Belize: Effects of climate change on agriculture

Climate change poses a serious threat to Central American societies due to its foreseeable and multiple impacts on the population and productive sectors. In fiscal terms it constitutes a contingent public liability that will affect the public finance of governments for generations to come. It is estimated that by 2030, Central America will still produce less than 0.5% of greenhouse gas (GHG) emissions on the planet, yet it is already one of the regions most vulnerable to the battering of climate change.

The increase in atmospheric and sea temperatures, the reduction and instability of rain patterns and the rise in sea levels, together with the intensification of extreme meteorological events —such as droughts and hurricanes— will impact the production, infrastructure, ways of life, health and safety of the population, and will also weaken the environment’s capacity to provide vital resources and services.

In response to the mandate that emerged from the May 2008 Central American Presidential Summit on Climate Change, the ECLAC Subregional Headquarters in Mexico is implementing the project “The Economics of Climate Change in Central America” with the region’s Authorities of Environment, Ministries of Finance/Treasury, the Central American Secretariat for Economic Integration (SIECA) and the Central American Commission for Environment and Development (CCAD). The project was approved by environmental authorities beginning in January 2009 with funding from the British government’s Department for International Development (DFID).

Its goal is to alert decision makers and key players in Central America, particularly those from the social and economic fields, to the urgency of confronting the challenge of climate change and promoting a dialogue of policy options as well as national and regional actions. The specific objective is to conduct an economic evaluation of the impact of climate change in Central America with different development scenarios and emissions trajectories, while considering the costs and benefits of potential “business as usual” responses, and of options for vulnerability reduction and adaptation, as well as the transition toward an economy that is both sustainable and low in carbon.

The Project Steering Committee is comprised of the Ministers of Environment and Treasury/Finance of the seven countries of Central America. It has a Regional Technical Committee with delegates from those Ministries, CCAD/SICA and SIECA. The ECLAC Subregional Headquarters in Mexico acts as Project Coordinating Unit. The initiative works in coordination with other projects in Latin America, with the global network of projects on the economics of climate change and the British government’s Stern team.

Throughout 2009, the project implemented the following components: Climate Scenarios, Macroeconomic and Demographic Scenarios, Land Use Change, Water Resources, Agriculture, Biodiversity, Energy, Economic Valuation of Impacts (initial stage), Poverty and Adaptation (initial stage), Mitigation, Policy Options in Adaptation and Mitigation (initial stage). The disasters component is being executed by ECLAC’s Disaster Unit with financing from the Kingdom of Denmark. The pending components to be started in the coming months are Health, Ecosystems and Forest/Land Use Change. The Poverty, Economic Valuation of Impacts, Adaptation and Mitigation Options components and their costs will continue. Additionally, the project partners are considering options for responding to other needs that have become more evident in the past year, like a better analysis of funding and fiscal aspects, and the importance of strengthening national and regional capacities.

The agricultural sector is sensitive to climatic variations and could be one of the most affected sectors as a result of global warming. The objective of this document is to analyse the possible impacts of climate modifications on Belize’s agricultural sector; in particular, the results of temperature and precipitation variation effects are presented using two climate scenarios and different time horizons.

This current study is part of the series of documents created by ECLAC in the framework of the project: one for the Central American region and Belize as a whole and one for each of the seven countries (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama). The studies are based on the results of climate projections using production functions and a Ricardian model that measures the effect of climate change on land values. In Belize’s case, however, the Ricardian model could not be used due to the lack of information available. To build the Ricardian model for the six remaining countries, household surveys were utilised, the relevant variables being the value of land rent or agricultural revenue. After learning of the existence of a survey entitled “2002 Belize Living Standards Measurement Survey (LSMS),” a request was made for a copy from the Statistical Institute, but the document has yet to be received.

For the sector as a whole, the results of the production functions show losses in production. According to the A2 climate scenario, by the year 2100 the accumulated losses in the sector will range near 77% of 2007 GDP. Furthermore, the test of the impact on some of the most important crops (maize, beans, sugar cane and oranges) shows significant decreases in yield: by the year 2100 these decreases will be between 6% and 20% of 2007 GDP.

Both temperature and precipitation in Belize during 2005 were very near the optimal level required by the function in order for agricultural production as a whole to maximize production. This indicates that alterations in climate conditions could have negative effects on production. Furthermore, if measures that strive to compensate the climatic tendencies are not taken, the economic losses could be significant, above all for small farmers, who are the most vulnerable to the battering of the climate.