One of the poorest countries in Central America, economic and social development in Honduras was significantly set back by Hurricane Mitch in 1998. Although slowly recovering from this event, above 65 per cent of the country’s 8.1 million people live in poverty (USDS, 2010). In recent years, Honduras has diversified its economy away from a historical dependence on the export of bananas and coffee; industry now forms more than a quarter of the country’s Gross Domestic Product (GDP). About 30 per cent of the country’s GDP comes from exports to the United States (CIA, 2011). The country’s largest source of foreign income is remittances, primarily from Hondurans living in the United States (USDS, 2010).

Honduras has submitted only one National Communication to the United Nations Framework Convention on Climate Change (UNFCCC) in 1997, laying out the actions that the governments has already taken and the analytical basis for its policy response to climate change and the commitment to take future actions within an official international framework. The Communication established the First National GHG Inventory with 1995 as its base year, it described the strategy to reduce GHG in Honduras, including for the agricultural and forestry sector and it included the results of vulnerability studies to climate change for the water sector.

A Second National Communication is in the works and scheduled to be completed by 2010. It aims to propose specific mitigation and adaptation measures to climate change for the various sectors of the economy through a Program of Mitigation and Adaptation to Climate Change. It will also include the Second National GHG Inventory with 2000 as its base year.

As a product of the Second National Communication, a National Climate Change Strategy is being prepared as well as set of policies aimed at generating mitigation and adaptation options at the national and local level for three priority sectors: energy (transportation), land use change and forestry (LUCF) and water resources.

The Project on Capacity building for Stage II adaptation to climate change (Costa Rica, Cuba, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama) is funded through the GEF Trust Fund and is implemented by UNDP. Central America, Mexico and Cuba serve as the pilot region for elaborating and applying an Adaptation Policy Framework for preparing adaptation strategies, policies and measures. The application of this framework will demonstrate how policy for adaptation can be integrated into national sustainable development for at least three human systems: water resources, agriculture and human health. This demonstration project builds upon the Stage I vulnerability and adaptation assessments of the Initial National Communications of the eight participating countries of the region and will prepare them to move onto Stage III Adaptation. The outputs of the project, Stage II adaptation strategies may be used for preparing second National Communications.