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Public-Private Insurance Partnerships Bolster Latin American/Caribbean Resilience

Globally, three of the ten most costly natural disaster events in the last 35 years occurred in total or in part in the Latin America/Caribbean (LAC) region; losses from Hurricane Matthew in the Caribbean are still being assessed.

Today, 80 percent of the LAC population lives in urban areas, second only to North America (82 percent) and well above the global average of 54 percent. The region’s 198 large cities (>200,000 residents) contribute over 60 percent of gross domestic product (GDP), and its 10 largest cities produce 50 percent of that total. As the region’s population, swelling middle class, urbanization and GDP concentration continue to grow, the effects of climate volatility will likely increase the impact of natural perils losses on these economies.

Damage from these losses as a proportion of GDP tends to be much higher than in developed economies (see tables 1 and 2). If the LAC region is to build on the economic and social gains of recent years, its governments must align with the private sector through public–private partnerships to improve risk management and disaster preparedness strategies.

The ultimate cost of catastrophe-event responses puts particular strain on the public balance sheets of emerging markets, increasing public debt and ultimately burdening taxpayers. Adding to the problem is the lack of insurance coverage in developing countries. Average property insurance penetration in developing countries was only 0.21 percent in 2014, compared to 0.77 percent in industrialized countries. Another estimate indicates only 3 percent of potential loss is currently insured in developing countries versus 45 percent in developed countries. Mature economies can also often fall back on fiscal safety nets to cover insurance shortfalls. The $83 billion budget appropriation approved by the U.S. Congress after Hurricane Katrina hardly registered on the U.S. budget, but most developing economies cannot afford such amounts. For example, a year after Hurricane Ivan hit Grenada in 2004, the country defaulted on its foreign debt.

The Maule, Chile earthquake of 2010 burdened the country with $32 million in economic losses, or 15.1 percent of GDP. Despite the high level of insurance coverage in Chile—even by developed world standards—75 percent of the costs were ultimately assumed by the government, leaving significant opportunity for the private sector to reduce the state’s financial burden.

Many recent catastrophe events in the Latin America/Caribbean region provide examples of the protection gap: Only 5 percent of the $8 billion economic loss from Haiti’s 2010 earthquake was insured; and the insured portion of the $2-3 billion economic loss caused by the April 2016 earthquake in Manta, Ecuador, is expected to reach no more than 15 percent. The 2016 earthquake has deeply impacted the local economy and government finances as unemployment increased by approximately 50 percent and the government was compelled to increase sales taxes by two percent to fund national reparation and recovery costs. In general, emerging markets face a much larger protection gap than developed economies:

Given the overall impact of catastrophes on public-sector finances, governments in Latin America are transitioning from an over-reliance on post-event disaster financing to a pre-event approach to disaster risk mitigation. Societies are realizing that transferring risk to the private sector provides efficient and cost-effective solutions that relieve already strained public-sector budgets.

The insurance industry also empowers the mechanisms and innovation needed to “build back better.” This concept relies on three key ideas—risk reduction, community recovery and implementation—to increase community resiliency. By improving building codes and land-use planning, cities can reduce the future vulnerability of their physical infrastructure. At the same time, social and economic recovery is supported through market-based incentives and subsidies to finance aid and reconstruction efforts. Finally, stakeholder education, legislation, regulation, community consultation and monitoring and evaluation must all be used to ensure compliance with appropriate and culturally sensitive standards and targets.

“Building back better” institutionalizes disaster assessment and recovery frameworks at the national, municipal and community levels as well as in the private sector, academia and civil organizations, improving coordination and risk governance. Sharing regional and global best practices and establishing international aid standards further supports sustainable recovery and reconstruction.

A Lesson in Resilience from Mexico

The Mexican federal government’s risk management strategy exemplifies a modern, resilient disaster preparedness plan, including pre- and post-event approaches and public–private partnerships. Following the 1985 Mexico City earthquake, the Mexican National Civil Protection System (SINAPROC) was created, establishing a multi-level system to integrate stakeholders from the three levels of government, the private and social sectors, academia and scientific organizations. Its purpose was to provide an institutional framework for the improved coordination of emergency response. Its capacities in the areas of risk assessment, early warning, preparedness and disaster risk financing were developed. As SINAPROC evolved, it added risk reduction practices to shift from a reactive to a preventative, holistic and integrated risk management plan.

Recognizing that risk comes from multiple factors—politics, land-use planning, cultural norms, and more—SINAPROC mainstreamed the plan throughout government, private and social sectors. Through the Secretariat of the Interior, it coordinates civil protection with other key policies, such as urban development, housing, climate change and education, by clearly identifying responsibilities. SINAPROC works with the Secretariat of National Defense and the Secretariat of the Navy to implement emergency preparedness, communication and relief and recovery plans in addition to creating institutions to set policies and budgets, develop best practices, coordinate government, promote social and private-sector agreements and research scientific and technological improvements in risk management. It also aligns with the Ministry of Foreign Affairs to oversee international compliance and assistance and establishes provisions for government accountability.

SINAPROC also created the General Risk Management Directorate to oversee financial risk management instruments in conjunction with private-sector stakeholders. One such instrument was developed in 1996 to respond to a continued need for post-event budget allocations. The Fund for Natural Disasters (FONDEN) is a transparent financial vehicle by which the federal government provides pre-event funding from tax revenues for post-disaster response and reconstruction. Its resources are allocated by law, and distributions are made by the state-owned development bank from sub-accounts dedicated to specific reconstruction programs.

Through FONDEN, the Mexican government established relationships with international capital and reinsurance markets that have proven critical in accessing risk transfer schemes. In 2006 it purchased Mexico’s first catastrophe bond, Cat Mex. In 2009, it replaced Cat Mex with the MultiCat Mexico bond, expanding earthquake coverage and adding hurricane coverage. The bond was renewed again in 2012 before making a $50 million payment to the Mexican government for losses from 2015’s Hurricane Patricia. SINAPROC further mitigated the storm’s impact by using its early warning system to evacuate most of the affected population, resulting in only a handful of casualties despite the fact that Patricia was the second-most intense tropical cyclone on record.

In 2011, FONDEN also placed a traditional insurance program covering 100 percent of the federal government’s assets. To incentivize prevention, it covers up to 50 percent of provincial assets if municipalities implement formal risk transfer strategies. The program renewed in 2012 with over 40 international reinsurers and demonstrated considerable buying power by convincing the market to accept its own damage assessment and adjustment procedures.

Mexico’s risk management strategy has earned a strong reputation in the international community. The World Bank said it is “at the vanguard of initiatives aimed at the development of an integrated disaster risk management framework, including the effective use of risk financing and insurance mechanisms to manage the fiscal risk derived from disasters,” highlighting it as an example for other governments to follow.

Another market leader in public–private partnerships, CCRIF SPC(formerly the Caribbean Catastrophe Risk Insurance Facility) is the world’s first multi-country-risk-pool-utilizing parametric insurance backed by both traditional insurers and capital markets. Created in 2007 with the support of the World Bank, the government of Japan, and other donors, CCRIF provides protection against earthquakes, hurricanes, and excessive rainfall to 17 Caribbean and Central American countries. Leveraging its diverse portfolio, the facility provides affordable reinsurance for members through catastrophe swaps with the reinsurance market. In 2014 it accessed catastrophe bond markets for the first time with a three-year, USD 30 million bond covering hurricanes and earthquakes, providing CCRIF multi-year access to reinsurance at a fixed price.

The risk pool mitigates cash flow problems faced by its members after major natural disasters by providing rapid, transparent payouts to assist with initial disaster responses. It has made 22 payouts to 10 members for a total of $69 million, all within 14 days. CCRIF was the first to pay claims associated with the 2010 Haiti earthquake and has paid out more than $29 million in response to 2016’s Hurricane Matthew.

Microinsurance Helping Close Insurance Gap

Not to be outdone, the private sector has demonstrated its commitment to bringing insurance solutions to emerging economies through the industry consortium and venture incubator Blue Marble Microinsurance. Blue Marble’s founding consortium has committed to launching 10 microinsurance ventures in the next 10 years to deliver risk management solutions to the underserved. Through collaboration with strategic partners, including government and quasi-government entities and innovative technology-enabled platforms, Blue Marble seeks to improve sustainability by expanding the role of insurance in society. These ventures will consider unique distribution methods, local partnerships, product development and impact services.

Blue Marble is currently working to close the protection gap in the risk that climate change poses to smallholder farmers in Latin America with the intention to launch pilots in 2017. Blue Marble understands the value of public sector–private sector partnerships in achieving its mission; it is coordinating its initiatives to bolster agricultural production and the management of associated risks with local government officials, including Ministers of Agriculture.

Given the recent slowdown in global demand for commodities and the persistent social inequalities and corruption in some nations, it is more important than ever for governments in the Latin America/Caribbean region not only to protect the economic and social gains made in the last decade, but provide the systems and institutions to promote further sustainable growth. Partnering with the private sector ensures the best practices, innovations and risk reduction and management techniques of the insurance industry are combined with the risk knowledge of regional governments, thereby ensuring resilient cities and communities are poised for strong future growth.

Insurance Natural Disasters Risk Mitigation

Aidan Pope

CEO for Latin America and the Caribbean at Guy Carpenter

Aidan Pope is the CEO for Latin America and the Caribbean at Guy Carpenter. He has more than 30 years of experience in the LAC treaty reinsurance business. Prior to joining the firm, he established offices in Mexico and Brazil for his previous employer.

Credit: Brink News

Green jobs boom: The frontline of the new solar economy

The growth in renewable energy is fuelling new jobs in Asia and Africa. Meet three beneficiaries of the new green economy from Zambia, Pakistan and Kenya

Placing solar panels on roof of house to charge, Longisa, Bomet district, Kenya
Placing portable solar panels on roof of house to charge, Longisa, Bomet district, Kenya Photograph: Corrie Wingate
 While the price of oil is plummeting, taking with it a significant number of jobs, the renewable energy job market is booming. It is estimated that it will grow to 24m jobs worldwide by 2030 – up from 9.2m reported in 2014 – according to analysis by the International Renewable Energy Industry (Irena), which predicts that doubling the proportion of renewables in the global energy mix would increase GDP by up to $1.3tn across the world.

The rise and rise of the solar industry has been the largest driver of growth. In 2014, it accounted for more than 2.5m jobs, largely in operations, maintenance and manufacturing – now increasingly dominated by a jobs boom in Asia.

The industry is providing hope and income to workers – present and future – across the global south.

Sheila Mbilishi, ‘solar-preneur’, Zambia

Although employment in renewable energy is comparatively low across Africa, the sunny continent is where the need and potential for employment is perhaps greatest. A fast-growing economy and population is driving demand for energy, but two-thirds of people in sub-Saharan Africa still lack access to electricity.

Now the renewables revolution is witnessing the rise of a generation of African “solar-preneurs” who are creating small-scale businesses by taking solar energy – in the form of lights, radios and mobile-phone charging facilities – into local communities.

In western Zambia, Sheila Mbilishi is self-employed and sells solar lights to local residents and businesses. The 67-year-old widow and mother of six buys the lights for $5 from the social enterpriseSunnyMoney – part of the UK based charity SolarAid – and sells them on with a 50% profit margin.

“They sell like cupcakes,” says Mbilishi. “There is life in the lights – people got interested in them.” They are popular with pupils who want to study after dark, businesses during electricity blackouts or as a replacement for toxic kerosene lamps in homes.

Since starting the business three years ago, it has provided Mbilishi with a significant source of income, helping her to open a shop and build a two-bedroom flat. “The difference is huge,” she says. “Selling lights has helped me a lot. I have built a house out of the lights. Owning personal ones has helped me too with the current load shedding – electricity is usually off and I am not affected by no light.”

Shehak Sattar, renewable energy student, Moscow

For Shehak Sattar, choosing to study renewable energy was more a social than a personal decision. “I want to practise something different from the mainstream. It is related to the concept of believing in humanity and our survival on earth,” he says.

Shehak Sattar at the ational University of Science and Technology in Moscow

FacebookTwitterPinterest: Shehak Sattar at the National University of Science and Technology in Moscow Photograph: National University of Science and Technology in Moscow

The 27-year-old Pakistani student is now four months into a masters degree in the science and materials of solar energy at the National University of Science and Technology in Moscow, funded by a scholarship. The course is in its first year and has mostly attracted international students – from Afghanistan and Iran to Nigeria and Namibia.

Before coming to Moscow, Sattar worked for NGOs and other agencies in Pakistan, installing and spreading the transmission of solar energy to remote communities and to slums in Islamabad and Lahore. Larger solar projects are now starting to come online in Pakistan, amid ambitions to construct the world’s largest solar farm.

“There has been a general electricity crisis in Pakistan. People are waiting for alternatives to rescue them from this suffering,” he says.

Once he has completed his course, Sattar wants to work at a university in Pakistan “to convert the attention of students to renewable energy sources” by lecturing and researching methods to make solar energy more efficient.

“We have to fight more,” he says. “We have to fight against the people who will be digging for petroleum in the coming 20 years because it will destroy our ecology’s balance.”

Mohamed Abdikadir, solar panel installer, Dadaab, Kenya

The promise of renewable energy in refugee camps could save humanitarian agencies hundreds of millions of dollars and provide job opportunities for thousands of young refugees.

Mohamed Abdikadir, 21, was born in the refugee camp complex at Dadaab in eastern Kenya, where the average family spends $17.20 per month – 24% of their income – on energy. The complex is home to more than 330,000 refugees.

Like most of his neighbours, Abdikadir’s family came to the camp after fleeing the civil war in Somalia more than two decades ago. Both his parents have since died, leaving Abdikadir to provide for his 10 younger siblings. He is now one of 5,000 young people trained to install solar panels as part of a programme in Kenya and Ethiopia organised by the Norwegian Refugee Council (NRC), which has recruited local teachers to deliver it.

Solar panels in Dadaab refugee camp
Solar panels in Dadaab refugee camp Photograph: NRC

“It was hard [to learn] at first but I tried my best and now it is easy,” says Abdikadir. After completing a six-month programme a year ago, he gets up at 5am every day to pray before preparing breakfast and collecting the tools for his job in Dadaab’s dry desert landscape. “There is a lot of sun here.Renewable energy is very good in this environment.”

Before he started the programme, Abdikadir earned money by selling water but he could only make enough to provide one meal a day for his family. Now, with the extra income from solar installations – $10 on an average day – his siblings are eating three meals daily, have new clothing and are able to attend a fee-paying school.

“I am the breadwinner of the family,” he says. “[The programme] has really helped me. Before I was idle. It helps with my daily bread, my daily income.”

Abdikadir now wants to expand his education to incorporate other forms of renewable energy. Meanwhile, the NRC recently announced plans to deliver a similar programme on a larger scale for Syrians at Zaatari refugee camp in Jordan.

Credit: The Guardian

Japan and UNDP launch climate change project in eight Caribbean countries

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Members of the J-CCCP Project Board following the project launch

The government of Japan and the United Nations Development Programme (UNDP) launched the US$15 million Japan-Caribbean climate change partnership (J-CCCP) on Thursday, in line with the Paris Agreement on Climate Change, to keep global warming below 2 degrees Celsius and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above pre-industrial levels.

The launch follows a two-day meeting with more than 40 representatives from eight Caribbean countries, including government officials, technical advisors, NGO and UN partners to set out a roadmap to mitigate and adapt to climate change, in line with countries’ long-term strategies.

The new initiative will help put in practice Caribbean countries’ actions and policies to reduce greenhouse gas emissions and adapt to climate change, such as nationally appropriate mitigation actions (NAMAs) and national adaptation plans (NAPs). It will also boost access to sustainable energy and help reduce fossil fuel imports and dependence, setting the region on a low-emission development path, while addressing critical balance of payments constraints.

“The government of Japan is pleased to partner with UNDP. It is envisaged that the project will also contribute to building a platform for information sharing in developing and implementing climate change policies and promoting the transfer of adaptation and mitigation technologies. Japan expects, through pilot projects and information sharing, the project will enable the Caribbean countries to enhance their capacity to cope with climate change and natural disasters,” said Masatoshi Sato, minister-counsellor and deputy head of mission at the embassy of Japan in Trinidad and Tobago, stressing that the partnership will also promote South-South and North-South cooperation, including study tours to Japan for government officials and technical advisors.

Participating countries include Belize, Dominica, Grenada, Guyana, Jamaica, Saint Lucia, St Vincent and the Grenadines, and Suriname, benefitting an estimated 200,000 women and men in 50 communities.

“This partnership comes at a critical time in our nation’s sustainable development programme,” said Gloria Joseph, permanent secretary in the ministry of planning, economic development and investment in Dominica. “Dominica has experienced firsthand the devastating and crippling effect that climate change can have on a nation’s people, their livelihoods and economy, risking losing up to 90 percent of Gross Domestic Product (GDP) due to a tropical storm or hurricane. Dominica stands ready and welcomes the opportunity to benefit from early response warning systems, climate change adaptation and disaster risk reduction measures as it seeks to restore and ‘build back better’.”

Climate change is recognised as one of the most serious challenges to the Caribbean. With the likelihood that climate change will exacerbate the frequency and intensity of the yearly hurricane season, comprehensive measures are needed to protect at-risk communities. Boosting resilience is crucial for the region’s development and is a clear part of UNDP’s global strategic plan of programme priorities.

Negative impacts on land, water resources and biodiversity associated with climate change have also been predicted with the potential to affect shoreline stability, the health of coastal and marine ecosystems and private property, as well as ecosystem services. Increasing coastal erosion and severe coral reef bleaching events are already evident in some locations.

“UNDP has been championing the cause of climate change in the Caribbean for many years and we are pleased to partner with the Government of Japan toward the implementation of climate change projects in eight Caribbean countries,” said Rebeca Arias, regional hub director for UNDP’s Bureau for Latin America and the Caribbean. “In light of the COP21 agreement, these projects are timely in assisting countries to respond more effectively to the impacts of climate change and to increase their resilience through actions today to make them stronger for tomorrow.”

Credit: Caribbean News Now

Tackling climate change in the Caribbean

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Sanchez, Petite Martinique. Climate-Proofing the tiny island of Petite Martinique includes a sea revetment 140 metres long to protect critical coastal infrastructure from erosion. (Photo: TECLA  FONTENAD/IPS)

The world is still celebrating the Paris Agreement on Climate Change, the main outcome of the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change. Its ambitions are unprecedented: not only has the world committed to limit the increase of temperature to “well below 2°C above pre-industrial levels,” it has also agreed to pursue efforts to “limit the temperature increase to 1.5 °C.”

This achievement should be celebrated, especially by Small Island Development States (SIDS), a 41-nation group—nearly half of them in the Caribbean—that has been advocating for increased ambition on climate change for nearly a quarter century.

SIDS are even more vulnerable to climate change impacts — and risk losing more. Global warming has very high associated damages and costs to families, communities and entire countries, including their Gross Domestic Product (GDP) according to the Intergovernmental Panel on Climate Change.

What does this mean for the Caribbean? Climate change is recognized as one of the most serious challenges to the Caribbean. With the likelihood that climate change will exacerbate the frequency and intensity of the yearly hurricane season, comprehensive measures are needed to protect at-risk communities.

Moreover, scenarios based on moderate curbing of greenhouse gas emissions reveal that surface temperature would increase between 1.2 and 2.3 °C across the Caribbean in this century. In turn, rainfall is expected to decrease about 5 to 6 per cent. As a result, it will be the only insular region in the world to experience a decrease in water availability in the future.

The combined impact of higher temperatures and less water would likely result in longer dry periods and increased frequency of droughts, which threaten agriculture, livelihoods, sanitation and ecosystems.

Perhaps the most dangerous hazard is sea level rise. The sea level may rise up to 0.6 meters in the Caribbean by the end of the century, according to the Intergovernmental Panel on Climate Change. This could actually flood low-lying areas, posing huge threats, particularly to the smallest islands, and impacting human settlements and infrastructure in coastal zones. It also poses serious threats to tourism, a crucial sector for Caribbean economies: up to 60 per cent of current resorts lie around the coast and these would be greatly damaged by sea level increase.

Sea level rise also risks saline water penetrating into freshwater aquifers, threatening crucial water resources for agriculture, tourism and human consumption, unless expensive treatments operations are put into place.

In light of these prospects, adapting to climate change becomes an urgent necessity for SIDS—including in the Caribbean. It is therefore not surprising that all Caribbean countries have submitted a section on adaptation within their Intended Nationally Determined Contributions (INDCs), which are the voluntary commitments that pave the way for the implementation of the Paris Agreement.

In their INDCs, Caribbean countries overwhelmingly highlight the conservation of water resources and the protection of coastal areas as their main worries. Most of them also consider adaptation initiatives in the economic and productive sectors, mainly agriculture, fisheries, tourism and forestry.

The United Nations Development Programme (UNDP) has been supporting Caribbean countries in their adaptation efforts for many years now, through environmental, energy-related and risk reduction projects, among others.

This week we launched a new partnership with the Government of Japan, the US$15 million Japan-Caribbean Climate Change Partnership (J-CCCP), in line with the Paris Agreement on Climate Change. The initiative will be implemented in eight Caribbean countries: Belize, Dominica, Grenada, Guyana, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Suriname, benefitting an estimated 200,000 women and men in 50 communities.

It will set out a roadmap to mitigate and adapt to climate change, in line with countries’ long-term strategies, helping put in practice Caribbean countries’ actions and policies to reduce greenhouse as emissions and adapt to climate change. It will also boost access to sustainable energy and help reduce fossil fuel imports and dependence, setting the region on a low-emission development path, while addressing critical balance of payments constraints.

When considering adaptation measures to the different impacts of climate change there are multiple options. Some rely on infrastructure, such as dikes to control sea level rise, but this can be particularly expensive for SIDS, where the ratio of coastal area to land mass is very high.

In this context, ecosystem-based adaptation activities are much more cost-effective, and, in countries with diverse developmental priorities and where financial resources are limited, they become an attractive alternative. This means healthy, well-functioning ecosystems to boost natural resilience to the adverse impacts of climate change, reducing people’s vulnerabilities as well.

UNDP, in partnership with national and local governments in the Caribbean, has been championing ecosystem-based adaptation and risk reduction with very rewarding results.

For example, the Government of Cuba partnered with UNDP, scientific institutes and forestry enterprises to restore mangrove forests along 84 km of the country’s southern shore to slow down saline intrusion from the sea level rise and reduce disaster risks, as the mangrove acts as a protective barrier against hurricanes.

In Grenada, in coordination with the Government and the German International Cooperation Agency, we supported the establishment of a Community Climate Change Adaptation Fund, a small grants mechanism, to provide opportunities to communities to cope with the effects of climate change and extreme weather conditions. We have engaged with local stakeholders to develop climate smart agricultural projects, and climate resilient fisheries, among other activities in the tourism and water resources sectors.

UNDP’s support is directed to balance social and economic development with environmental protection, directly benefitting communities. Our approach is necessarily aligned with the recently approved 2030 Sustainable Development Agenda and its associated Sustainable Development Goals, delivering on protecting ecosystems and natural resources, promoting food security and sanitation, while also helping reduce poverty and promoting sustainable economic growth.

While there is significant potential for climate change adaptation in SIDS, it will require additional external resources, technologies and strengthening of local capacities. In UNDP we are ideally placed to continue working hand-in-hand with Caribbean countries as they implement their INDCs and find their own solutions to climate-change adaptation, while also sharing knowledge and experiences within the region and beyond.

 

Jessica Faieta is United Nations Assistant Secretary General and UNDP Regional Director for Latin America and the Caribbean.

 

 

Credit: Caribbean 360

Caribbean seeks to take full advantage of new U.N. climate fund

Dr Kenrick Leslie, CBE; Credit: Earl Green

Dr Kenrick Leslie, CBE; Credit: Earl Green

The South Korea-based Green Climate Fund (GCF) is open for business, and Caribbean countries are hoping that it will prove to be much more beneficial than other global initiatives established to deal with the impact of climate change.

“Despite our region’s well-known, high vulnerability and exposure to climate change, Caribbean countries have not accessed or mobilised international climate finance at levels commensurate with our needs,” said Dr. Warren Smith, the president of the Barbados-based Caribbean Development Bank (CDB).

The CDB, which ended its annual board of governors meeting here on Thursday, May 29, had the opportunity for a first-hand dialogue on the operations on the GCF, through its executive director, Hela Cheikhrouhou, who delivered the 15th annual William Demas Memorial lecture.

But even as she addressed the topic “The Green Climate Fund; Great Expectations,” Smith reminded his audience that on a daily basis the Caribbean was becoming more aware of the severe threat posed by climate change.

“Seven Caribbean countries…are among the top 10 countries, which, relative to their GDP, suffered the highest average economic losses from climate-related disasters during the period 1993-2012.

“It is estimated that annual losses could be between five and 30 percent of GDP within the next few decades,” he added.

According to a Tufts University report, published after the 2007 Intergovernmental Panel on Climate Change (IPCC) study and comparing an optimistic rapid stabilisation case with a pessimistic business-as-usual case, the cost of inaction in the Caribbean will have dramatic consequences in three key categories. Namely hurricane damages, loss of tourism revenue and infrastructure damage due to sea-level rise.

The costs of inaction would amount to 22 percent of GDP for the Caribbean as a whole by 2100 and would reach an astonishing 75 percent or more of GDP by 2100 in Dominica, Grenada, Haiti, St. Kitts and Nevis, and Turks and Caicos.

“In the Caribbean, the concern of Small Island Developing States is all too familiar – the devastating effects of hurricanes have been witnessed by many. Although Caribbean nations have contributed little to the release of the greenhouse gases that drive climate change, they will pay a heavy price for global inaction in reducing emissions,” Cheikhrouhou warned.

Executive director of the Belize-based Caribbean Community Climate Change Centre (CCCCC), Dr. Kenrick Leslie told IPS that regional countries were now putting their project proposals together to make sure they could take full advantage of the GCF.

“The CARICOM [Caribbean Community] heads of government, for instance have asked the centre to help in putting together what they consider bankable projects and we are in the process of going to each member state to ensure that we have projects that as soon as the GCF comes on line we would be among the first to be able to present these projects for consideration.”

Leslie said that in the past, Caribbean countries had been faced with various obstacles in order to access funds from the various global initiatives to deal with climate change.

“For instance if we mention the Clean Development Mechanism [CDM], the cost was prohibitive because our programmes were so small that the monies you would need upfront to do it were not attractive to the investors.”

He said the Caribbean also suffered a similar fate from the Adaptation Fund, noting “we have moved to another level where they said we will have greater access, but again the process was much more difficult than we had anticipated.”

The GCF was agreed at the 16th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Cancun, Mexico.  Its purpose is to make a significant contribution to the global efforts to limit warming to 2°C by providing financial support to developing countries to help limit or reduce their greenhouse gas emissions, and to adapt to the unavoidable impacts of climate change. There are hopes that the fund could top 100 billion dollars per annum by 2020.

“Our vision is to devise new paradigms for climate finance, maximise the impact of public finance in a creative way, and attract new sources of public and private finance to catalyse investment in adaptation and mitigation projects in the developing world,” the Tunisian-born Cheikhrouhou told IPS.

She said that by catalysing public and private funding at the international, regional, and national levels through dedicated programming in climate change mitigation and adaptation, and as a driver of climate resilient development, the GCF is poised to play a relevant and timely role in climate action globally.

Cheikhrohou said that it would be most advisable if Caribbean countries “can think of programmatic approaches to submit proposals that are aggregating a series of projects or a project in a series of countries.”

She said that by adopting such a strategy, it would allow regional countries “to reach the scale that would simplify the transaction costs for each sub activity for the country” and that that she believes the GCF has “built on the lessons learnt from the other mechanisms and institutions in formulating our approach.

“To some extent there is embedded in the way of doing work this idea of following the lead of the countries making sure they are the ones to come forward with their strategic priorities and making sure we have the tools to accompany them through the cycle of activities, projects or programmes starting with the preparatory support for the development of projects,” she told IPS.

Selwin Hart, the climate change finance advisor with the CDB, said the GCF provides an important opportunity for regional countries to not only adapt to climate change but also to mitigate its effects. He is also convinced that it would assist the Caribbean move towards renewable energy and energy efficiency.

“The cost of energy in the Caribbean is the highest in the world. This represents a serious strike on competitiveness, economic growth and job creation and the GCF presents a once in a lifetime opportunity for countries to have a stable source to financing to address the vulnerabilities both as it relates to importing fossil fuels as well as the impacts of climate change,” he said.

Credit: Thomas Reuters Foundation; CMC/pr/ir/2014

Tourism And Health Programme Launched

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Closures of hotels and cruise ports due to outbreaks of communicable diseases, environmental challenges like climate change, and poor health and wellness in the tourism workforce, can result in significant losses  in revenue.

These were the major catalysts for the Caribbean Public Health Agency (CARPHA) and the Caribbean Tourism Organisation (CTO) partnering to address issues affecting health and tourism in the Caribbean region.

During CARPHA’s Health Research Conference in Aruba last Friday, CARPHA and CTO launched an innovative Regional Tourism and Health Programme geared at strengthening the links between tourism, health and environment for more resilient and sustainable tourism in the Caribbean.

Minister of Tourism of Antigua & Barbuda John Maginley, a longstanding champion in the region for the establishment of this programme, and one of the first to invest seed funding, delivered the keynote address at the launch meeting. Minister Maginley recalled his hotel experiences in which millions of dollars in revenue were lost because of food-borne illnesses and other health problems.

He said negative events can cripple the region’s tourism industry and recognised the need for training, standards, and clear regional protocols to protect the industry. Minister Maginley believes that this programme will change the way the Caribbean moves forward with tourism and will create a new brand awareness.

Premier and Minister of Tourism of the Turks and Caicos Islands Dr Rufus Ewing said that tourism is the mainstay of many of the economies of Caribbean nations and contributes to more than 50 per cent of their gross domestic product (GDP). However, he also pointed out that the tourism industry is constantly under threat as the speed and frequency of travel from other regions bring new and emerging diseases.

He described recent firsthand experiences with norovirus outbreaks on cruise ships that spread to the resident population. He explained that an adverse event on one island in the Caribbean is generalized in international forums, as being the Caribbean as a whole, and in turn negatively impacts the tourism industry of all islands.

Dr Ewing added that along with an increasing number of violent crimes and reduced safety of visitors and residents alike, collaborative action becomes critical, if the region is to achieve a profitable and sustainable tourism industry.

Executive Director of CARPHA Dr C James Hospedales noted that outbreaks of food and water-borne diseases may be the most common health problem in visitors with major negative economic impact. He said “in the early 2000’s, within a five-year period, losses of over US$250 million were estimated to have occurred in the Caribbean tourism industry due to preventable outbreaks.”

Further, Dr Hospedales spoke of major environmental challenges including beach water quality. He said hotels and tourism facilities face challenges of water and energy conservation to reduce carbon footprints, not to mention the overarching threat of climate change. He informed the audience that the Caribbean Community Climate Change Centre had agreed that joint action with the health
sector and environment was essential to improving resilience and mitigating and preventing the problem.

In fact, according to Dr Hospedales, a 10 percent improvement in the energy efficiency of the Region’s hotels could significantly contribute to the reduction of greenhouse gases, as well as improve financial performance.

Dr Hospedales reminded those in attendance of the additional issue of the health and wellbeing of the tourism workforce and preventable costly epidemics of overweight and non-communicable diseases (NCDs) affecting the entire work force. He pointed out that high levels of overweight and obesity, hypertension and diabetes, are prevalent among the staff and decrease productivity and increase health costs. Dr Hospedales added that the tourism workforce health and wellness component of the programme will be led by the Caribbean Tourism Organization, with support from CARPHA.

Credit: Official Website for the Government of Antigua and Barbuda

Caribbean urged to brace for impact of climate change

Water, Land, Environment and Climate Change Minister, Robert Pickersgill (left), I discussions with CCCCC Executive Director, Dr. Kenrick Leslie (right) (JIS PHOTO)

Water, Land, Environment and Climate Change Minister, Robert Pickersgill (left), I discussions with CCCCC Executive Director, Dr. Kenrick Leslie (right) (JIS PHOTO)

A two-week regional training workshop on climate change has started here with a warning that the Caribbean could suffer billions of dollars in losses over the next few years as a result of climate change.

“As a region, we have to assist each other in every conceivable way imaginable,” said Water, Land, Environment and Climate Change Minister Robert Pickersgill at the start of the workshop that is being organised by the Belize-based Caribbean Community Climate Change Centre (CCCCC) in partnership with several regional governments and the Mona campus of the University of the West Indies (UWI).

It is being held under the theme “The use of sector-specific biophysical models in impact and vulnerability assessment in the Caribbean”.

Pickersgill said that Caribbean countries needed to work together to boost technical expertise and infrastructure in order to address the effects of the challenge.

He said global climate change was one of the most important challenges to sustainable development in the Caribbean.

Citing a recent report from the Inter-governmental Panel on Climate Change (IPCC), he noted that while the contribution of Caribbean countries to greenhouse gas emissions is insignificant, the projected impacts of global climate change on the Caribbean region are expected to be devastating.

Pickersgill said that according to experts, by the year 2050, the loss to the mainstay tourism industry in the Caribbean as a result of climate change-related impacts could be in the region of US$900 million.

In addition, climate change could cumulatively cost the region up to US$2 billion by 2053, with the fishing industry projected to lose some US$140 million as at 2015.

He said the weather activity in sections of the Eastern Caribbean over the Christmas holiday season was a prime example of this kind of devastation.

The low level trough resulted in floods and landslides in St. Vincent and the Grenadines, St. Lucia and Dominica. At least 15 people were killed and four others missing. The governments said they would need “hundreds of millions of dollars” to rebuild the battered infrastructures.

“For a country the size of St. Vincent and the Grenadines, this loss is significant and could result in their having to revise their GDP (gross domestic product) projections. (Therefore), while one cannot place a monetary value on the loss of lives, the consequences in terms of dollar value to Small Island Developing States (SIDS) is also important,” Pickersgill said.

“It only takes one event to remind us of the need to become climate resilient in a region projected to be at the forefront of climate change impacts in the future,” Pickersgill said, adding that he hoped the regional training workshop would, in some meaningful way, advance the Caribbean’s technical capabilities to meet the future projections head-on and be successful.

He said the workshop has particular relevance to Jamaica as one of the SIDS that is most vulnerable to climate change.

The two-week programme forms part of the European Union (EU)-funded Global Climate Change Alliance Caribbean Support Project, which is geared towards the creation and financing of policies that can reduce the effects of climate change as well as improved climate monitoring within the region.

The Global Climate Change Alliance project is to be implemented over 42 months and will benefit Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Jamaica, Grenada, Guyana, Haiti, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

CCCCC Programme Manager, Joseph McGann, said the project would include several activities including: enhancing national and regional institutional capacity in areas such as climate monitoring; data retrieval and the application of space-based tools for disaster risk reduction; development of climate scenarios and conducting climate impact studies using Ensemble modeling techniques; vulnerability assessments that can assist with the identification of local/national adaptation; and mitigation interventions.

CMC/id/ir/2014

Credit: CMC
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