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In Latin America, farmers use microfinance to fight climate change

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María Fernanda Masís and her family are the owners of the hot sauces brand Xoloitzcuintle, named after their farm. Photo: UNEP

Sonia Gómez has spent her entire life around agriculture. She grew up on her parents’ plantation in the fertile mountains of Costa Rica before opening her own organic farm several years ago. But that experience did little to prepare her for what has become a dire threat to her business: climate change.

Increasingly severe cycles of drought and flooding – which are being driven by global warming – have wreaked havoc on her crops of chilis, tomatoes and carrots.

“We don’t know when it will rain or when it will be sunny,” says Gómez, whose farm is in the foothills of Costa Rica’s tallest volcano, Irazú. “It is difficult for us, as farmers, to work like this.”

Globally, more than 1.5 billion people live or work on small farms, like Gomez’s. They often cannot afford the advanced technology that could help them contend with the fallout from climate change.

The United Nations Environment Programme (UNEP) and Gomez are hoping to change that. In late November, Gomez’s farm became an official test bed for low-cost, environmentally friendly technology designed to help farmers adapt to a changing climate. It now features everything from a seed bank to a high-tech irrigation system.

The effort is part of the Microfinance for Ecosystem-based Adaptation (MEbA) project, spearheaded by UNEP and implemented in Costa Rica along with Fundecooperación, a non-profit group and microfinance bank. Along with supporting the creation of 11 test farms, the initiative has worked with micro-lenders across Latin America to provide 17,000 loans to small-hold farmers looking to invest in eco-friendly solutions.

Seeds of change

“Helping small-scale farmers to adapt to climate change is crucial to fighting poverty, ensuring food security and preserving the biodiversity that provides us with vital resources,” says Leo Heileman, UNEP Regional Director in Latin America and the Caribbean. “This move towards more sustainable and resilient agriculture requires the full support of financial institutions.”

While it produces relatively little carbon dioxide itself, Latin America and the Caribbean is vulnerable to extreme weather induced by a changing climate. This is especially true in the so-called Dry Corridor of Central America, which includes El Salvador, Honduras and Nicaragua. More than 2 million people there depend on subsistence farming and by the end of the century, temperatures could rise up to 7 °C, according to some projections. That, say experts, would drastically alter weather patterns.

Since 2012, MEbA has provided technical assistance to financial institutions, helping them disburse more than US$ 29 million in loans to small-scale farmers in Colombia, Costa Rica, Ecuador, El Salvador, Peru and the Dominican Republic.

The project has helped farmers finance more than 30 strategies for adapting to climate change, from beekeeping to agroforestry. In late November, Fundecooperación also launched two new loan types that promote climate-smart agriculture and livestock farming.

Capital improvements

That financing has allowed farmers to re-invest in their land. Gomez’s farm, which she calls La Sanita, Spanish for “healthy”, features several innovations designed to safeguard against extreme weather. Those include a rainwater collection system built atop a greenhouse Gomez previously erected through a microloan from Fundecooperación. It funnels water directly to the roots of her plants through drip irrigation, reducing water loss through evaporation.

The farm, located in the province of Cartago, also has an organic fertilizer laboratory to improve soil productivity and a bank to preserve organic-grade seeds. As well, Gomez planted fruit trees and perennial herbs in the steepest areas of her farm to reduce soil erosion.

After months of restrictions due to the COVID-19 pandemic, the farm was formally inaugurated on 25 November during an online event. It wasn’t the only ‘demonstration plot’ – another one, the Xoloitzcuintle farm, which grows vegetables for the country’s famed hot sauces, joined La Sanita in proving the MEbA project’s success in Cartago province.

The Xoloitzcuintle farm, led by María Fernanda Masís, is recovering the quality of its soil to cope with extreme weather events. Years of mechanical tillage and agrochemicals resulted in compacted soil, with little organic matter, that erodes easily when heavy rains arrive.

With support from the project, the farm is finding solutions for water management. Some are straightforward, like digging trenches to infiltrate water output, others more complex, like drip irrigation systems. Masís has also turned to organic fertilizers and put in place a silvo-agricultural system that taps into the farm’s timber and fruit trees.

“Teaching by example is our best option,” said Marianella Feoli, Executive Director of Fundecooperación. “Demonstration farms [like La Sanita and Xoloitzcuintle] facilitate exchanges between producers and help them learn from each other’s experiences and invest in similar solutions through specialized credit products.”

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Serving up sustainable food

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Along with a vow to return to exercise, upping personal intake of fruit and vegetables tops the list of New Year’s resolutions for many. But what if this year’s resolution didn’t end with the eating – and extended to reducing the amount of healthy, nutritious produce that gets trashed?

That’s a commitment that the United Nations Environment Programme (UNEP) is banking on to help achieve the Sustainable Development Agenda.

Global estimates suggest that roughly one-third of food produced for human consumption is lost or wasted every year. Those 1.3 billion tons of fruits, vegetables, grains and roots are lost through spillage or spoilage in the harvest-to-market chain, or to spoilage and discard once products hit retailers and, eventually, consumers.

In a world where malnutrition is a contributing factor to roughly 45% of deaths of children under age five in developing countries, and where consumption of highly processed foods is pushing obesity rates ever higher, remaining accountable to those New Year resolutions isn’t just personal – they’re critical for humanity.

They are also critical for the survival of the planet. Food production, consumption and waste – and how they impact the environment – will be a key topic of discussion at this year’s United Nations Environmental Assembly (UNEA-5), taking place online on 22-23 February 2021.

UNEP and partners are developing the world’s most comprehensive data analysis and modelling on food waste, which will be launched at the Assembly. Titled the ‘Food Waste Index’, the document will be released at UNEA-5. It offers new estimates of food waste at household, retail and food service sectors at country level, and provides a methodology that enables countries to measure and track progress on Sustainable Development Goal 12.3, which aims to halve retail and consumer food waste and reduce food loss by 2030.

Food systems for the future

Agriculture and the pressure to produce cheaper, faster commodities are among the primary drivers of biodiversity loss. Resource-intensive food production that depends heavily on the use of inputs such as fertilizer, pesticides and complex irrigation and energy systems means fewer wild spaces for the other creatures we share nature with, whether it’s birds, mammals, insects or microbial organisms. Meanwhile, political and economic structures are pricing farmers off their land.

“The COVID-19 pandemic revealed the obstacles and blockages in our global food system. We have a timely opportunity to build back better and redesign the way we grow, harvest, sell and eat the bounty of nature’s production,” said Clementine O’Connor, from UNEP’s Sustainable Food Systems Programme.

Transforming our food systems will not only help restore biodiversity and habitat but can also strengthen market opportunities for smallholder farmers – many of whom are women on the road to economic self-sufficiency through sustainable production of fruit and vegetables.

A fruitful year?

At UNEA-5, the virtual convening of representatives of UN member states, the private sector, civil society, scientists and other leaders will be an opportunity to share and adopt best practices for transforming food systems. Momentum toward sustainable food production and consumption that is generated by the Assembly will be built upon going forward in 2021, with the historic first-ever UN Food Systems Summit.

The year 2021 has also been marked by the Food and Agriculture Organization of the United Nations (FAO), as the International Year of Fruits and Vegetables 2021 to highlight the role of fruits and vegetables in human nutrition, livelihoods, food security and health.

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2020, one of three warmest years on record

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The COVID-19 pandemic was not the only long-term crisis the world will remember from 2020. In terms of climate change, the year was also one of the three warmest on record, and rivalled 2016 for the top spot, the UN weather agency said on Wednesday. 

“The confirmation by the World Meteorological Organization (WMO) that 2020 was one of the warmest years on record is yet another stark reminder of the relentless pace of climate change, which is destroying lives and livelihoods across our planet”, said Secretary-General António Guterres

He pointed out that at 1.2 degrees of warming above pre-industrial levels, the world is already witnessing unprecedented weather extremes in every region and on every continent.  

“We are headed for a catastrophic temperature rise of 3 to 5 degrees Celsius this century”, he warned. “Making peace with nature is the defining task of the 21st century. It must be the top priority for everyone, everywhere.”  

Powerful force 

La Niña, which began in late last year, is expected to continue into the early-middle part of 2021.   

“The exceptional heat of 2020 is despite a La Niña event, which has a temporary cooling effect”, said WMO Secretary-General Prof. Petteri Taalas.  

La Niña and El Niño effects on average global temperatures are typically strongest in the second year of the event. 

“It is remarkable that temperatures in 2020 were virtually on a par with 2016, when we saw one of the strongest El Niño warming events on record”, he added. “This is a clear indication that the global signal from human-induced climate change is now as powerful as the force of nature”.  

The extent to which the continued cooling effects of La Niña this year may temporarily diminish the overall long-term warming trend remains to be seen.  

Following atypical patterns  

WMO pointed to sustained heat and wildfires in Siberia, diminishing Arctic sea ice and record-breaking hurricanes in the Atlantic as being among the climate events that most stood out in 2020.  

The UN weather agency also reminded that temperature is just one climate change indicator. Greenhouse gas concentrations, ocean heat content, global mean sea level, sea ice extent and extreme events are also factors. 

Backed by science 

WMO’s consolidated global temperature update incorporates information from five leading international sets of data.  

It also uses datasets that combine millions of meteorological and marine observations, including from satellites, with models to produce a complete reanalysis of the atmosphere.  

“The combination of observations with models makes it possible to estimate temperatures at any time and in any place across the globe, even in data-sparse areas such as the polar regions”, according to WMO.  

Looking to the future  

The Paris Agreement aims to limit global warming to well below 2°C, preferably to 1.5°C degrees, compared to pre-industrial levels. 

However, the global average temperature in 2020 had already approached the lower limit of the temperature increase that the Agreement seeks to avert.  

Moreover, there is at least a one-in-five chance that the average global temperature will temporarily exceed 1.5 °C by 2024, according to WMO’s Global Annual to Decadal Climate Update, led by the United Kingdom’s Met Office. 

The 2021 Met Office annual global temperature forecast also suggests that next year will again be one of the earth’s hottest years.  

Updating its provisional December report, WMO will issue its final publication in March, which will incorporate temperature figures, information on all leading climate indicators and selected climate impacts. 

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Step up action and adapt to ‘new climate reality’-Report

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Though countries have made progress in planning for climate change adaptation, there are significant financing shortfalls in getting them to the stage where they provide real protection against droughts, floods and rising sea levels, a new UN environment report has found. 

According to the 2020 Adaptation Gap Report, released on Thursday by the UN Environment Programme (UNEP), as temperatures rise and climate change impacts intensify, nations must urgently step up action to adapt to the new climate reality or face serious costs, damages and losses. 

“The hard truth is that climate change is upon us,” Inger Andersen, UNEP Executive Director, said in a news release announcing the findings. 

“Its impacts will intensify and hit vulnerable countries and communities the hardest, even if we meet the Paris Agreement goals of holding global warming this century to well below 2 degrees Celsius and pursuing 1.5 degree Celsius.” 

Global commitment needed 

Annual adaptation costs in developing countries are estimated at $70 billion, but the figure could reach up to $300 billion in 2030, and $500 billion in 2050. Almost three-quarters of nations have some adaptation plans in place, but financing and implementation fall “far short” of what is needed, according to the UNEP report. 

Stepping up public and private finance for adaptation is, therefore, urgently needed. 

“As the Secretary-General has said, we need a global commitment to put half of all global climate finance towards adaptation in the next year … this will allow a huge step up in adaptation, in everything from early warning systems to resilient water resources to nature-based solutions,” Ms. Andersen added. 

Adaptation is a key pillar of the Paris Agreement on Climate Change. It aims to reduce countries’ and communities’ vulnerability to climate change by increasing their ability to absorb impacts.  

Nature-based solutions 

The UNEP report also underscored the importance of nature-based solutions as low-cost options that reduce climate risks, restore and protect biodiversity, and bring benefits for communities and economies. 

Its analysis of four major climate and development funds: the Global Environment Facility (GEF), the Green Climate Fund (GCF), the Adaptation Fund, and the International Climate Initiative (IKI), suggested that support for green initiatives with some element of nature-based solutions has risen over the last two decades.  

Cumulative investment for climate change mitigation and adaptation projects under the four funds stands at $94 billion. However, only $12 billion was spent on nature-based solutions, a tiny fraction of total adaptation and conservation finance, it added. 

Cutting emissions will reduce costs 

Cutting greenhouse gas emissions will reduce the impacts and costs associated with climate change, according to the report. Achieving the 2 degrees Celsius target of the Paris Agreement could limit losses in annual growth to up to 1.6 per cent, compared to 2.2 per cent for the 3 degrees Celsius trajectory. 

UNEP urged all nations to pursue the efforts outlined in its December 2020 Emissions Gap Report, which called for a green pandemic recovery and updated Nationally Determined Contributions (NDCs) that include new net-zero commitments.  

“However, the world must also plan for, finance and implement climate change adaptation to support those nations least responsible for climate change but most at risk,” the UN agency added. 

“While the COVID-19 pandemic is expected to hit the ability of countries to adapt to climate change, investing in adaptation is a sound economic decision,” it said. 

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