects conducted by Korea or other donors. We also propose some initiatives that capitalize on partnership with Costa Rica, the United States and Central American Bank for Economic Integration (CABEI) and social ventures, when carrying out cooperation projects in the four Central American countries.
   The 16th General Assembly of the United Nations Convention on Climate Change (COP16) held in 2010 saw the establishment of the Cancun Adaptation Framework. This signified that adaptation activities aimed at reducing climate change vulnerabilities and increasing resilience to climate change had emerged as a new pillar of climate change response goals. In the Paris Agreement, which has acted as a basis of the new climate framework involving all countries since 2020, climate change adaptation is set as one of the principal goals of the agreement along with curbing temperature rises. The agreement emphasizes the importance of international support for efforts aimed at adapting to climate change and reducing the risk of loss and damage in the developing countries that are vulnerable to climate change. Meanwhile, at the 26th General Assembly of Parties (COP26) to the UN Climate Change Convention held in 2021, developing countries urged cooperation from developed countries to help them to secure financial resources for adaptation, strengthen their adaptive capabilities, and facilitate technology transfers related to climate change.
   In this context, the four Central American countries have been participating in various climate change negotiations through the channels of the SICA and Asociación Independiente de Latinoamérica y el Caribe (AILAC), demanding enhanced international support for climate change adaptation. Our analysis results emphasize the urgency of cooperation in climate change adaptation in Central American countries and show that Korea has sufficient development cooperation capabilities in their priority areas for cooperation. Accordingly, we propose that Korea expands financial resources oriented towards climate change adaptation in Central American countries and carries out adaptation-related projects in a more active manner through various cooperation mechanisms. Such efforts are expected to contribute to addressing Central American countries’ development challenges and thereby elevate the level of Korea-Central America cooperation. At the same time, they can help to fortify Korea’s leadership in climate change on the international stage.

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