Investing in Climate Change

Caribbean Climate-Smart Zone Strives to Be Global Model of Resiliency


Caribbean nations are banding together to launch the Caribbean Climate-Smart Accelerator. The 26-country coalition ultimately aims to create the world’s first “climate-smart zone,” a coordinated effort to increase clean energy and improve resilience in the face of the growing threat of climate change.

Creating Hope in the Wake of Environmental Peril

While leaders of the effort tout the economic benefits of planning for the future, they are equally driven by the devastation wrought by the three hurricanes that hit the Caribbean and the Gulf Coast between August 17 and September 21, 2017. First came Harvey, which dropped a staggering 60.5 inches of rain in the Houston area, damaging more than 200,000 homes. Irma followed, crossing the Virgin Islands, Barbuda, Saint Martin, and other islands with sustained winds of 185 miles per hour. Last came Maria, which killed more than 4,600 people in Puerto Rico and knocked out the power grid for a year on parts of the island.

Researchers say that hurricanes may not become more frequent due to climate change, but they may become more intense, with higher wind speeds and heavier rain. Increased hurricane damage could cost the Caribbean $22 billion per year by 2050.

That said, the leaders of the Climate-Smart Coalition are optimistic about the future they can forge by bringing the region’s nations together. Instead of being “defined by disaster,” they write that they seek to “create a new narrative, a story of hope, resilience, and opportunity.”

Accelerating Environmental Advancement

The coalition was originally the product of 12 countries — and Virgin Group founder Sir Richard Branson — at French president Emmanuel Macron’s One Planet Summit, held in Paris in December 2017. Having expanded to 26 countries and 40 participating organizations, the project took a step forward on August 9, 2018, with the creation of the Caribbean Climate-Smart Accelerator.

Speaking at the launch of the accelerator, Andrew Holness, prime minister of Jamaica, said, “Being climate-smart means putting the people of the Caribbean at the center of all we do—to protect them from the challenges of climate change.” The accelerator aims to use sustainable development to regenerate the region’s economy, supporting public and private investment opportunities that further environmental change and economic growth.

The project has relied so far on a long list of demonstration projects, donations, and other commitments. Chief among these commitments is a new $1 billion loan fund from the Inter-American Development Bank (IADB). The IADB, part of the World Bank Group, is a multilateral lender and the main development funder in Central and Latin America. Launched in 1959, it has 48 member countries—26 of which are borrowers—and has made more than $260 billion in loans to date. The IADB committed in 2015 to doubling its climate finance activities to 30 percent of its portfolio by 2020, or an average of $4 billion per year. Multilateral development banks as a whole financed more than $131 billion in climate action in aggregate between 2011 and 2015.

Taking the Lead: Grenada

While plans for the climate-smart zone are still just beginning to take shape for most members, Grenada has already initiated projects to reduce exposure from climate change—especially threats to water supplies. The island nation of just over 100,000 people off the coast of South America was hit hard by hurricanes in 2004 and 2005. The country has implemented a $400 million plan to protect low-lying infrastructure from rising sea levels, improve water storage and treatment systems, and increase efficiency.

The Grenada project was further encouraged by a grant from the Green Climate Fund, the multinational aid agency created in 2010 under United Nations climate agreements. The grant, totaling $49 million, was given to improve water systems.

While spurred by the devastation from hurricanes, the climate-smart zone is intended to be “a vision of hope and . . . a beacon for island nations all over the world,” according to the Climate-Smart Coalition’s leaders. “This vision will create thriving economies that are fueled by clean energy. It will create a resilient design and a way of life that works with, rather than against, nature.”

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