Developed countries should lead the way in issuing instruments containing natural disaster clauses.
Minister in Economic Affairs and Investment, Marsha Caddle, suggested this recently, as she addressed the Inter-American Development Bank’s (IDB) virtual High Level Plenary on Natural Capital Mainstreaming and Finance on Biodiversity, Planning and Public Finance.
She was responding to a query about how the international community could fill the gap for investment in biodiversity and what its role would be in supporting a country like Barbados.
Minister Caddle said: “Now, we would like to see developed countries, multilateral development banks, and I know that the IDB has started some work on looking at this, be able to issue instruments that contain natural disaster clauses. We estimate that that will make available liquidity in the amount of over a trillion dollars, which now starts to approximate the financing gap for both adaptation and mitigation, which is on the order altogether of over six trillion.
“Six trillion is the financing gap to get us to 1.5, but also to make sure that the countries that are already starting to see considerable temperature rises can adapt to those temperature rises. So, we think that that’s one solid way. We do need to close the gap to 100 billion, but 100 billion doesn’t even begin to cover it. And so, we need those kinds of new instruments that would get us there.”
Minister Caddle, who stressed that the question was extremely important and critical, however, advised that it was impossible to separate the conversations on debt and financial resilience and how to recover post-COVID from the climate conversation.
She had earlier reminded her counterparts of a commitment to mobilise 100 billion coming out of the Paris Agreement that had not been met.
Emphasising this, she added: “I think that those countries on the front line of climate change have a real interest in seeing that met. Barbados is today the largest issuer of natural disaster clauses in the world, in the instruments that we issued post our debt restructuring.
“Now that means for us that in the event of a disaster, that for two years, we have some elbow room; that we will not have to meet those principal and interest repayment commitments. And, that means that we are able to invest in recovery in a way that makes sense.”