MEXICO CITY (Reuters) – Latin America and the Caribbean face multiple and increasingly frequent risks from a changing climate, ratings agency Moody’s Investors Service said this week, with the risks highest for the region’s energy and extractive sectors.
The dangers include sea level rise, unprecedented fires, droughts, floods and extreme weather, “with dangers to credit quality across various geographic regions and industries,” Moody’s said.
The ratings agency added in a report that episodic hazards such as hurricanes, wildfires and floods can be severe, concentrated, and sometimes immediately damaging to profitability and cash flow, and therefore to ratings.
In Brazil climate change is threatening crop loss and productivity, while changes in rainfall, heat waves and droughts are upsetting grain production and trade in Argentina, the report added.
Argentina’s main farming zones are facing the driest conditions in around 30 years, agricultural and weather experts said, raising fears about a new “great drought” and stalling planting of corn in the world’s No. 3 exporter of the grain.
Mexico’s agricultural producers are susceptible to weather-related events that affect the harvest of corn, the country’s biggest crop, while water stress is complicating Chile’s mining, agriculture and hydropower operations, said Moody’s.
Other water-intensive industries such as beverage producers will face higher costs from increasing water scarcity and droughts.
In Peru, floods and rising sea levels pose direct threats to the Andean nation’s fishing, protein and agriculture sectors, while its mining sector faces some risk from geographic concentration, said Moody’s.
(Reporting by Carolina Pulice and Marion Giraldo; Editing by Anthony Esposito and Josie Kao)