Introduction to Uruguay

Uruguay, a small South American nation tucked under the southern tip of Brazil, has a population of 3.4 million,1 of which only 4% is rural.2 As the second-smallest country in South America, Uruguay experiences a uniform humid subtropical climate3 and has witnessed extreme weather events like floods, droughts, storms, and wildfires. This is especially pertinent to the country, as 70% of the population lives in the coastal zone, which is heavily subjected to the consequences of the climate crisis and houses critical infrastructure, valuable resources, and areas of ecological interest.4  The capital city of Montevideo lies on this southern coast and houses nearly 50% of the entire country’s population within the metropolitan area.5  
Uruguay has the highest percentage of self-identified White Latin Americans (88%) of any country in Latin America.6 Additionally, with the middle class representing over 60% of the population—the largest in Latin America and the Caribbean—Uruguay is widely recognized as an egalitarian state with high responsibility in financial management.7 Despite this, Uruguay’s economy has only grown by 1.3% annually from 2015 to 2019,8 and its  inequality rates remain high with relatively low education outcomes—especially among the youth and the minority Afro-descendant population.9 The services sector contributes to 63.2% of GDP, while the industrial and manufacturing sectors account for 17.6% and 10%, respectively, followed by the agriculture sector at 7.3%.10 The agricultural sector is of utmost importance, as it makes up more than 80% of Uruguay’s total goods exports and is traded to feed over 28 million people11 in 160 countries.12

Mapping Major Climate Events and Climate-Induced Displacement

Uruguay is highly vulnerable to the effects of the climate crisis, ranking as the 51st most vulnerable country to climate change.13 This is in part due to the country’s location and geography, as Rio de la Plata—a river estuary facing tons of fluctuation from a nearby basin—lies on Uruguay’s southwestern border.14 At the same time, the Southwest Atlantic Ocean also has a complex ocean-atmosphere system that causes natural variability.15 Because most of the country lies on this coast, flood risk is incredibly high, with estimates of more frequent higher-intensity hurricanes and heavier rainfalls expected to make landfall.16 Over the last decade, this flooding has resulted in over 60,000 people needing to be evacuated from 60 cities across Uruguay.17 Between 2016 and 2022, 95.6 % of the country’s total 45,000 internal displacements were due to flooding.18 Despite causing fewer displacements, other short and long term events also have significant impacts. For example, in 2023, an extreme heat wave in Uruguay contributed to the worst drought the country has faced in 70 years, placing immense pressure on the country’s water infrastructure.19 A loss in almost 50% of the country’s drinkable water and high sodium and chlorine infiltration affected nearly 1.5 million people.20  

Mapping the Costs of the Climate Crisis

The GDP of Uruguay is $77.2 billion,21 while the GDP per capita is $22,564,22 making the country the wealthiest per capita in South America. Even with this financial success, Uruguay’s economy is mainly based on natural resources,23 making it especially susceptible to the impacts of the climate crisis. This can be seen with the extreme heat wave in 2023 when its economy only grew 0.4%,9 and when an estimated $1.8 billion was lost from the drought-induced decrease in the livestock, agriculture, and dairy industries.24 Although livestock and agriculture do not account for much of the GDP, they have sizable macroeconomic significance because of their linkages to other Uruguayan value chains, such as the transportation, logistics, and manufacturing sectors.25 These sectors represent between 14% to 40% of total GDP and 70% to 90% of total goods exports.26 Such climate impacts can thus be far reaching. Uruguay estimates that there is a direct loss of $383 million and an indirect loss of $1.2 billion from droughts.27 At the same time,  $116 billion of Uruguay's capital stock—almost 1.5 times the GDP amount—is exposed to flooding.28  

Mapping Resilience and Mitigation Pathways

Despite being responsible for only 0.04% of global GHG emissions,29 Uruguay has become a global leader in sustainability success through policy and actions. On a domestic level, through its 2nd updated NDC, Uruguay unconditionally pledged a reduction in carbon emissions intensity per unit of GDP by 25%, methane by 57%, and nitrous oxide by 48%.30 A significant factor in reducing these gasses comes from beef production, as Uruguay ranks among the top ten global beef exporters, accounting for 78% and 63% of domestic methane and nitrous oxide emissions, respectively.31 To help mitigate these emissions, Uruguay has been working on strategies to improve the efficiency of the emissions per product for beef, and in 2021, became the first South American state to export carbon-neutral beef through the use of natural pastures.32 Through these new strategies, Uruguay maintains that it will preserve 100% of the native forests and continue to increase carbon stocks.33 The country has also done a tremendous job limiting its GHG contributions, particularly in the energy sector, where it stands as a global leader in renewable energy practices. By 2018, 98% of all energy production in Uruguay was derived from renewable energy sources—mainly from wind and hydropower—and exported over 1,400 Gigawatt hours of electricity to neighboring Brazil and Argentina for $222 million.34 The country plans to expand its current renewable energy capacity with new opportunities being designed and developed in the hydrogen, hydroelectric, biomass, and e-fuel industries.35 Uruguay is also known for having the highest carbon tax rate in the world, at $167 dollars per metric ton.36 However, this tax only covers 5% of greenhouse gasses and is inefficient at combating the climate crisis since 70% of all emissions come from the agricultural sector.37 Uruguay has also taken revolutionary steps from a monetary perspective, as it approved the first-ever World Bank loan that linked financial conditions to achieving ambitious environmental targets.9 In terms of managing climate impacts, Uruguay has developed a new National Resettlement Plan that aims to resettle impoverished families affected by the climate crisis and do not have the resources to secure housing.38 It will help 60% of the urban flood-risk population, provide job training for adult family members, and break the cycle of urban poor settling in cheaper, high flood-risk areas.39  

Necessary Changes

Although Uruguay has already taken several preemptive measures to address the climate crisis, it must continue to identify and implement new adaptations for the future. These include enhancing vulnerable population resettlement procedures, implementing new land-use planning measures, improving the protection of water sources like aquifer recharge areas, applying conservation and restoration measures for gallery forests, and promoting ecosystem-based conservation strategies.30 One of the most critical adaptations is to focus on diversification of food production in the agriculture and livestock sectors due to its utmost importance for employment and the economy, and because intensive beef production is a key source of carbon emissions and environmental degradation. Uruguay’s transportation industry also needs to gain attention, as it accounts for the most energy-related emissions and 10.3% of total emissions.40 It accounts for two-thirds of oil consumption and is the largest carbon dioxide emitter, illustrating Uruguay's need to expand its public transportation infrastructure and transition to battery-powered electric vehicles in the long run.29 Most importantly, Uruguay must work towards integrated climate risk management to protect its vulnerable and populous coastal cities through hazard mapping, implementing early warning systems, building flood-resilient infrastructure, and developing advanced technological tools and information systems.41