Caribbean & Central America - July 2023

In May the World Bank (WB) released a new country climate change and development report (CCDR), warning of the impact of climate change on Honduras which, historically highly exposed to extreme natural hazards, remains one of the poorest and most unequal countries in the Western Hemisphere.

Released on 16 May, the CCDR highlights that Honduras consistently ranks among the countries most vulnerable to natural hazards. It points out that in 2019, the Global Climate Risk Index, produced by Germany-based NGO Germanwatch, classified Honduras as the second country globally to be most severely affected by extreme weather events in the 1998–2017 period, with annual average losses equivalent to 1.8% of GDP, affecting critical sectors such as transportation, telecommunications, health, education, water, and sanitation.

The CCDR singled out in particular the devastating economic and human impacts of hurricanes and their corresponding floods, noting that Hurricane Mitch, which struck in 1998, the worst disaster in Honduras’s recent history, generated economic damage estimated at between 59.6% and 70% of annual GDP. More recently, in 2020, losses and damage from hurricanes Eta and Iota totaled US$1.8bn (approximately 7.5% of 2019 GDP).

The report highlights agriculture as the sector most affected, pointing out that this accounts for 73% of Honduras’s total exports and 30% of employed Hondurans, with most of those employed in this sector being small-scale, rural-based subsistence farmers. It warns that four of the five crops with the greatest harvested area in Honduras – maize, coffee, beans, and sugarcane – will reduce their yields. Underlining that this will adversely impact subsistence farmers’ food security, given maize and beans are their main crops, as well as exports, the CCDR cites projections of a reduction of 37% in yields of rainfed sugarcane, 30% of irrigated sugarcane, and 21%-26% of coffee by 2050. It points out that these are also Honduras’s highest value agricultural commodities with coffee alone accounting for 54% of total agricultural exports in 2021 and providing income for over 1m Hondurans.

Other sectors which are particularly vulnerable include water resource management, with the WB noting that 71.6% of exports, one-third of electricity generation and 47.9% of jobs are water-dependent; forests and marine and costal ecosystems; and transport (with over 60% of the transport network exposed to natural hazards).

With stark warnings regarding climate change and its expected impact on Honduras’s vulnerability, the CDDR has a sobering assessment of the impact on the economy and debt. It warns that “based on historical growth and natural hazard risk patterns, in the absence of any further climate or policy changes, the combined impact of productive capital destroyed through excess rain (flooding), tropical cyclones (strong winds), and earthquakes is expected to result in a cumulative loss of around 5.4% of annual GDP by 2050 (relative to the hypothetical scenario without impacts caused by natural hazards)”.

The WB points out that this would limit income opportunities, and therefore reduce the consumption of the population by 6.8%, adding that “lower growth, foregone revenue, and the diversion of productive resources toward reconstruction and relief efforts also limit the private sector’s profitability and stress the government’s fiscal capacity”. The WB cites projections that, by 2050, public debt levels will rise by around 6.2 percentage points of GDP, compared to a hypothetical scenario with no impacts from natural hazards.

Forestry initiatives

The CDDR underlines the crucial role played by forests in efforts to tackle climate change, noting that in Honduras, forests cover over 56% of national territory and “are essential for mitigation efforts through the absorption of carbon, resilience to natural hazards, and the income‑generating opportunities they provide to rural populations”. However, it highlights that the rate of tree cover loss is “high” by regional and global levels, with 12% lost between 2010 and 2021, driven mainly by the expansion of small-scale farming and commercial agriculture.

The leftist Partido Libertad y Refundación (Libre) government led by President Xiomara Castro has recently sought to address this, launching a national reforestation campaign at the end of May in the framework of the ‘Padre Andrés Tamayo’ environmental scheme, named after a Honduran Catholic priest and environmentalist. Announcing the reforestation scheme in Santa Cruz de Yojoa municipality, Cortés department, Castro said that since taking office in January 2022, the government had launched “important programmes to address climate change and global warming”. At the same event, Honduras’s natural resources & environment minister, Lucky Medina, hailed the successful planting of over 15m trees and effective combating of over 1,800 forest fires in summer, of which over 91% were brought under control through inter-institutional cooperation.

The Padre Andrés Tamayo scheme, which has involved over 6,000 people, was unveiled in January at which point the government said that it would apply to 150 municipalities. The scheme set up an environmental institutional task force comprising the armed forces, the national institute of forest management (ICF), environmental prosecutor’s office, and attorney general’s office. It includes a campaign against forest fires, protection, forest recovery, and financial support for communities for solid waste management which contaminates water sources.

The ICF has identified over 105 micro-watersheds with degraded or deforested areas for intervention, which it says would benefit around 618,256 people directly. In 2022, 61 brigades were contracted as part of efforts to carry out prevention efforts against forest fires, directly creating 500 new jobs in 15 departments. For 2023, the goal is to restore 24,000 hectares in zones of groundwater recharge, 8,000 hectares with reforestation techniques, 15,000 hectares of management and protection for natural regeneration, and 1,000 hectares with established agro-forestal systems.

WB recommendations

Policy recommendations include: (1) enhancing capacity and building a robust institutional framework to implement and monitor climate action; (2) enacting a proactive macro-fiscal policy that prioritises disaster risk management and adaptation investment; (3) protecting the poorest and most vulnerable; (4) improving productivity and resilience of the agriculture sector; (5) promoting low-carbon and climate-resilient transport systems; and (6) promoting sustainability of the electricity sector.

More warnings on food insecurity

On 7 June the United Nations (UN) Food and Agriculture Organization (FAO) published a report citing Integrated Food Security Phase Classification (IPC) analysis, which said that the population in Honduras facing acute food insecurity is estimated at 2.34m people during the March‑May 2023 period (out of total 10.3m pop.), marginally down from the 2.36m people in the same period in 2022. The projection points to 2.42m people experiencing high levels of acute food insecurity during the lean season from June to August 2023, slightly lower than the 2.64m people a year before. It attributes the year‑on‑year improvement to a slow recovery for economic activities in the tourism, textile and agricultural sectors. An FAO and UN World Food Programme (WFP) report released on 29 May included Honduras as one of 18 hunger “hotspots” comprising a total of 22 countries, which also included El Salvador, Guatemala and Nicaragua in Central America. It highlights the impact on agricultural production of the El Niño phenomenon, a naturally occurring climatic phenomenon that has a warming effect on ocean surface temperatures in the central and east Pacific. It warns this is likely to compound inflation and drive up acute food insecurity in Central America.

Food insecurity

According to the 7 June FAO report, the persistent high levels of food insecurity in Honduras are mainly due to the elevated prices of food and agricultural inputs, constraining the access to food and the extent of sowings. It also highlights that excessive rains in localised areas in the northern region in the second half of 2022 affected livelihoods of palm and banana producers, especially in Gracias a Dios department.