‘Investments for sustainable development’

Climate change ravishing vulnerable communities

“A CODE red for humanity” is how UN Secretary General António Guterres describes the recent report by the UN’s Climate Science Body – the Intergovernmental Panel on Climate Change.

The report indicates that “It is unequivocal that human influence has warmed the atmosphere, ocean and land. Since 1970, global surface temperatures have risen faster than in any other 50-year period over the past 2,000 years.” The panel states that

• This warming is “already affecting many weather and climate extremes in every region across the globe”.

• The past five years have been the hottest on record since 1850.

• The recent rate of sea level rise has nearly tripled, compared with the period 1901-1971.

• Human influence is “very likely” (90 per cent) the main driver of the global retreat of glaciers since the 1990s and the decrease in Arctic sea ice.

Additionally, they predict that the earth’s surface warming is projected to reach 1.5°C or 1.6°C in the next two decades, and that the world is at a tipping point.

Climate models project dire consequences for small islands as global temperatures rise. Temperature increases exceeding 1.5°C above pre-industrial levels will result in increased water stress, more intense rainfall during tropical cyclones, and increased exposure to irreversible sea level rise.

Against this background of present and future vulnerability to climate change, the Caribbean Community (CARICOM) and other small island developing states (SIDS) mooted the slogan ‘‘1.5 to Stay Alive’.’ The threshold of 1.5°C, it is argued, represents the global mean end-of-century temperature change with respect to pre-industrial times which must not be exceeded if Caribbean life is to remain ‘‘viable’’.

For centuries, the ravages of climate- and weather-related events and environmental degradation have impacted the most vulnerable among the people of lower income communities, the disabled, women, and children. Last year, climate-related disasters caused a record 55 million people to migrate. The UN estimates that environmental factors may cause the number of climate refugees to increase to between 25 million and one billion people by 2050. Climate change threatens global security and food production, affects people’s lives and livelihoods, and impacts heavily on governments’ coffers.

And according to the Swiss Re Institute, “The largest impact of climate change is that it could wipe off up to 18% of GDP off the worldwide economy by 2050 if global temperatures rise by 3.2°C. Climate change is a systemic risk that must be addressed now.”

For economic development to be effective, it needs to be implemented with a climate-aware lens to ensure inclusiveness and sustainability. Perhaps that’s why more than half of the Sustainable Development Goals are directly linked to the environment and/or address the need to sustain natural resources.

Opportunities for the Private Sector

Caribbean governments have committed to the Paris Agreement, and have acknowledged the importance of addressing the region’s vulnerability to climate change and natural disasters. However, amid the prevailing COVID pandemic, the public sector is even more severely constrained.

The private sector, traditionally dubbed ‘the engine of growth’, must play an even greater role in spearheading and being more involved in innovating high-impact, environmentally friendly and sustainable projects that benefit the people, the planet, and their bottom line.

The concept of the ‘triple bottom line’ is gaining traction, as businesses around the world are increasingly measuring social and environmental impact. Investors and customers are demanding sustainability, accountability, and transparency from companies. Given these developments and their own sense of corporate social responsibility, many companies are answering the call and are moving rapidly to contribute towards the SDGs and net-zero goals.

In the Caribbean, the private sector will need to better prepare and leverage the growing raft of opportunities associated with new business models and product offerings.

For example, as one of the world’s most tourism-dependent regions, the Caribbean is uniquely placed to help lead the way and showcase the blue economy and sustainable business models that are both powered by the ocean and protect the ocean. Wave energy and green hydrogen could be pioneered, and the Caribbean could become a model for climate adaptation, resilience, and circular economy technology.

Promoting sustainability in projects

As the region’s foremost development partner, we work closely with governments, private sector, and civil society to promote environmentally sustainable initiatives that will redound to the benefit of the people. We provide technical advice and financing, and play an important role in making the business case for sustainable investment, especially as it relates to clean energy and climate-smart, resilient initiatives. We are actively working to ensure that social and environmental safeguards are embedded in our projects, whether they be transportation, agriculture, energy, health, housing, sanitation, water, and even developing smart, sustainable cities.

In this way, we are reflecting our commitment to strengthen the global response to the climate change threat, which corresponds to the Sustainable Development Goal No. 13 – Climate Action. This is also in keeping with our Vision 2025 programme, which seeks to focus on and include proactive climate change action, the digital economy, and strengthening the SMEs ecosystem across Latin America and the Caribbean.

Give us your moonshots – let us help you bring them to reality

Last year we launched the Caribbean Pivot movement, which encouraged Caribbean visionaries and future leaders to share moonshots of what the Caribbean could look like in 2040 in key sectors such as tourism, electric mobility, and digital transformation.

We are keen in bringing to life some of these ambitious ideas to help the Caribbean overcome its challenges and become a global leader in these fields. To do so, we are actively looking forward to engaging more with private-sector actors, especially through IDB Invest, our private-sector arm, and IDB Lab, our creative and technological hub.

Today, as the COVID pandemic rages on, we are committed to building forward smarter and better. We have an ambitious programme to contribute towards financing the $3.5-billion infrastructure gap in the Caribbean, and leveraging infrastructure projects to make technological leaps in the region, which will help stimulate new jobs and create wealth. We believe a stronger partnership with the private sector in novel projects can help to bring about this change.

Here’s to stronger partnerships

In Jamaica, we have already partnered with the sector in several projects, including the hotel sector, the transport sector and a more recent bank partnership with the JMMB Group. There is the Water Project, an IDB Lab initiative, in partnership with JN Foundation, which promotes the integration of water-adaptation measures into new homes in Jamaica. Through other partnerships, such as with the Development Bank of Jamaica, our investments in programmes like the Boosting Innovation, Growth and Entrepreneurship Ecosystems and the Caribbean Climate Innovation Center are contributing to the further strengthening of the business ecosystem and more climate-smart, resilient initiatives.

We hope to encourage greater private-sector investment by partnering with the PSOJ in a series of deep discussions, to identify and remove barriers faced by the private sector when considering investment in Jamaica.

We congratulate the PSOJ on your 45th anniversary milestone, and we look forward to working with you even closer to create a more sustainable future for the people of Jamaica.