Vulnerabilities and challenges
The OECS Business sector is highly vulnerable to the effects of climate change. Given current global warming trends, the effects including seal level rise and extreme weather events are expected to worsen. Additionally, the business sector in the Region is challenged by small markets, small range of products, high administration costs, high debt, limited access to finance, poor innovation and high energy costs. Furthermore, the majority of critical services and
businesses, about 70%, are located near the coasts. These vulnerabilities and challenges must therefore be addressed in order to build resilience in the business sector.
How is the climate change impacting?
As the climate change phenomenon continues to threaten the Region’s SIDS, in a similar manner it increases risks for the business sector. These risks include: depletion of natural resources, damage to critical infrastructure and utilities, interrupted transport routes, heightened price and market volatility and unpredictable impacts on the workforce and consumers (BSR, 2015). In recent times, the OECS Region has experienced the impacts of extreme weather events such as Hurricanes Ivan and Tomas that severely impacted the tourism and agricultural sectors and almost wiped out major development gains and gross domestic products (GDP) of Grenada and Saint Lucia respectively. Moreover, the region is experiencing frequent and prolonged droughts that are classified as socio-economic; thereby negatively affecting business productivity.
What can be done?
The Intergovernmental Panel on Climate Change (IPCC) defines resilience as “The capacity of social, economic and environmental systems to cope with a hazardous event or trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity and structure, while also maintaining the capacity for adaptation, learning and transformation.” Building such resilience in the OECS business sector will be a challenge. However, the sector must focus on the opportunities, engage in adaptation activities, utilise its capacity to transform towards a low carbon direction and innovate. The Sector should, among other things, seek to:
- Develop a risk management strategy that takes into consideration exposures,
vulnerabilities and capacities that will lead to the mainstreaming of climate change.
- Address the enabling environment to improve incidences of innovation.
- Make investments in environmentally sound infrastructure and technologies such as
renewable energy to increase energy efficiency and make the sector more energy secure
through the use of local energy sources such as wind, solar and geothermal.
- Make investments in climate change adaptation and undertake corporate social
responsibility activities that build resilience to climate change at the community level.
- Support climate change research activities and establish partnerships.
- Establish financing mechanisms such as trust funds to generate sustainable financing for
various sustainable development activities.
Towards a resilient OECS business sector
Although climate change threatens the OECS business sector, all is not lost. The sector can tackle climate change by focusing on opportunities, assessing risks, improving the enabling environment, investing in renewable energy technologies and climate change adaptation initiatives, supporting climate change research and establishing sustainable financing mechanisms. These actions can also lead to the formation of multi-sectoral partnerships between the business sector,
government and non-governmental organisations (NGOs) towards building resilience in the business sector and the Region as a whole.