Transcript Developing a risk management ethic in decision making

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Annual Meeting of
the Board of Governors
of the CDB
Unlocking Climate Finance;
Opportunities and
Constraints
Trinidad & Tobago June 25th 2011
U Trotz - Caribbean Community Climate
Change Centre
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LILLIENDALL DECLARATION
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WE Declare:
1. That all Parties to the UNFCCC should work with
an increased sense of urgency and purpose towards
arriving at an ambitious and comprehensive
agreement at the COP 15 in Copenhagen in 2009
which provides for: long-term stabilisation of
atmospheric greenhouse gas concentrations at levels
which will ensure that global average surface
temperature increases will be limited to well below 1.5°
C of pre-industrial levels; that global greenhouse gas
emissions should peak by 2015; global Co2 reductions
of at least 45 percent by 2020 and reducing
greenhouse gas emissions by more than 95 per cent
of 1990 CO2 levels by 2050;
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LILLIENDALL DECLARATION
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2. Adaptation and capacity building must be
prioritised and a formal and well financed framework
established within and outside of the Convention,
including the multi-window insurance facility, to
address the immediate and urgent, as well as long
term, adaptation needs of vulnerable countries,
particularly the SIDS and the LDCs;
3. The need for financial support to SIDS to enhance
their capacities to respond to the challenges brought
on by climate change and to access the technologies
that will be required to undertake needed mitigation
actions and to adapt to the adverse impacts of climate
change;
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LILLIENDALL DECLARATION
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6. Our recognition of the value and potential of
standing forest, including pristine rainforest, and
our affirmation of its potential contribution to
Reduced Emissions from Deforestation and
Degradation (REDD). Forest conservation or
avoided deforestation and sustainable
management of forests are important mitigation
tools against climate change in a post 2012
Agreement. We also support the approach to
harmonizing climate change mitigation and
economic development as proposed by Guyana
in its Low Carbon Development Strategy;
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LILLIENDALL DECLARATION
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7. Strong determination to overcome
technical, economic and policy barriers to
facilitate the development, diffusion and
deployment of appropriate and affordable lowand zero-emission technologies and renewable
energy services; We also recognise the need
for energy efficiency and conservation and the
need for increased technical and financial
support for the development of renewable
energy in the Caribbean;
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REGIONAL STRATEGIC
FRAMEWORK
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This framework is comprised of five key
strategies and associated goals designed to
significantly increase the resilience of the
CARICOM economies:
1. Mainstreaming climate change adaptation
strategies into the sustainable development
agendas of CARICOM states.
2. Promote the implementation of specific
adaptation measures to address key
vulnerabilities in the region.
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REGIONAL STRATEGIC
FRAMEWORK
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3. Promoting actions to reduce greenhouse gas
emissions through energy efficiency, conservation,
and switching to renewable energy sources.
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4. Encouraging action to reduce the vulnerability of
natural and human systems in CARICOM countries to
the impacts of a changing climate.
5. Promoting action to derive social, economic, and
environmental benefits through the prudent
management of standing forests in CARICOM
countries
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IMPLEMENTATION PLAN
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Centre mandated to coordinate regional
process to develop an IP for the Regional
Strategy.
Process has involved series of national
consultations with wide range of stakeholders
aimed at determining actions to be reflected in
the IP
The implementation Plan:
Covers the period 2011 to 2021.
Identifies priority activities under each strategic
element and goal area of the Regional
Framework.
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IMPLEMENTATION PLAN
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Identifies capital and revenue costs for each of
the actions in consultation with the
implementing organisations. Indicative costs
have been provided where actions require
further scoping and design.
Allocates responsibilities and outlines functional
co-operation between regional and national
agencies.
Provides the basis for investment
programming for national budgets and in
discussions on funding priorities with the
international donor community.
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IMPLEMENTATION PLAN
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Considers governance and institutional
capacity.
Identifies the essential actions required to derisk the Caribbean and open up the private
sector investment streams that are a key
element of the Copenhagen Accord.
Proposes a monitoring and evaluation process
to provide transparency, donor confidence, and
an evidence base on which to refine and
improve the Regional Framework and the
Implementation Plan.
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EMERGING THEMES IN IP
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Building resilience requires transformational
change
Building a low carbon climate resilient or a
green economy is an integral element of the
wider sustainable development agenda
Caribbean governments and organisations
have to step up to the plate.
Acting regionally to deliver nationally.
Effective partnerships with donors and
international financial institutions (IFIs) are
critical.
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EMERGING THEMES IN IP
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Governments must address the private sector risk reward
balance in order to access the full range of funding
opportunities.
Low-carbon energy generation has to become part of the
‘DNA’ of the Caribbean.
Uncertainty is not a reason for inaction.
Risk management processes are essential to effective
decision-making
Data and information is a public good
We must not lose the information, knowledge and expertise
we already have.
The challenges ahead may be far greater than we are
currently planning for.
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SUPPORTING IMPLEMENTATION
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Implementation Plan calls for
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Developing a risk management ethic in decision
making
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Creating a favourable investment environment in
the Caribbean.
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Accessing finance to support:
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Low Carbon development pathway for the region –
energy efficiency, renewable energy, establishing Carbon
market.
Climate resilient development - Adaptation
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Developing a risk management
ethic in decision making
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The Regional Framework is founded upon the
principle of using risk management processes
and tools to aid decision-making
Decision-making based on subjective value
judgements without using the information and
the expert advice and guidance that is
available, given the challenges and
uncertainties we face, will compromise
resilience building
There is a CARICOM approach to using climate
risk management developed by the CCCCC.
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Developing a risk management
ethic in decision making
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The CARICOM Climate Risk Management
Framework should be revised to take into
account the latest developments in climate risk
management techniques.
An on-line version should be developed with full
guidance and links to other tools and
techniques.
The revised risk management framework must
be supported by a comprehensive training
programme for decision-makers across all
stakeholders.
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Developing a risk management
ethic in decision making
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CDB to endorse the development of a revised
climate risk management framework, provide
funding and promote its use in all decision
making.
A standard ‘stress-test’ process and guidance
based on the revised Caribbean Risk
Management Framework should be developed
by the CCCCC. All organisations operating
at regional and national levels should
‘stress-test’ decisions against the potential
impacts of a changing climate
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Financial and Technical
Assistance
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The CCCCC working with the CDB should
develop a technical support facility to advise
regional organisations and national
governments on the funding opportunities,
matching projects with funds and preparing
funding applications.
Explore the potential benefits of the CDB
acting as a Regional Implementing Entity for
the Adaptation Fund.
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Financial and Technical
Assistance
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CDB working with the CARICOM member
states should develop a region-wide position on
the most effective and equitable funding
mechanisms and engage with donors and IFIs
on the basis of country-led needs assessments
and processes.
The Caribbean Development Bank can play
an instrumental role working with the
donors and IFIs to develop a regional
funding mechanism.
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Facilitating Private Sector
Investment
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CDB to work with national government
ministries with responsibilities for finance and
economic development to:
Assess and review the risk profiles for each
CARICOM member state in partnership with
the private sector (operating at national,
regional and international levels)
Identify and implement a 5 year
transformational programme to deliver the
actions needed to improve the risk balance
in each country and attract private sector
investment.
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Adaptation Projects
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CDB to work with CCCCC to identify a series
of impact risk assessments focussing on
those sectors identified in the Regional
Framework. Examples would include critical
infrastructure assets:
Ports and harbours, Airports, Drinking water
and waste water treatment assets, Energy
Agriculture, Tourism, Health
CDB to provide funding to commission impact
risk assessments, identify risk management
options and develop guidance for new projects.
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Internalising climate change into
bank lending decisions
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CDB to
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follow IFC approach and recognise climate
change as a cross-cutting theme to be
integrated within internal lending risk
processes.
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require that project sponsors submit a risk
assessment of the impacts of climate change on a
proposed project during the project’s life. Undertake
an assessment of the CDB’s current investment
portfolio to identify potential impacts.
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work with commercial banks operating in the
Caribbean to adopt similar best practice approach
to integration of climate change into decisionU Trotz
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