Editorial

Climate Resilience Zone a smart move

Sunday, January 07, 2018

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The Caribbean's economic development over the last 20 years has been seriously hampered by adverse external economic events such as oil price spikes and the perennial damage from natural disasters, notably hurricanes.

These circumstances mutated into a full-blown existential crisis with the onset of the global financial fallout of 2008, which was compounded and intensified recently by the increasing frequency of more powerful hurricanes.

The Caribbean countries were the economies worst affected by the global economic crisis, according to research by the Inter-American Development Bank (IDB).

No Caribbean government has been successful in adjusting to the situation with or without the International Monetary Fund (IMF).

Economic growth has been anaemic and certainly not on a sustainable basis.

After nearly a decade, the Caribbean Community (Caricom) has failed to formulate a regional development strategy to address the crisis in a collective programme. However, all is not lost.

As Mr Rahm Emanuel, former White House chief of staff and mayor of Chicago famously said: “You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before”.

The Caricom countries most affected by the hurricanes of 2016, ironically the smallest countries, have responded with a very sound strategy which should be adopted and implemented by all the member states of the regional bloc.

The strategy is to make the Caribbean the first “Climate Smart Region”. It involves two interrelated aspects. First, environmental resilience — (a) moving the Caribbean islands to eliminate their costly dependency on fossil fuels and towards 100 per cent of their energy needs from renewable sources, and (b) embed resilience in the built environment and climate-resistant infrastructure.

Second, develop greater macroeconomic resilience through the use of insurance schemes and a reorientation of fiscal policy within a medium-to long-term planning trajectory.

The strategy is estimated to cost US$8 billion. The cost is enormous, but with the help of the international development institutions and bilateral development agencies it is not unrealistic over a five- to 10-year period. A key component is to design incentives for local and foreign private sector investment in both operations and serving the process.

Specifically, this bold plan encompasses five initial critical priorities:

To expand and improve the capacity of Caribbean countries and key regional institutions to plan for long-term resilience and climate smart growth strategies;

• Scaling up renewable energy as rapidly as possible to eliminate the dependence of Caribbean countries on the high cost of imported fossil fuels;

• Construct low-carbon and climate- resilient infrastructure to better withstand future extreme weather events;

• Build programmes to induce and facilitate the large public and private investments required; and

• Create innovative financing models such as debt-for-resilience swaps and macroeconomic policy reform packages in exchange for demonstrated progress on grants and investments to strengthen resilience and promote sustainable climate-smart growth.

The new initiative is commendable for its development vision, its long-term perspective, its imagination, and its timeliness.

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