PARIS, France– The Caribbean Climate-Smart Coalition, an ambitious public-private initiative aimed at funding a US$8 billion investment plan to transform the region into the world’s first “climate-smart” zone and benefit 3.2 million Caribbean households, was launched December 12.
The coalition’s work will focus on coordinated action on four initial critical priorities:
`1- Scaling renewable energy as rapidly as possible to help free Caribbean countries from the high cost of imported fossil fuels and the high vulnerability of centralised distribution systems
2- Building low-carbon and resilient infrastructure including nature-based approaches, to better withstand future extreme weather events
3- Creating innovative financing models such as a debt-for-resilience swap initiative in exchange for demonstrated progress on policy reforms and investments to strengthen resilience and promote climate-smart growth pathways
4- Strengthening the capacity of Caribbean countries and key regional institutions to plan for long-term resilience and climate smart growth strategies
The announcement of the creation of the coalition came at the One Planet Summit, convened by the Government of France to review progress on the Paris climate agreement which was adopted two years ago today.
Caribbean leaders have brought together a coalition of global organizations such as the Inter-American Development Bank (IDB), the World Bank and the Caribbean Development Bank (CDB), as well as businesses and supporters from the Caribbean and the international community, that will help to establish partnerships that can make investment deals happen.
“Caribbean leaders have come together as a powerful collective to build a better future for the people of the Caribbean,” said Grenada’s Prime Minister Dr Keith Mitchell.
He added,“We welcome the financial commitments from our partners – around US$1.3 billion for recovery efforts and US$2.8 billion toward the vision shared by all members of the Coalition and others. This is a great first step.
“Now we need to turn this possibility into a set of realities that benefit all our people. We all need to work together to change the rules of the game to accelerate climate-smart financial flows for the Caribbean and other small island developing states. Together we can build thriving economies fuelled by clean energy, nature-based resilient design and innovation. The time for action is now.”
Dominican leader Roosevelt Skerrit added that despite the immense human suffering and economic damage caused by recent hurricanes, “the people of the Caribbean do not want to be just passive victims of climate change”.
“Rather, they want to be active participants in designing and implementing solutions, and for their Caribbean region to serve as a beacon of hope for island nations all over the world,” he said.
The IDB noted that in the wake of the devastating impacts of the category five Hurricanes Irma and Maria on the region in September, the Caribbean’s vulnerability to the effects of climate change is coming into sharper focus.
One IDB estimate indicates that the economic impact of the “new normal” climate effects under “business as usual” scenarios could exceed US$22 billion per year by 2050, roughly 10 per cent of the Caribbean’s current GDP.
In response, the IDB Group aims to develop a public and private investment framework for investing in resilient infrastructure, providing contingency resources for responding to disasters and approving additional loan financing to buttress the region’s policy framework for confronting climate and natural disaster risk.
The IDB Group will work with the CDB to support Organization of Eastern Caribbean States (OECS) borrowing member countries.
The IDB Group’s support will include new public and private-sector financing commitments of US$1 billion over the next five years. In tandem with its announced loan targets, the IDB Group also launched its Sustainable Islands Platform, designed to help island territories pursue sustainability and climate-resilient investments.
The Platform will benefit 11 Caribbean Basin island states and continental countries: The Bahamas, Barbados, Belize, Costa Rica, Dominican Republic, Haiti, Honduras, Jamaica, Nicaragua, Panama, Trinidad and Tobago.
It will promote economic growth and climate-resilient investments through an innovative approach that applies the principles of the Blue and Circular Economy.
The Blue Economy focuses on the sustainability of oceans and coastal areas, as opposed to land-based models, while the Circular Economy emphasizes reuse, recycling and the regeneration of natural capital such as mangrove swamps and barrier reefs.
Support for the private-sector activities associated with the Coalition will be coordinated by IDB Invest, the IDB Group’s private-sector arm, and will include partnering with impact investors, bilateral sources and other multilateral institutions on blended finance solutions, as well as the development of new instruments.