The Caribbean Development Bank (CDB) is calling on developed countries to re-allocate 2% of their latest Special Drawing Rights (SDR) to facilitate investment in climate adaptation measures in small island developing states (SIDS).
CDB President Dr Gene Leon said, “With only 25% of flows so far going to adaptation and with priorities in national developed contributions overwhelmingly emphasising adaptation needs, small island developing states are falling behind, yet have no choice but to adapt to climate change now. Given current debt sustainability challenges in the Caribbean, it is crucial that we identify and pursue innovative approaches to help scale up public sector investment.”
The 2% apportionment, Dr Leon explained, can be combined with SDRs already allocated to SIDS to enable investment in adaptation at scale, despite the significant impact that the COVID-19 pandemic has had on public debt levels.
The CDB head made the call today while addressing the Ministerial Dialogue on Adaptation Action at the 26th United Nations Climate Change Conference (COP26) in Glasgow, United Kingdom.
Dr Leon also advocated for the private sector to play a key role in scaling up climate finance through the unlocking of low-cost financing for investments in resilient infrastructure, water, transportation, and energy systems, which are vital to social and economic development and well-being in SIDS.
“We see the need for instruments to facilitate the de-risking of investment opportunities for the private sector, which has ample capital,” the CDB President said. “We need to crowd in the private sector to focus on shared national and regional objectives. We must emphasise the use of partial loan guarantees, first loss guarantees and other innovative instruments to de-risk private sector investment opportunities.”