Strengthening Climate Risk Finance in the Caribbean for Rapid Assistance in Emergencies
In the context of climate change, Caribbean Small Island Developing States (SIDS) face increasing risks from climate-related hazards that particularly affect the livelihoods and food security of poor and vulnerable people.
Recent experience in the region shows that national social protection systems can play a crucial role in minimising the impact of disasters and securing development gains by providing targeted and rapid emergency assistance to affected people and preventing them from falling into further poverty.
One key area to make social protection systems more responsive and adaptive to such shocks is to link these systems to comprehensive climate risk financing strategies that enable rapid dispersal of funds immediately before or at the outset of an emergency.
Despite regional advancements through entities such as the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the Munich Climate Insurance Initiative (MCII), Caribbean SIDS have limited financial resources to invest in disaster preparedness and response given their small markets and high debt burdens. Consequently, governments are generating further debt when later forced to borrow to fund disaster recovery.
In view of these challenges, more investment in holistic climate risk finance is crucial to enhancing the shock responsiveness of social protection systems and reducing the impact of disasters on vulnerable people in the Caribbean.