If Caribbean countries are to survive the impacts of climate change, then finding ways to make the money match their needs will be of paramount importance.
“It won’t be a rainbow that gets you to the pot of gold, it will be a framework that enables us to unlock the type of financing that we need for the actions that we committed to under the Paris Agreement in terms of mitigation, adaptation and loss and damage,” was how Ambassador Jeanine Felson, senior advisor on Climate Matters to the Alliance of Small Island States (AOSIS) and the Caribbean Community (CARICOM), put it last week Monday.
Ambassador Felson was among the regional experts speaking on Monday, November 14 at Aligning Climate Finance Flows with Caribbean Countries’ Climate Resilience Needs’, a panel discussion coordinated by Caribbean institutions at COP27 to highlight the challenges of and propose solutions around climate change in the region.
The panel was coordinated by the Caribbean Development Bank (CDB), the Caribbean Community Climate Change Centre (CCCCC) and the Organisation of Eastern Caribbean States (OECS) Commission and was an official side event at the United Nations’ climate change conference, which concluded in Sharm el-Sheikh, Egypt last Friday, November 20.
The CDB said in a release that speakers highlighted aspects that needed to be considered, incorporated or strengthened in the effort to build an overall framework that would allow Caribbean countries to be able to access more climate financing and use it effectively.
CDB Director of Projects, Daniel Best, spoke of the new framework which the CDB is proposing for determining access to finance by small island developing states, many of which are bedevilled by the twin dilemmas of being very climate vulnerable, but also being considered middle income and hence ineligible for concessional financing.
“CDB’s framework includes three tools: the IRC of a country, which estimates the ability to recover from an exogenous shock, the Recovery Duration Adjuster, to anticipate the length of the recovery period after a shock, which is much longer for developing countries when compared with developed countries, and the Vulnerability and Resilience Assessment Tool. These calculations will then provide a more judicious means of determining access to finance for small developing states,” stated Best.
However, he stressed that financing frameworks must be improved and strengthened across the world’s development financing system, adding:
“While international financial institutions may have pledged trillions of dollars to finance building resilience against the effects of climate change, those pledges may end up meaning very little if we do not strengthen the ‘architecture of the international financial system’ to ensure that these financial resources efficiently flow to developing countries and assist in meeting their development needs and boosting growth prospects”.
Head of the Climate Policy Unit at the European Investment Bank, Edward Calthrop shared how their institution was working to do just that, noting that as the largest provider of climate finance globally, the European Investment Bank is seeking to “work with public authorities to be able to quickly develop high quality studies to make sure infrastructure is designed for the future.”
“An important element for accelerating finance is having the capacity to deal with the resilience of projects…”
“Not just in the Caribbean, but globally, we need to get better and quicker at developing high design standards for infrastructure,” stated Calthorp.
Ways to accommodate for the issues of size and scale were also discussed with speakers noting it was a perennial issue for the region made up as it is of small states. Trinidad and Tobago’s Minister of Planning and Development, Pennelope Beckles, suggested ways this could be addressed in building out a framework that allows countries to be able to properly implement climate resilience projects, saying: “I think it is fair to say that attracting climate finance flows to the Caribbean is a multi-faceted issue. For flows of finance to be effective, recipients must be capable of receiving and utilising such financing. Given the unique nature of the Caribbean, it may also be necessary to create economies of scale that attract feasible investments and climate financing in order to maximise impacts.
“ This, of course, will require coordination and collaboration by all countries of the region to create a uniformed enabling environment across the region.”
The United Nations Climate Change Conference, COP27, which brought together more than 45,000 participants, ended with what has been described as a breakthrough agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate change disasters.