Without appropriate and effective action, the adverse effects of climate change could cost Caribbean countries up to 75% of the gross domestic product (GDP) by 2100. This according to Dr. Warren Smith, President of the Caribbean Development Bank (CDB) who spoke on Thursday, July 2, at the Caribbean High-Level Symposium on Sustainable Development at the 36th Conference of the Heads of Government of the Caribbean Community (CARICOM). Dr. Smith delivered opening remarks entitled: Resilient Economies: Caribbean Sustainability in the Global Economy.
“Climate change can have devastating long-term impact on growth and development of the Caribbean. The projected cost of inaction is estimated to be at least 75% of GDP by the year 2100 in Dominica, Grenada, Haiti, St. Kitts and Nevis, and Turks and Caicos Islands, with smaller, but still relatively high levels for a number of the other countries,” Dr. Smith said.
He also identified that, in addition to addressing climate change, ensuring economic sustainability for Caribbean countries requires improving economic resilience by several measures, especially by decreasing dependence on fossil fuel.
“A key component of our economic vulnerability is also related to energy. Imported fossil fuels account for about 95% of our energy needs. This skewed import dependence has resulted in considerable price volatility and has contributed, in large part, to the competitiveness challenges that many Caribbean industries currently face…By reducing our heavy dependence on imported fossil fuels through greater uptake of renewable energy and increased energy efficiency, our economies could become more competitive,” Warren Smith said.
In order to encourage robust and sustainable Caribbean growth , Dr. Smith identified important steps that can be made at the national level, namely: managing investor risk and facilitate investment; sound public debt management strategy; increasing openness and integration into the global economy; investment in appropriate disaster risk management and climate adaptation measures and diversifying fuel sources.
He noted that CDB has been working closely with its 19 borrowing member countries to improve economic resilience since the bank’s inception 45 years ago and has placed special focus on renewable energy as the viable option for sustainable growth. Dr Smith outlined some measures the Bank is currently undertaking, noting that the Bank has been preparing for accreditation to both the Adaptation Fund and the Green Climate Fund, which will unlock considerable dedicated climate financing. In addition, CDB has been:
- developing, in partnership with UK AID, Inter-American Development Bank (IDB), and the European Union, financing structures for the region;
- co-operating with IDB and Japan International Cooperation Agency (JICA) to make available appropriately-priced financing for the development of the geothermal industry in the OECS countries ;
- and recently signed on to the European Union-Caribbean Investment Facility (EU-CIF), to support a new Sustainable Energy for the Eastern Caribbean Programme, which will promote renewable energy and energy efficiency..
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“CDB has been steadfast in its resolve to raise awareness amongst its BMCs of the needto build sustainability and resilience into their development agenda…Reaping policy dividends will only be achieved if we are prepared to take bold and decisive actions in those areas that strengthen our economic and environmental resilience,” Warren Smith said.
The High Level Strategic Dialogue took place under the theme, CARICOM: Vibrant Societies, Resilient Economies, A Partnership for Implementation, and allowed for CARICOM Heads of Government to engage the United Nations Secretary-General, Ban Ki-Moon on issues relating to the region’s sustainable development agenda.
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