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Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change
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Planet Under Pressure: Response of Small Island Development States to the Impacts of Global Environmental Change

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A presentation on 'Managing resource-dependence amidst opportunities and challenges: Defining a new Sustainability Narrative for Caribbean Coastal Economies', which was delivered by IPC-IG's Leisa …

A presentation on 'Managing resource-dependence amidst opportunities and challenges: Defining a new Sustainability Narrative for Caribbean Coastal Economies', which was delivered by IPC-IG's Leisa Perch at the 'Planet Under Pressure Conference' on 27 March 2012 in London, UK.

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  • 1. Managing resource-dependence amidstopportunities and challenges: Defining a newSustainability Narrative for Caribbean Coastal Economies Planet Under Pressure ConferenceSession: Response of Small Island Development States(SIDS) to the Impacts of Global Environmental Change 27 March 2012 Presenter: Leisa Perch, Policy Specialist/Team Leader - Rural and Sustainable Development International Policy Centre for Inclusive Growth (IPC-IG)
  • 2. INTRODUCTION TO IPC-IG IPC-IG is a partnership of the Government of Brazil and UNDP based in Brasilia, Brazil. Focus of our research is international; specifically focused on the South and on South-South Cooperation and Learning. Themes for IPC’s applied policy research: Macro-Economic Policy, Rural and Sustainable Development, Social Protection, Development Innovations. In Rural and Sustainable Development, the focus in on 3 key areas: • Inclusive Green Economy • Sustainable Rural Growth • Social and Political Innovations for Sustainable Development *See more on our webpage: www.ipc-undp.org
  • 3. OUR RESEARCH AND THIS PAPEROur Focus on SIDS and Sustainable Development, in the context ofthe Green Economy, is to better understand and define theinterdependencies between growth, sustainability and equity. Giventhe specific challenges SIDS face, to (i) better communicate currentand future dilemmas including political economy realities, (ii)highlight the need for SIDS to attend to social as well asenvironmental challenges and (iii) identify strategic areas whereSIDs can tackle all three pillars of SD at the same time. Ouremerging niche area is in the socio-environmental policy interface.This paper builds on research initiated last year for the CARICOMSecretariat in which a background paper was presented to ARegional on SD for Rio +20:http://pressroom.ipc-undp.org/2011/steps-for-a-new-green-growth-policy-in-* Some of the conceptual thinking is based on more recent work on Inclusive and Green Growth in the SADC region which includes 3 SIDS: http://cdkn.org/project/a-green-guide-to-align-political-and-social-contexts-f ; www.ipc-undp.org/pressroom/files/ipc671.pdf
  • 4. CONTEXT AND PURPOSE OF THERESEARCH The paper does not attempt to speak to all of the issues affecting SIDS. Instead:  it explores the context, shape and scope of resource-dependence as a driver of volatility in Caribbean SIDS.  Seeks to define how resource dependence in SIDS is the same and different from other contexts; and  positions the SIDS reality within the international policy discourse and the specific nature of how green growth and sustainability would need to be tackled.
  • 5. APPROACH Systems theory – the interconnectedness of the pieces and potential escalation of disequilibrium from one small element being out of sync Where SIDS fit within the framework of resource dependence Literature Review to understand the pattern of events and crisis over the last 5-10 years and the impact on economy, society and environment and the dynamics of those impacts What this means for the “how” of sustainability as well as the “what”
  • 6. DEFINING RESOURCE-DEPENDENCE  “When the development and economy of countries rich in resources becomes largely dependent on those resources, these countries often risk being affected by the so-called “resource curse” or “paradox of the plenty” (Karl, 1997)  The economy of such countries usually concentrates on the exploitation of the resources available and focuses all capital and labour investments there, often leading to a lack of diversification of the economy and high dependence on resource-extractive sectors, and resulting in financial problems and unemployment. Other references include Gelb and associates (1988), Sachs and Warner (1995), Ross (1999) and Auty (2001). Important pieces put forward by NGOs include Global Witness (1999), Christian Aid (2003) and Gary and Karl (2003). For a full listing, see: Bagattini (2011).
  • 7. 1. CHARACTERIZING RESOURCEDEPENDENCE IN CARIBBEANSIDS – GENERAL FEATURES 15 member of CARICOM - small, open and largely mono-cultural economies heavily dependent on expansive coastal and marine resources. Rich in natural resources Tourism – dominant sector for many of them, with a concentration of capital and labour there Outliers - Trinidad and Tobago, Belize, Guyana more dependent on mineral extraction; Jamaica (both) Limited diversification of the economy and options. External risk exposure significant (as compared to Mineral-dependent economies)
  • 8. RESOURCE DEPENDENCE –PUBLIC INVESTMENT INRESOURCE INTENSIVEGROWTH  Natural Capital  Government investment in travel and tourism high (Top 5 in the WTTF analysis for 2011).  Economic Capital  4 X more dependent than any other region in 2001  Human Capital  Highly invested in public health and in education
  • 9. 1. CHARACTERISINGCONTINUED – PATTERN OFVOLATILITY The Development Ecosystem of the Caribbean Coastal Economy:- economic growth and human development is inextricably tied to the quantity and quality of natural resources- Dependent on food and fossil imports – with high external volatility- sustainability of that growth and development is defined by the capacity to sustain resources, balance revenue and expenditure and smooth impact of economic and environmental shocks- Cyclical uncertainty: climate variability and change potentially put Caribbean SIDS on a continuous cycle of “build, repair and recover” where as much as 20% of GDP may go to coping with climate change
  • 10. 1. CHARACTERIZING RESOURCEDEPENDENCE – INTERSECTIONSBETWEEN ECONOMY, SOCIETY ANDENVIRONMENT
  • 11. 1. CHARACTERIZINGRESOURCE DEPENDENCE –WHERE CARIBBEAN SIDS FIT  SIMILAR:  Reliance on non-renewable or not easily regenerated The larger the proportion of government  Inequality revenue that is dependent on the  Opacity of extractive resource, the higher the volatility it can revenues experience (one element of the resource  Consumption intensity curse)  DIFFERENT Overall, of the key characteristics  Less of a trade-off between capital intensity and labor shared by resource-dependent/mineral- intensity dependent economies, Caribbean SIDS  Dependent on external experience 3 acutely: economic markets just not financial volatility, high dependence on a single ones export product with limited  Generally more democratic diversification of the economy and and inclusive significant environmental damage
  • 12. 2. MANAGEMENT CHALLENGES IN THE CONTEXT OF INTENSE VOLATILITY: RAPID TRANSMISSION OF RISK ACROSS SECTORSTable 1. Sectoral Impacts of Disasters in 2005 ( Source: Table 1. Patterns of working poverty across Caribbean countries in 2006Kambon, 2005) Working poverty - working poor as percentage of all workers: Female/male composition ofCountry Impa Impact Impact Impact Total Country ct on on on of social Socio- Impact national poverty line (in %, year working poor: national poverty line Prod Infrastr sector economi of 2006) (in %, year 2006) uctiv ucture social as % of c Disast e sectors total impact er as % Bahamas 2.44 1.15/1.29 in US$M socio- of GDP Secto in economi US$M Barbados 3.74 2.02/1.72 rs in US$M US$M c Dominica 21.5 7.32/14.18 impact Grenada 20.26 n.a. Guyana 29.42 n.a.Cayman Jamaica 16.8 7.95/8.85 St. Kitts andIslands 1117.7 488.4 1810.3 0.53 3416.4 138.0 Nevis 11.99 6.47/5.52Grenad Trinidad anda 539.2 262.4 1588 0.66 2389.6 212.0 Tobago 15.35 3.69/11.66 Source: Statistical Report on Working Poverty in the Caribbean,Jamaica 215.7 112.7 220.7 0.40 549.1 8.0 ILO Subregional Office for the Caribbean(2006) - http://www.ilocarib.org.tt/cef/background%20papers/Working%20Poor.pdfHaiti 83.3 33.9 125.8 0.52 243.0 4.5
  • 13. 2. MANAGEMENT CHALLENGES IN THE CONTEXT OF INTENSE VOLATILITY: RAPID TRANSMISSION OF RISK ACROSS SECTORSTable 1. Sectoral Impacts of Disasters in 2005 ( Source: Table 1. Patterns ofWorking poverty in the Caribbean Table 2. working poverty across Caribbean countries in 2006Kambon, 2005) Working poverty - working poor as percentage of all workers: Female/male composition ofCountry Impa Impact Impact Impact Total Country ct on on on of social Socio- Impact national poverty line (in %, year working poor: national poverty line Prod Infrastr sector economi of 2006) (in %, year 2006) uctiv ucture social as % of c Disast e sectors total impact er as % Bahamas 2.44 1.15/1.29 in US$M socio- of GDP Secto in economi US$M Barbados 3.74 2.02/1.72 rs in US$M US$M c Dominica 21.5 7.32/14.18 impact Grenada 20.26 n.a. Guyana 29.42 n.a.Cayman Jamaica 16.8 7.95/8.85 St. Kitts andIslands 1117.7 488.4 1810.3 0.53 3416.4 138.0 Nevis 11.99 6.47/5.52Grenad Trinidad anda 539.2 262.4 1588 0.66 2389.6 212.0 Tobago 15.35 3.69/11.66 Source: Statistical Report on Working Poverty in the Caribbean,Jamaica 215.7 112.7 220.7 0.40 549.1 8.0 ILO Subregional Office for the Caribbean(2006) - http://www.ilocarib.org.tt/cef/background%20papers/Working%20Poor.pdfHaiti 83.3 33.9 125.8 0.52 243.0 4.5
  • 14. CHALLENGES FORCARIBBEAN SIDS -AMPLIFIERS Figure 1. Selected data from Grenada Figure 2. Intersections between social and economic CWIQ, 2005. Highlighting the immediate impacts in Caribbean SIDS during the GEC. Sourced impacts of the hurricane on employment from UNDP 2010c based on that authors calculations for Caribbean PSIA studies.
  • 15. 3. MANAGEMENT CONT’D –CYCLICAL VOLATILITY AT THEMACRO LEVEL In the case of Antigua and Barbuda, success between 2004 and 2008 in reducing the public debt-to-GDP ratio from 120% to about 90%, was undermined by the global financial crisis. By the end of 2010, the national debt had again surpassed 100% and was even higher than it has been in 2004, reaching 130%. In 2010, services contributed more than 60% of the country’s GDP (CIA, 2011). In Barbados, a sharp decline in tourism in 2009 was immediately felt fiscally with the public debt to GDP ratio, increasing sharply.
  • 16. 2. MANAGEMENT CHALLENGES INTHE CONTEXT OF INTENSEVOLATILITY- MULTIPLIERS Source: Burke et. al, 2011: 24)
  • 17. 2. MANAGEMENT CHALLENGESFOR CARIBBEAN SIDS IN THECONTEXT OF INTENSEVOLATILITY (CONTD.) Structural factors of complexity – openness of ecosystem:  Many governments, from Barbados to the UW Virgin Islands, are now seeking to contain the impacts of growing numbers of Pacific Lionfish.  Investments in managing the Lionfish (native to the Pacific region) demonstrates other more subtle effects of both economic and environmental realities of managing global environmental change in a Caribbean context.  One of the key elements of the management strategy relies on a heavily fished species in the region – one of the few natural predators of the invasive Lionfish.
  • 18. 3. MANAGEMENT CHALLENGESCONT’D: THE POLICYENVIRONMENT  In the context of stringency, the Table 3. Environmental Policy Framework for Travel and Tourism in Caribbean SIDS numbers are also notable with Barbados the highest at 50 (most T&T Regulatory Framework stringent) and Trinidad at 102 (less   so). Country/Economy  On the effectiveness of government Policy Rules and Environmental Prioritization of Travel Regulations Sustainability and Tourism efforts to be sustainable, the ratings are more favourable with Barbados   Overall Rank Overall Rank   ranking 6th, Jamaica 40th, Guyana Barbados 75 30 3 72nd and Trinidad 101st of 139 countries, though particulate Guyana 99 34 86 matters seems to be a problems for Jamaica 11 116 4 all countries generally; and  In the area of ratification of environmental treaties, Trinidad Trinidad and Tobago 42 137 103 and Tobago ranks highest with 20/24; Jamaica -18/24; Barbados -17/24, Guyana – 17/24. Source: Blanke and Cheia (2011: 27, 28).
  • 19. 3. MANAGEMENT CHALLENGES FORCARIBBEAN SIDS IN THE CONTEXT OFINTENSE VOLATILITY (CONTD.) –INCLUSIVENESS OF GROWTH?  Labour Market Volatility Table 4: Change in HDI for selected CARICOM states when adjusted for inequality is a Key Transmission Point of Social Risk, Country HDI 2011 Inequality-Adjusted HDI Social and Economic Bahamas 0.771 0.655 Exclusion: Guyana 0.663 0.493  Knock on effects on Haiti 0.454 0.278 Crime and Insecurity Jamaica 0.727 0.610 (see UNODC/World Trinidad and Tobago 0.760 0.655 Bank 2007; new Source: Human Development Report, 2011 Caribbean HDR, 2012) • Furthermore, the average intensity of poverty, based on the Multidimensional Poverty Index is 39.5% in Guyana, with child mortality contributing significantly to overall poverty. Additionally, 2.1% of the population seem to be deprived in more than 60% of the indicators. • In spite of a high HDI ranking and GDP per capita, Trinidad and Tobago has a similar intensity of deprivation- observed at 35.1%. • In Haiti, the intensity is the highest in the region at neatly 60%.
  • 20. 3. MANAGEMENT CHALLENGESFOR CARIBBEAN SIDS IN THECONTEXT OF INTENSEVOLATILITY (CONTD.)
  • 21. RESOURCE-DEPENDENT GREENECONOMY  – TACKLING SOCIALEQUITY AND ECONOMICGOVERNANCE  Social inequity is a source of pressure for and on resource intensive growth. Muting the effects requires: - Changing the cycle - environmental quality has a direct impact on the employment generation capacity of resource-dependent sectors - Enhancing pro-poor productivity - poverty has implications for the environment (coping mechanisms rely on free/accessible public goods) - Accelerating productive inclusion – Prioritizing youth employment, access to finance and innovation; reduce underemployment and enhance women’s access to decent work
  • 22. RESOURCE-DEPENDENT GREENECONOMY  – TACKLING SOCIALEQUITY AND ECONOMICGOVERNANCE? (CONTD.)  Inclusive and green finance: - Targeting decent green pro-poor employment - Incentivizing private sector investment in sustainability (e.g. Reserve Bank of Fiji’s Agriculture and Renewable Energy Loans Ratio for commercial bank operations – 2% of deposits and liabilities must go to loans to renewable sector) - Anticipating Sustainability Opportunities: bolster innovation and reduce the inconsistency of innovation (stagnation of solar?)……Fiji and Samoa started in the 70s and 80s and now have a share of renewables at 54 and 43% respectively     
  • 23. RESOURCE-DEPENDENT GREENECONOMY  – FINANCE ANDPOLICY  Finance Opportunities:  Policy Reform  New GEF-funded project Opportunities (Seychelles): coming on board focused  A recent report noted its fast on sustainable marine growing economy and a ecosystem management world-class environmental for the Eastern Caribbean record (Spencer, 2012:1), highlighting that policy can to the tune of USD 8.7 deliver across economy and million environment in SIDS  Barbados having a USD  The three pillar approach 30 million dollar loan with employed by the government, the IBD on coastal defined in a “Strategy 2017, conservation part of a comprises tourism, fisheries larger package exceeding and financial services, taking in mind the risks, volatilities USD 170 million and and vulnerabilities of all another USD 7.1 million three sectors. in technical grants.
  • 24. 4. SUSTAINABLE GROWTH IN ARESOURCE-DEPENDENT GREENECONOMY  – ROLES FOR SOCIALEQUITY AND ECONOMICGOVERNANCE? (CONTD.)o ‘Smart’ Tourism i.e. inclusive and green – specific strategies:o Green and ethical tourism with less macro debt and more growth – (Seychelles Model)o Maximizing sizeable WTP opportunities in the Caribbean (according to WRI, 2011) – fishing, whaling, coral reefs, heritage etc.o More local ownership: engaging private citizens in tourism investment – equity stakes (Duncan, 2011)
  • 25. 4. SUSTAINABLE GROWTH IN ARESOURCE-DEPENDENT GREENECONOMY  – ROLES FOR SOCIALEQUITY AND ECONOMICGOVERNANCE? (CONTD.) ‘Smart’ Development :- Strengthened and effective regulatory frameworks – prioritize environmental sustainability concerns in regulatory frameworks (Maldives’s Low Carbon Strategy and Commitment)- Cooperative approach to coastal management – with clear responsibilities and accountabilities (building on Barbados’s CZM approach)- a sustainable infrastructure model – the earthquake in Haiti is a clear example of the nexus between poverty, environment and the macro-economy ( Example: Government of Tonga’s DRR+CC Strategy)
  • 26. 5. NEW SUSTAINABILITYNARRATIVE Beyond Vulnerability: coping with resource- dependence and volatility Understanding, anticipating, mitigating dynamics of nature, power and poverty 3 strand response: - increasing natural resilience – given increasing climate variability and threats - greening of sectors rather than the “de-browning” of environmental externalities - tying “green transformation” to areas which can also deliver more stability, more labour market opportunities and increasing wage stability – social resilience
  • 27. 5. NEW NARRATIVE CONT’D -ANTICIPATORY GOVERNANCEFOR SUSTAINING CHANGE Commoner (1971) noted that “the amount of stress which an ecosystem can absorb before it is driven to collapse is also a result of its various interconnections and their relative speeds of response. The more complex the ecosystem, the more successfully it can resist a stress …Most ecosystems are so complex that the cycles are not simple circular paths, but are crisscrossed with branches to form a network….”.  For Caribbean SIDS - it is complicated but not necessarily very complex – speed to impact is fast and the speed of response often slow; crisis often hits at the heart of the system  New economic governance framework must be anticipatory – well informed, able to cope with uncertainty, prepared, flexible and
  • 28. 5. NEW SUSTAINABILITYNARRATIVE - WHERE AND HOWCOULD THE PIECES FIT Development Drivers: Resource Wealth, Resource Quality, Open Economies, Climate Vulnerability and Change, Economic Volatility, Social Inequity Inputs: Ecological Diversity, Strategic Public Policy, Partnerships, Finance and Investment Enablers: Adaptive Policymaking, Anticipatory Governance, Co-benefits Strategies, Innovation, Technology Conditions for Sustainability: Decent Work, Systems Resilience, Adaptive Capacity, Economic & Environmental Governance
  • 29. THANK YOU FOR YOUR ATTENTION! LEISA PERCH

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