Latin America’s Biodiversity is Under Threat

As fires continue to rage in the Amazon, a Canning House paper explores the worrying trends that threaten Latin America’s biodiversity, while also investigating how investors can help...

Latin America is the most biodiverse region on the planet, but biodiversity has been slashed in recent decades and continues to be lost. This isn’t just an environmental issue. The factors reducing biodiversity are often economic, while there are financial benefits for countries that manage to protect their forests, rivers and wildlife. Canning House commissioned a paper to investigate further.

Rich biodiversity

Biodiversity, or biological diversity, is the variety of life on earth that makes up the natural world, from large animals to microorganisms, underpinning everything that humans need to survive. Latin America and the Caribbean (LAC) holds 40% of the world’s biological diversity and is home to seven out of 25 biodiversity hotspots in the world, six out of 17 megadiverse countries, 11 of the 14 terrestrial biomes, and the second-largest reef system on the planet, the Belize Barrier Reef System.

The region has more than 30% of the planet’s available fresh water. It boasts more than 70,000 kilometres of shoreline, and the sea accounts for 60% or more of the sovereign territory of 22 countries, according to the Economic Commission for Latin America and the Caribbean (Eclac). Many of the largest human settlements in the region are found in coastal areas, and its waters are home to a huge variety of marine and freshwater flora and fauna. LAC is also home to almost 60% of terrestrial life on earth, living in biomes which vary from primary forest, such as the Amazon, to the world’s driest area, the Atacama Desert. Nearly half of the planet’s tropical forests are found in the region.  The Amazon rainforest remains the largest primary forest on earth despite the fact that only around a fifth of it remains intact. Almost 48% of the region’s forest cover is in Brazil, followed by Colombia with 8% and Mexico with around 6.5%.

Economic threats

However, agriculture, livestock, extractive industries, and urbanisation are responsible for changes in land use linked to deforestation. The UN Development Programme (UNDP) found that LAC lost 9.68% of forest cover from 1990-2016, the highest proportion of any world region. A recent Global Forest Watch report, showed that Brazil leads the world in primary forest loss, among five LAC nations in the global top ten for primary forest loss in 2020: Brazil, Bolivia, Peru, Colombia, and Mexico. Colombia provides an interesting case study, recording sustained high rates of primary forest loss since 2016, when the government signed a peace agreement with the Fuerzas Armadas Revolucionarias de Colombia (Farc) guerrilla group.

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It's ironic that peace is threatening biodiversity. But economic growth is also to blame. The UNDP warns that this natural capital is being degraded by the “social and economic processes of the region”. LAC lost 94% of its biodiversity from 1970-2016, according to World Wildlife Fund, compared to 65% in Africa; 45% in Asia Pacific; 33% in North America; and 24% in Europe and Central Asia. Indeed the UNDP estimates it lost 9.68% of forest cover from 1990- 2016, the highest proportion of any world region.

The UN warns that “the agricultural bias of the region’s export structure is increasing at the expense of forest ecosystems”.

Sustainable growth

Yet biodiversity and economic growth are not mutually exclusive. According to Eclac, the region’s amazing biodiversity supports nearly 64 million jobs in the region, representing 19% of total employment, which proves the economic case for protecting natural capital.

The key, says the UN, is to manage these resources in a sustainable manner. The UN’s Sustainable Development Goals address biodiversity in #14 Life Below Water and #15 Life on Land. The first aims to “conserve and sustainably use the oceans, seas and marine resources,” acknowledging the fact that “our rainwater, drinking water, weather, climate, coastlines, much of our food, and even the oxygen in the air we breathe, are all ultimately provided and regulated by the sea.” The second aims to “protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss”.

While there is some evidence of a growing realisation of the importance of protecting biodiversity among diverse groups of stakeholders, it remains to be seen whether this translates to meaningful action. The response to the pandemic is monopolising resources, both political and financial, at the expense of long-term issues such as preserving biodiversity and fighting climate change. On the other hand, the pandemic has sharpened awareness of the link between biodiversity loss and zoonotic diseases, and economic recovery packages provide an opportunity for policymakers and investors to chart a new course.

In the meantime, the UK continues to cement its strong record in working to protect biodiversity, and it will be hosting the COP26 UN Climate Change Conference in Glasgow in November after taking over the presidency from Chile, which led the COP25 conference in 2019.