Climate change is happening and it is affecting food security in vulnerable communities around the world. Climatic drivers such as rising temperatures, erratic precipitation, and extreme weather events pose significant risks to agriculture and have often resulted in a decrease in the production and quality of food. Growers are affected by reduced incomes, while consumers suffer from a rise in prices and lack of supply.
Impact on Central America
Central America is one of the regions most affected by climate change. According to the Food and Agriculture Organization of the United Nations (FAO), the cumulative effect of climate change is undermining all dimensions of food security, including food availability, access, utilization, and stability. According to the Germanwatch Global Climate Risk Index for 183 countries, between 1996 and 2015, Honduras was the country where vulnerability to climate change was the greatest within Central America. Nearly half a decade later, statistics have remained the same.
In 2020 we were hit by the COVID-19 pandemic which has caused rural communities in Honduras and Nicaragua to report 50% rates of unemployment or underemployment. While these communities were already suffering from the economic consequences of the pandemic, two hurricanes swept Central America in late 2020. Hurricanes Eta and Iota destroyed more than 200,000 hectares of staple foods and cash crops, and more than 100,000 hectares of coffee farmland, as reported by the United Nations. The destruction of these crops was even more significant than it had been in previous years as food insecurity in Central America was already exacerbated by the pandemic.
“The simultaneous impact of hurricanes Eta and Iota and COVID-19 threatens the most vulnerable population groups, whose livelihoods are devastated” said Adoniram Sanches, sub-regional coordinator of the UN Agency for Mesoamerica.
According to reports by the Economic Commission for Latin America and the Caribbean (ECLAC), the 2020 hurricanes had a negative economic impact of more than 1.9 billion dollars, with agriculture, commerce, industry, and housing being the most affected sectors. Approximately 3.7 million people in Honduras were affected and by December 2020, at the worst level of the crisis, 2.9 million people were facing acute food insecurity in the country. As the pandemic continues, this number is projected to increase to unprecedented levels and experts believe one third of the Honduran population will be suffering from hunger by the end of 2021.
Making Vulnerable Communities More Resilient
Due to the state of emergency caused by hurricanes Eta and Iota, the FAO requested emergency funds to assist victims in Central America and promote recovery plans drawn up by the governments of these countries. The plans include the rehabilitation of the livelihoods of 333,000 people, most of them small farmers. However, a more comprehensive and collaborative effort that involves government, non-profit organizations and the private sector is required to have a broader reach.
Non-profit organizations and private companies have been providing relief to people in these communities. Including one of Deetken Impact Sustainable Energy (DISE) portfolio companies, General Equipment Supply SA (GESSA), who has been supporting 200 families by delivering food and sanitation supplies over the past year, benefiting approximately 1,300 inhabitants of the communities of Betulia, Samaria and La Fortuna in Honduras.
Local communities who highly depend on natural resources for their livelihoods, need a more sustainable solution to become resilient to climate change and be prepared for future extreme climate events. In order to mitigate the negative socio-economic impacts associated with climate change, communities should be empowered to learn new diversified sources of income. Women, in particular, who are predominantly affected must be empowered. As impact investors, Deetken Impact aims to contribute to the clean energy transition by financing renewable energy projects in the region, fostering economic development by providing job opportunities in rural communities, and fighting the effects of climate change by displacing greenhouse gases. These positive impacts go a step further as the companies we invest in, engage with local communities, support sustainable economic development and help them become more resilient to unfavorable changes.
Community Support in Action
One example of this is GESSA, a company that manages a Hydroelectric Power Plant located in the Colon Department of Honduras, one of the departments most affected by COVID-19 and hurricanes ETA and IOTA. Over the past few years, GESSA has engaged with the community in an agricultural project, where community members have learned how to plant value-added crops to generate higher incomes. The company has also coordinated reforestation projects in the area, which among other things provide carbon sequestration, assist in the fight against climate change, and also generate local jobs.
Another important aspect for a community to become more resilient and prepared for the future is through quality education. GESSA is aware of the importance of education, and has recently supported children in the community by encouraging them to stay in school. In a year where the school dropout rate has been estimated to be around 40%, GESSA has provided school supplies, academic tutoring and internet access in its premises allowing students to communicate with teachers and download assignments.
At Deetken Impact we are aware of the challenges ahead and are proud of the companies we invest in and their commitment to sustainable development. We believe that our investments have a very positive effect in supporting vulnerable communities not only during challenging times, but also strengthening them and preparing them for a better future.