The Caribbean Development Bank (CDB) said it is continuing to work with countries in the region to build resilience recognising the impact of climate change on all aspects of economies.
“Climate change represents one of the greatest challenges in human history…It is no longer a hypothesis, but a fact that Small Island Developing States (SIDS) are among the most vulnerable to climate change, with Caribbean SIDS especially being exposed to more frequent and intense climate events.
Paradise as we know it is under severe threat,” the Bank’s Director of Economics, Ian Durant said.
Speaking at a Conference on the Economy hosted by The University of the West Indies, St Augustine on November 3, Durant highlighted the Bank’s interventions in the area and advocated for diverse strategies to safeguard the region’s future.
“Sustainable sources of funding for disaster risk management, including increasing access to concessional resources and targeted instruments, is a critical imperative to help the region build adaptive and climate-resilient infrastructure”.
Building resilience also involves advanced budgeting and planning, the Director indicated, adding that disaster risk management strategies in the economic domain must be developed and can include natural disaster and pandemic escape clauses in financing instruments, as well as budget reallocation, external credit, temporary tax increases and donor assistance.
According to Durant “In small, open economies… where foreign exchange earnings are critical to the orderly functioning of the economy, the interruption and extended loss of earnings erode foreign exchange buffers, interrupt livelihoods, create unemployment and usher in additional complications for macroeconomic management, frequently requiring countries to seek foreign exchange support, reorder development priorities and postpone the implementation of medium-term strategies.”
The CDB Executive also said that the Bank recognises that climate change is affecting not only the growth performance and fiscal and foreign exchange buffers, but it is also posing challenges for labour markets and eroding an already fragile physical capital stock. The finance focused initiatives would therefore seek to further curb the negative impact of climate events in the Caribbean.
Employment, income generation, the natural environment, quality of life, food security and production, were among the areas the DB official cited as being negatively affected by climate change.
Consequently, while providing financing for climate resilience, the CDB has also intervened by strengthening resilience through Disaster Risk Reduction and Disaster Risk Management.
The Bank has mainstreamed climate change and Disaster Risk Management into its operations; mobilised increased levels of concessionary resources; improved climate resilience in vulnerable sectors; strengthened the environment to support climate resilient measures; and improved the capacity in its Borrowing Member Countries to deliver in this area.
Additionally, the CDB has provided technical assistance to support improvements and build resilience capacity in critical areas such as physical infrastructure through building code development, and implementation alongside partner agencies.
Furthermore, the CDB has actively pursued research in priority areas to aid in building resilience through expanding access to concessional finance. It has advanced the Internal Resilience Capacity (IRC) and Recovery Duration Adjuster (RDA) Vulnerability and Resilience Framework to the international community.
These tools incorporate both vulnerability and resilience in addressing development challenges and provide a more equitable yardstick for providing access to concessional finance (CDB).