Latin America and the Caribbean face increasing risks from climate change, says Moody's.
The highest risks are for the energy, mining, and agriculture sectors.
(Reuters)- Latin America and the Caribbean face multiple and increasingly frequent risks due to climate change, the Moody's Investors Service rating agency said on Thursday, pointing to higher risks for the energy, mining and agricultural sectors.
The dangers include rising sea levels, unprecedented wildfires, droughts, floods, and extreme weather conditions, posing risks "to credit quality across multiple geographic regions and sectors," Moody's said.
The agency added in a report that episodic risks, 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 losses and productivity, while changes in rainfall, heat waves, and droughts are harming grain production and trade in Argentina, the report added.
Argentina's main agricultural zones are facing the driest conditions in about 30 years, agricultural and climate experts said, raising fears of a new "major drought" and paralyzing corn planting in the world's third-largest exporter of the grain.
Mexican agricultural producers are susceptible to weather events that affect the corn harvest, the country's largest crop, while water stress is complicating mining, agriculture, and hydroelectric operations in Chile, Moody's said.
Other water-intensive industries, such as beverage producers, will face higher costs due to increasing water scarcity and droughts.
In Peru, flooding and rising sea levels pose direct threats to the Andean country's fishing, animal protein, and agricultural sectors, while its mining sector faces some risk of geographic concentration, Moody's said.