Caribbean countries are highly vulnerable to climate change due to their geographical location, highly populated low-coastal zones and gaps in infrastructure, making them susceptible to climate-related extreme weather events that generate significant socio-economic impacts. Planning and implementing adaptation policies to enhance preparedness and resilience are crucial for safeguarding livelihoods and well-being. This chapter is structured into four sections. First, it presents key environmental challenges, including exposure to extreme weather events and their socio-economic and spatial impacts. Second, it highlights the importance of adopting comprehensive, long-term adaptation policies and specific instruments for resilience. Third, it advocates for transitioning from vulnerability analysis to identifying strategic opportunities in economic sectors with potential for promoting sustainable and resilient development in the Caribbean. Finally, the chapter presents key policy messages.
Caribbean Development Dynamics 2025
Abstract
The Caribbean stands out as one of the most at-risk regions for climate-related issues. Its geographical location, topographical characteristics, densely populated low-coastal zones, and infrastructure gaps contribute to its high susceptibility to extreme weather events and natural disasters. Storms and flooding, including tropical cyclones, are a major hazard for the region which has been hit by over 200 such events in the past two decades. Caribbean countries have experienced the highest temperature increases in Latin America and the Caribbean (LAC) in the last three decades, exacerbating risks from rising sea levels, considering that more than half of Caribbeans live within 1.5 m of the coastline and one-third live in low elevation zones. Natural disasters associated with climate change have high socioeconomic and spatial impacts in the region and the most vulnerable populations are disproportionally affected.
These risks underscore the urgent need for adaptation policies to address climate vulnerabilities and enhance climate resilience in the Caribbean. Three key dimensions to promote climate resilient economies are: investing in resilient infrastructure; implementing early warning systems (EWS) and aligning national adaptation commitments with international targets while examining trade-offs with sectoral and non-climate policies.
Despite the significant challenges and risks, this chapter highlights the need to advance from a vulnerability-focused perspective to identifying strategic areas of opportunity that a green and just transition can bring to the Caribbean while advancing climate-resilience. Areas such as energy transition, the blue economy, the circular economy, sustainable tourism, sustainable transport, nature-based solutions and digital transformation can promote the transformation of the region’s production matrix, making it more sustainable while creating quality jobs, enhancing well-being and addressing climate-related challenges.
This chapter is divided into four main sections. First, it outlines the key environmental challenges faced by Caribbean countries, including exposure to climate-related extreme weather events and their socio-economic and spatial impacts. Second, it emphasises the importance of adopting comprehensive, long-term adaptation policies to increase climate resilience. Third it advocates for a shift from vulnerability analysis to identifying strategic areas of opportunity to promote sustainable and resilient development in the Caribbean. Finally, the chapter concludes with key policy messages.
Caribbean countries are highly vulnerable to extreme climate events and the effects of climate change
Countries in the Caribbean show higher vulnerability levels to climate change than Latin American (+2) and OECD countries (+11), on average, as illustrated by the Notre Dame Adaptation Initiative (ND-GAIN) vulnerability index (Figure 3.1) They tend to be more exposed (due to their geographical location), more sensitive (given the magnitude of population and sectors affected) and have less adaptive capacity (institutional and infrastructural) to respond to climate change and climate hazards.
Note: The Vulnerability Index expresses the propensity or predisposition of human societies to be negatively affected by climate hazards by measuring countries’ exposure, sensitivity, and adaptive capacity to climate events and climate change. Scores range from 0 to 1, the lower the score, the lower the vulnerability, and the higher the score, the higher the vulnerability. Exposure: the degree to which a system is exposed to significant climate change, independent of socioeconomic context. Indicators are projected impacts for future decades, remaining constant over time in ND-GAIN. Sensitivity: The extent of a country's dependence on sectors negatively affected by climate hazards or the proportion of the population particularly vulnerable to such hazards. This can vary over time. Adaptive capacity: The availability of social resources for sector-specific adaptation, including both sustainable solutions and the capacity to implement new adaptations. This varies over time in all countries. The Latin America country average includes 17 countries: Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The Caribbean average includes 14 countries: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago. The OECD group includes all 38 OECD member states.
Source: Authors’ elaboration based on data from Notre Dame Adaptation Initiative (2021[1]).
The Caribbean is increasingly exposed to different extreme weather events linked to climate change effects, including extreme heat, droughts, storms and hurricanes, sea level rise, and excessive flooding (CSGM/UWI, 2020[2]). The region is also particularly vulnerable to biodiversity loss, as many of the main economic drivers such as tourism, agriculture and mineral extraction, are linked to natural resources and the quality of ecosystems (OECD, 2023[3]). From 1980 to 2020, Caribbean countries suffered 322 climate-related extreme weather events triggered by natural hazards. Haiti (100), Dominican Republic (63) and Jamaica (31) experienced 60.2% of total climate hazard events in the region (Figure 3.2). The number of such events in the Caribbean in the period 2001-20 was 85% higher than in 1980-2000 (EM-DAT, 2024[4]).
Note: Disasters are considered here as situations or events that overwhelm local capacity, necessitating a request to the national or international level for external assistance, or an unforeseen and often sudden event that causes great damage, destruction and human suffering. The graph considers only climate-related events like droughts, floods, storms, extreme temperatures, and wildfires. Geophysical events (earthquakes and volcanoes), technological events (industrial accidents) and biological events (from epidemics, insects or animals) are recorded in EM-DAT but excluded from the scores as they are not directly associated with climate change.
Source: Authors’ elaboration based on data from EM-DAT (2024[4]).
Caribbean countries experienced the highest temperature increases in the last three decades in Latin America and the Caribbean
The last 30 years have been the warmest on record in nearly all Caribbean countries and average temperatures are expected to rise further by 2030 (Figure 3.3). The average temperature recorded for the period 2000 to 2023 is more than 1°C higher than the average for 1910-1930. Temperatures were warmer than average especially in The Bahamas, Belize and Jamaica
The year 2020 was one of the warmest in Latin America and the Caribbean (LAC)’s history, one of the three warmest in the Caribbean and Central America, and the second‑warmest in South America. The Caribbean recorded the largest temperature increases in LAC, confirming its greater vulnerability to climate change (WMO, 2021[5]). Temperature increases can augment the frequency of extreme heatwaves, extreme rainfall events and droughts; reduce ice sheets, sea ice and glaciers; accelerate sea level rise; and ocean heating (WMO, 2024[6]). According to the IPCC, at a 1.5°C global warming above pre-industrial (1861–1900) levels scenario, the Caribbean region will experience a 0.5°C–1.5°C mean surface temperature increase compared to a 1971-2000 baseline. At 2.0°C and 2.5°C scenarios, the warming ranges in the Caribbean increase to 1.08–2.58°C and 1.58–3.08°C, respectively (Taylor et al., 2018[7]). Impact studies increasingly highlight the adverse effects of surpassing global warming pre-industrial levels will have on key socioeconomic sectors critical to the Caribbean’s quality of life, including water availability, agriculture and food production, health, natural resources and biodiversity, and tourism (Rhiney, 2015[8]; Taylor, M. A., 2015[9]; Taylor, Jones and Stephenson, 2016[10]).
Note: This chart illustrates annual temperature anomalies relative to the 1910-2000 baseline average for both ocean and land surfaces in the Caribbean Islands. The y-axis displays the average temperature anomaly in degrees Celsius, calculated from January to December of each year presented in the x-axis. The average was computed based on monthly data for the islands and regions of the Caribbean Sea located south of Florida, excluding most continental shelf regions from the southern coast of Mexico to Venezuela.
Source: Authors’ elaboration based on Climate at a Glance (NOAA, 2024).
Rising sea levels are a major threat for the region
More than half of Caribbeans live within 1.5 km of the coastline and one-third live in low-elevation zones, increasing their exposure to the effects of climate change. Many Caribbean coastal areas comprise reclaimed land that houses critical infrastructure such as air and seaports, hotels, energy generation, transmission and distribution networks and road networks. Rising sea levels mean a higher risk of damage to this infrastructure, freshwater resources, local economies and livelihoods and coastal communities.
Given the region’s proximity to the equator, rising sea levels generated by higher temperatures will continue to erode coasts and damage ecosystems. This, in turn, can lead to land loss, household damage, relocations, and business closures (Bleeker et al., 2021[11]). Sea levels in the Caribbean could rise by approximately 2.5 ± 0.4 mm/year, which, for example, could affect 49-60% of Belize’s tourist resort properties (Walker, 2022[12]). Moreover, the Caribbean also has the highest population density in the Americas, three times bigger than Latin America, making relocation even more challenging, especially given the limited land space in some of the smaller islands.
Natural disasters have high economic impacts on the region
In the last four decades, climate hazards in the Caribbean affected over 24 million people. The amount of people affected by natural disasters in the Caribbean represents more than the region’s average population between 1980 and 2020 (Figure 3.4. Panel A) and had an economic cost of over USD 22 billion in damages in that period (EM-DAT, 2024[4]). This vulnerability is heightened by the region's limited capacity to adapt to and recover from such impacts, necessitating robust climate resilience and disaster risk management strategies (Roy, 2023[13]).
Over the last four decades, annual climate-related damages have accounted for an average of 2.13% of GDP across Caribbean countries (Figure 3.4, Panel B). For example, the economic cost of Hurricane Ivan in 2004 in Grenada represented 148% of the country’s GDP (EM-DAT, 2024[4]) and damaged 90% of its physical infrastructure and housing stock, respectively (IMF, 2005[14]). Most economic damages from climate hazards in the Caribbean between 1980 and 2020 were generated by storms (94%), including tropical cyclones, followed by floods (5%) and droughts (1%).
Note: Panel A illustrates the relative impact of natural disasters on different countries by showing the ratio between affected people and average population size in the Caribbean from 1980 to 2020. The number of affected people is determined by multiplying the number of affected families or damaged houses by the average family size for the area (×5 for developing countries, ×3 for industrialised countries, per UNDP classification); if a range is provided, the average of the range is used, and estimates like thousands affected are taken at face value despite likely underestimation. Panel B shows the average annual total damage caused by natural disasters as a percentage of GDP on average from 1980 to 2020. The Caribbean average includes 15 countries: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago. The Latin America Average comprises 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela.
Source: Authors’ elaboration based on data from EM-DAT (2024[4]); United Nations (2022[15]); World Bank (2024[16]).
Barbados experienced a relatively low incidence of climate events with the lowest financial impact and the fewest people affected in the last four decades. This was supported by a comprehensive disaster management strategy, which relies on improved regulations, funding mobilisation, resilient infrastructure and community resilience initiatives through EWS, and research-backed planning (Parliament of Barbados, 2022[17]).
Vulnerable populations are the most affected by climate change consequences
The effects of global warming are expected to intensify in the coming years. In so doing, they will continue affecting disproportionately the most vulnerable countries and their most exposed socio‑economic groups. Climate change impacts could drive an additional 5.8 million people into extreme poverty in LAC by 2030 (Jafino et al., 2020[18]). Disproportionate impacts of climate change on most vulnerable populations in the Caribbean will reinforce forced migration trends and spatial and gender inequalities, among other relevant dimensions. A total of 17 million citizens in LAC are projected to migrate by 2050 due to climate change (World Bank, 2021[19]). Between 2012 and 2022, environmental disasters in the Caribbean caused 5.3 million new internal displacements (IOM, 2023[20]). Moreover, during the 2017 Atlantic hurricane season alone, 3 million Caribbean people were displaced in a single month, with the most vulnerable populations disproportionately affected (Bleeker et al., 2021[11]). Relocation programmes co‑ordinated at a regional level would help anticipate and contain forced migration due to climate change and reduce unnecessary exposure to risk (Chapter 6).
Socio-economic inequalities in the Caribbean are concentrated in urban areas disconnected from each other. Wealth accumulates in a few privileged locations, distinct from the rest of the urban landscape. High urbanisation rates, unregulated urban expansion, and socio-economic residential segregation have forced vulnerable groups into high-risk zones, such as floodplains and landslide-prone slopes, without adequate infrastructure. This situates them at heightened risk to climate change impacts and other phenomena, such as heatwaves, amplifying health risks and vulnerability to extreme weather events based on their socio-economic status (OECD et al., 2021[21]).
Lower-income households in the Caribbean who tend to live in areas highly vulnerable to the effects of climate change, might not receive enough financial help to rebuild their houses. Consequently, they have a greater chance of suffering longer periods of displacement after a natural disaster (Bleeker et al., 2021[11]). These households often face significant financial burdens due to loss of income, as the widespread damage in the region frequently burdens the local economy during the recovery process.
Climate change also exacerbates the socio-economic divide between rural and urban areas in the Caribbean by increasing the effects of droughts on agricultural areas and driving migration from rural to urban regions. This movement will further strain urban areas, highlighting the need for urban renewal policies that foster the inclusion of marginalised populations and social cohesion. This is particularly significant in regions with large indigenous populations, such as Belize, Guyana and Suriname, where rural-to-urban migration could significantly alter the socio-economic landscape. In Guyana, for example, indigenous people remain the most economically disadvantaged and vulnerable ethnic group comprising around 10% of the population and residing mostly in rural areas. Addressing these challenges requires comprehensive strategies that account for both urban and rural socio-economic dynamics. To effectively integrate climate change mitigation and adaptation into urban planning, these efforts must include urban development and land use reforms, improved data collection and climate risk assessments, community involvement in sustainable infrastructure planning, and securing adequate financing.
Women are disproportionately affected by natural disasters. Women and children are 14 times more likely to die than men during a disaster globally. Moreover, unequal access to resources and decision-making power between women and men in pre- and post-disaster contexts affects their capacity to prepare for and respond to disasters (OECD, 2023[22]). There is a higher concentration of impoverished people living in households led by women, and, in the Caribbean, women mostly work in sectors highly vulnerable to such events (Bleeker et al., 2021[11]). In The Bahamas, for instance, at least one-third of women are employed in the tourism sector, which typically collapses or experiences temporary shutdowns following natural disasters (Bleeker et al., 2021[11]). Furthermore, women are often the last to evacuate during extreme weather events due to caregiving responsibilities for children and the elderly. They also tend to have less training in preparedness and response to such events. Additionally, women may face barriers to accessing and acting on early warnings, often due to lower levels of education, illiteracy, or insufficient technical training (OECD, 2023[3]). Caribbean countries are working on making their climate-related policies more gender-responsive. For example, Grenada is including women in the discussions at the stages of design, implementation and evaluation of climate mitigation and adaptation strategies, while Jamaica includes women in identifying high-risk areas and critical infrastructure that could be affected by climate disasters (OECD, 2023[3]).
High vulnerability comes in combination with Caribbean countries’ minimal contribution to global greenhouse gas emissions
The Caribbean contribution to global greenhouse gas (GHG) emissions from 1990-2015 is minimal compared to the consequences they have on the region. The Caribbean has contributed only 0.23% to total GHG global emissions in 2021, a figure that is closely aligned with the region’s share of global GDP, approximately 0.22%, in that same year (World Bank, 2024[16]). However, total emissions have increased from 73 Mt Co2e in 1990 to 109 Mt Co2e in 2020, which reflects a 49.3% increase in emissions for the Caribbean region (Figure 3.5) (Climate Watch, 2024[23]).
The occurrence of natural disasters will continue to increase as a consequence of climate change. Investment in climate adaptation strategies is needed to allow the most vulnerable countries to prepare and create resilient strategies and resources. In doing so, they can avoid human suffering and economic losses, and build a resilient path towards development. To advance a sustainable and just green transition in line with the Paris Agreement commitments, Caribbean countries will need to address the transitional risks associated with meeting their emissions targets under a common but differentiated responsibility. Transition risk refers to the climate risk resulting from mitigation policies as economies move towards a greener, less polluting society, leading to changes in the energy system and throughout the economy.1 For example, firms involved in fossil fuels and those with a high emission intensity could face large shifts in asset values or higher costs of doing business (EIB, 2021[24]).
Note: Total GHG emissions excluding land-use change and forestry (LUCF). The OECD total represents the sum of GHG emissions for all member countries. The Caribbean total includes 15 countries: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago. The Central America total consists of eight countries: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Mexico. The South America total comprises 12 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru Suriname, Uruguay and Venezuela. The Latin America total comprises 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The OECD total includes all 38 member states. OECD is represented on the right axis (RHS).
Source: Authors’ elaboration based on (Climate Watch, 2024[23]).
Vulnerability to climate change is multifaceted, encompassing social, spatial and institutional factors. These factors include high poverty and inequality, high population density in risk-prone areas, inadequate infrastructure, and risk of natural disasters. Thus, adopting climate adaptation policies is essential to address the underlying vulnerabilities in all dimensions and increase climate resilience and preparedness. Comprehensive strategies combine immediate disaster preparedness with long-term vulnerability reduction. Such strategies are needed to enable Caribbean nations to better protect their populations and economies from the adverse effects of climate change and natural disasters (World Bank, 2023[25]).
Caribbean countries vary significantly in their vulnerability to climate change and readiness to address it. Stronger governance, economic stability and more developed social protection systems can enhance the adaptive capacity of countries to natural disasters. The analysis of vulnerability and readiness indexes at the regional level shows that Caribbean countries, on average, are more vulnerable than Latin American countries. However, Caribbean countries have been more active in designing policies to increase readiness to address the effects of climate change. OECD countries, on average, have lower levels of vulnerability and significantly higher levels of preparedness than Caribbean and Latin American countries, respectively. This positions them in a relatively more secure situation with fewer challenges.
Building climate resilience entails different types of climate risk management interventions that comprise climate risk and vulnerability assessments and monitoring actions, the development of EWS, effective governance to manage climate risks accompanied by human and institutional capacity-building; nature-based solutions (NbS) used to reduce risks; climate-proofing of infrastructure and services; insurance and social protection instruments to reduce investment and social risks; increased access and quality of public and private finance to invest in resilience (Global Climate Action and the Marrakech Partnership, 2022). Promoting international co-operation among Caribbean countries to exchange best practices and collaboration is also key for a more resilient Caribbean (Chapter 6). The following section highlights three areas of action that are particularly relevant to advance climate resiliency in the Caribbean: i) resilient infrastructure; ii) EWS and iii) climate adaptation policy instruments. Resilient infrastructure is crucial for economic stability, as it significantly reduces GDP losses by minimising the destruction of capital during natural disasters. By prioritising climate-resilient infrastructure, countries can enhance the reliability of service provision and extend the lifespan of assets. Saint Lucia, Dominica, and Barbados offer interesting examples of resilient infrastructure experiences (Box 3.1).
Integrating climate change adaptation with disaster risk reduction measures – such as early warning systems (EWS) and civil protection systems – can enhance countries’ capacity to mitigate the economic, environmental, and social impacts of extreme climate events. EWS are a key element of disaster risk reduction, and Caribbean countries were frontrunners in developing their EWS.
National Adaptation Plans (NAPs) and other policy instruments, including Nationally Determined Contributions (NDCs) and Long-Term Strategies (LTS), can help integrate adaptation into national planning while collecting, developing, adopting, and implementing adaptation actions. They also serve as a framework under which countries can reduce vulnerability derived from climate change, strengthen their resilience and increase their adaptive capacity (OECD, 2024[26]).
Investing in resilient infrastructure
Infrastructure plays a key role in shaping a country’s vulnerability to climate change and natural disasters and its ability to respond to them. Latin American countries perform better than the Caribbean in terms of infrastructure vulnerabilities, with Antigua and Barbuda, Jamaica and Saint Vincent and the Grenadines presenting the highest infrastructure vulnerabilities in the Caribbean (Figure 3.6). Vulnerabilities are also closely related to physical location. Over half of Jamaica’s economic assets and tourism infrastructure are located in coastal areas, which poses a huge risk given natural disasters and climate change. Integrating climate considerations into long-term strategic infrastructure planning is a priority for the region, also in light of its significant investment needs in climate-resilient infrastructure.
Note: The ND Gain Infrastructure Vulnerability Country Index captures the vulnerability of coastal and energy infrastructure to climate change. This relates primarily to general preparedness for climate-related natural disasters, coastal hazards, and energy supply challenges. It considers six indicators: projected change of hydropower generation capacity; impacts of projected change of rising sea levels; dependency on imported energy; population living under 5m above sea level; electricity access; and disaster preparedness. The Latin America average comprises 18 countries: Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The Caribbean average contains ten countries: Antigua and Barbuda, Barbados, Dominican Republic, Grenada, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Suriname, and Trinidad and Tobago. The OECD group includes all OECD member states.
Source: Authors’ elaboration based on ND-GAIN (2021[1]).
New infrastructure should be developed in a resilient way that considers climate risks. Development finance institutions play a key role in helping to finance this kind of infrastructure in the Caribbean (Chapter 5). Box 3.1 presents some examples of Caribbean countries that use a resilient infrastructure approach to increase climate resilience.
In Saint Lucia, strategic long-term infrastructure planning is crucial to enhance resilience in the face of significant climate challenges. The island uses several key tools for maximising climate-resilient infrastructure development: i) a national infrastructure assessment ensures future projects meet economic, environmental, and social needs; ii) strategic planning focuses on critical sectors like energy, water supply, wastewater, and solid waste management, integrating future demand changes and tourism impacts; iii) aligning assessment and planning with the SDGs and the Paris Agreement ensures priorities in the National Adaptation Plan (NAP) are integrated into the national infrastructure assessment; and iv) the National Integrated Planning and Programme Unit, facilitates cross-ministerial co-ordination guiding the island’s infrastructure strategy. These efforts aim to build resilient infrastructure that can withstand and adapt to climate change impacts, promoting sustainable development and enhancing residents’ quality of life (UNOPS, 2020[27]).
Since 2014, Dominica has implemented the Disaster Vulnerability Reduction Project (DVRP). The DVRP aims to bolster resilience to climate hazards through investments in robust infrastructure and enhanced hazard data collection and monitoring systems. In 2017, for example, Hurricane Maria caused more than USD 1 billion in damages. However, Dominica's airport resumed operations within days, demonstrating the effectiveness of resilient infrastructure rebuilt after Tropical Storm Erika in 2015 (IMF, 2021[28]). In 2018, Dominica enacted the Climate Resilience Act, reaffirming its commitment to becoming a climate-resilient nation after recovery. As part of its 2030 Development Plan, the country aims to make 90% of all homes resilient. To achieve this, it introduced new building standards and fiscal incentives. The Housing Recovery Project pledged to deliver 5 000 resilient homes for vulnerable populations by 2030, having achieved 36% of this goal by the end of 2023 (Government of Commonwealth of Dominica, 2022[29]; Business View, 2023[30]).
The Richard Haynes Boardwalk in Barbados is a key project under the Government's Coastal Infrastructural Programme, aimed at mitigating hurricane impacts on shorelines and beaches. Located in a densely populated coastal area, its goals include promoting shore protection and stabilising beaches during severe climate events. The structure was designed with considerations for climate change, including storm surges and projected sea level rise, ensuring resilience against intense waves while safeguarding the local population now and in the future (Cashman and Nagdee, 2017[31]).
Grenada recently secured USD 15 million to invest in transportation infrastructure resilient to the impacts of climate change and natural hazards. The Grenada Resilience Improvement Project will finance interventions to protect principal transport corridors against coastal erosion fuelled by sea level rise and flooding at the crossing of the country’s largest river (World Bank, 2022[32]; NEMO, 2024[33]).
Developing effective early warning systems
Climate change adaptation and disaster risk reduction interventions aim at increasing resilience by protecting communities and infrastructure from natural hazards by minimising disaster losses (OECD, 2023[3]). Enhanced coherence between policies through co-ordinated action among stakeholders can improve interventions and support local development informed by climate change. For example, integrating EWS with disaster risk reduction strategies can significantly boost resilience. Successful EWS require people-centred technology development, robust data management, forecasting capabilities, innovation, and sustainable funding to ensure their success.
Caribbean countries have been frontrunners in developing EWS. Antigua and Barbuda, Dominica, Dominican Republic, Saint Lucia and Saint Vincent and Grenadines have implemented projects to create EWS national assessments and roadmaps, with support from the United Nations Development Programme (UNDP), the International Federation of Red Cross (IFRC), and the Caribbean Disaster Emergency Management Agency (CDEMA). These involve the sharing of best practices and tools that can improve risk knowledge, monitoring, and response capacities (CDEMA, 2024[34]). The World Meteorological Organisation (WMO) multi-hazard EWS checklist has been instrumental in helping countries identify gaps in their EWS systems and provide a roadmap for improvement (WMO, 2018[35]). Other efforts include technical training, test runs for new meteorological products, and regional tools for improving adaptation policy monitoring. Moreover, the Climate Risk Early Warning Systems (CREWS) Caribbean project prioritises investments that support EWS developed with the participation of local communities (OECD, 2023[3]).
In addition to EWS, effective management of extreme weather events requires robust disaster preparedness at both national and local levels, including healthcare, shelter, and essential relief supplies. Long-term strategies, such as constructing resilient infrastructure and investing in ecosystem preservation, are equally critical for strengthening overall resilience to natural hazards (OECD, 2023[3]).
Investing in the development of capacities in public institutions is key to making this possible (see Chapter 4). For instance, the Department of Emergency Management of Barbados has been working on EWS projects for several years. The leading programme focused on tsunami preparedness and includes multi-hazard warning systems. These measure canals to indicate the risk of flooding, set up automatised sirens throughout the city and establish shelter areas. They also promote involvement of the community with annual drills for natural disasters, involving the local population in a community-based approach to disaster management (UNDRR, 2022[36]).
Climate adaptation planning instruments
National Adaptation Plans (NAPs) serve as a comprehensive framework under which countries aim to reduce vulnerability derived from climate change, strengthen resilience, and increase their adaptive capacity. The development of a NAP has also become an accepted process through which countries align their adaptation actions with other international frameworks and goals. These include the specific Sendai Framework for Disaster Risk Reduction, or more generally the SDGs.
While most Caribbean countries have adopted national legislation or policy frameworks on climate adaptation or resilience, Grenada (2009), Haiti (2023), Saint Lucia (2018), Saint Vincent and the Grenadines (2019), Suriname (2020) and Trinidad and Tobago (2023) have submitted their NAPs under the United Nations Framework Convention on Climate Change (UNFCCC). Other countries are including adaptation considerations in sectoral or specialised legislation, but there remains a gap between the introduction and effective implementation of national climate adaptation plans. Major challenges include aligning NAPs with sectoral plans, securing implementation budgets, and obtaining detailed climate impact information (OECD, 2023[3]).
Only Saint Lucia and Grenada have submitted sectoral NAPs (Annex Table 3.A.2). In the case of Saint Lucia, the sectoral approach includes specific adaptation actions for sectors such as tourism, water, agriculture, fisheries, infrastructure, natural resource management, education, and health (Government of Saint Lucia, 2018[37]). NAPs are not the only tool available for countries wishing to advance with setting and implementing climate adaptation policy measures and actions.
Adaptation is also addressed in the NDCs that countries use to make plans for reducing greenhouse gas emissions, adapting to climate change, and recording the reduction in their emissions. All Caribbean countries have submitted their NDCs including adaptation goals. A total of 60% of Caribbean countries have covered all sectors within their NDCs commitments (Annex Table 3.A.1). Belize was the only Caribbean country to submit a Long-term Strategy (LTS), which lays out policies to achieve carbon neutrality by 2050 (Annex Table 3.A.1). Belize’s LTS elaborates on different scenarios for lowering emissions for each sector, dividing it by sectors: forestry, electricity and energy use, transport, agriculture, and waste (UNFCC, 2023[38]).
To ensure policies align with international targets and national environmental commitments, countries should update NAPs regularly. This process should use evidence-based analyses and examine trade-offs and synergies with sectoral and non-climate policies while aligning adaptation goals with mitigation efforts (OECD, 2023[3]).
Caribbean countries need to implement adaptation, readiness and resilience policies, which can turn challenges into opportunities. This section highlights some strategic sectors that can provide opportunities to increase resilience while advancing the diversification of Caribbean economies and achieving higher well-being for their people: i) energy transition; ii) blue economy; iii) the circular economy; iv) sustainable tourism; v) sustainable transport; vi) nature-based solutions (NbS); and vii) digital transformation.
The energy transition can drive sustainable economic growth while increasing resilience
Transitioning towards a more diversified and sustainable energy mix in the Caribbean can help the region to increase resilience and economic growth. Increasing renewable energy production, improving energy efficiency, and developing more reliable and efficient electrical systems in the Caribbean is key. For instance, the IDB estimates that an investment of USD 11 billion in this area could generate up to USD 6.1 billion in net economic benefits, reduce fuel oil imports by 260 million barrels and save up to 41 million tonnes of CO2 emissions by 2040 (IDB, 2020[39]).
The Caribbean's shift to a low-carbon energy system faces relevant challenges, including high implementation costs, small energy grids ill-equipped to incorporate renewables, limited space for large-scale solar or onshore wind farms, and vulnerability to climate events that threaten energy infrastructure. Additionally, the top-down, vertically integrated utility companies, limited access to affordable financing for governments and clean energy developers, and weak public administrative capacities contribute to slowing progress.
A successful energy transition should address transitional risks to guarantee a just transition while transforming energy infrastructures to a low-carbon economy, reducing the risks of stranded assets, particularly in Caribbean oil-producing countries, and the impacts on workers in brown sectors by providing retraining opportunities and compensation measures (IDB, 2016[40]; EIB, 2021[24]; OECD et al., 2022[41]). The transition could adopt a hybrid energy approach, integrating clean energy sources alongside low-carbon fossil fuels, such as natural gas, to replace bunker fuel and diesel, and supporting the region’s energy transformation (Atlantic Council, 2023[42]). This transition also requires a new business model for utilities while ensuring that electricity costs remain low for consumers and profitable for governments and the private sector. Finally, national action will not be enough. International partners have a key role in advancing the transition and helping guarantee energy security in the region (Chapter 6).
Caribbean tourism-dependent economies rely heavily on imported fossil fuels. Nine Caribbean countries with data available produce over 80% of their electricity from imported fossil fuels, except for oil-producing Trinidad and Tobago, Suriname and Guyana (World Bank, 2022[43]). This heavy reliance on fossil fuel imports translates into some of the highest average electricity prices globally. According to the World Bank, in 2019 the average price for a kWh in the Caribbean stood at USD 0.26, surpassing the European Union (USD 0.21 kWh) and the United States (USD 0.18 kWh) (World Bank, 2022[43]).
The energy mix of oil-producing Caribbean countries is also heavily dependent on fossil fuel sources. Diversifying energy sources would help enhance energy security in the region. This, in turn, makes it less vulnerable to global oil price fluctuations, fostering resilience and reducing energy costs at the household level.
Many Caribbean countries have already made significant efforts towards the adoption of renewable energy technologies, deploying geothermal energy projects (Dominica); solar water heating (Barbados) and windfarms (Jamaica). Barbados has implemented a comprehensive National Energy Policy framework aimed at transitioning to 100% renewable energy by 2030 (Table 3.1). The Caribbean Community (CARICOM) has set a regional target of 47% renewable energy in total electricity generation by 2027. Nonetheless, in most Caribbean economies renewable energies are still limited. In 2022, on average, renewable energy production in the Caribbean (17%) lagged compared to Latin America (63%). Hydropower (15%) is the most widespread renewable electricity source in the Caribbean followed by solar (2.5%) and eolic (1.3%) (Figure 3.7). Belize, Suriname, and Haiti stand out based on their hydropower capacity. The Dominican Republic and Jamaica show a more diversified electricity generation combining hydropower, eolic and solar, while Barbados has prioritised solar energy (Figure 3.7).
Note: Total renewable electricity generation for selected countries. The Caribbean average included Barbados, Belize, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, and Suriname. The Central America average includes Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama. The Latin America average includes Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The South America average includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.
Source: Authors’ elaboration based on SieLAC (2024[44]).
Offshore wind energy represents an opportunity to diversify the energy matrix in the Caribbean. It could generate additional 473 GW or about 97.5 times the electricity currently generated from all sources in the Caribbean (4.85 GW in 2022) based on the Caribbean countries with available data on electricity production installed capacity (Figure 3.8). Offshore wind energy could help reduce dependence on fossil fuels and enable the possibility of exporting energy (World Bank/ESMAP, 2020[45]). If this potential is fully achieved, offshore wind would multiply by 100 times the current electricity generated from renewable and non-renewable sources in Jamaica (from 0.5 GW to 50 GW), and by 26 times the electricity currently produced in the Dominican Republic (reaching 65 GW). Trinidad and Tobago is undertaking an offshore Wind Resource Assessment Programme to realise the activities required to support offshore wind development in the country. Of all the renewable energy sources available in Trinidad and Tobago, offshore wind offers the largest potential for the island (GASCO, 2022[46]). A combination of policies entailing financial incentives and international co-operation actions will be needed to overcome investment, regulatory and logistical challenges and unlock the region's offshore wind potential. IDB estimates show that by 2040, energy generation from solar PV will reach an estimated 179GW annually under the sustainable energy pathway, compared to only 9 MW (0.009 GW) in a business-as-usual scenario (IDB, 2020[39]).
Notes: The offshore wind technical potential is an estimate of the amount of generation capacity that could be technically feasible with current technology, considering only wind speed and water depth, and it is expressed in terms of installed power capacity in gigawatts (GW) within 200 kilometres of the shoreline. Results report the total fixed foundations potential and the total floating foundations potential. Above 50 m depth is considered optimal for fixed foundations and, 50-1 000 m depth is where floating wind can be considered. The Caribbean region includes Antigua and Barbuda, Barbados, The Bahamas, Dominica, Dominican Republic, Grenada, Jamaica, Haiti, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, Suriname, and Trinidad and Tobago.
Source: Authors’ calculations based on World Bank/ESMAP (2020[45]).
A successful energy transition strategy for the Caribbean should pursue multiple objectives simultaneously. These include modernising the electric grid, enhancing distributed generation, improving energy service quality and efficiency, and advancing towards vertically integrated systems while exploring decentralised power generation as a climate adaptation measure. Mobilising finance and reducing risks to scale up energy projects is crucial, supported by innovative financing mechanisms (Chapter 5) and international partnerships (Chapter 6). These partnerships can bolster regional energy security and resilience, such as through electricity integration via submarine cables for geothermal energy (e.g. in Saint Lucia, Saint Vincent and the Grenadines, Saint Kitts and Nevis, and Dominica) and maximising distributed generation from solar and wind sources (ECLAC, 2020[47]).
The blue economy offers a pathway to sustainable growth with employment creation and higher well-being
Defined by the OECD as the sum of the economic activities of ocean-based industries, and the assets, goods and services of marine ecosystems, the blue economy can boost economic diversification, providing sustainable growth opportunities and reducing economic vulnerabilities, if pursued sustainably (OECD, 2024[56]).2 The goal of applying the blue economy concept as a lens is to emphasise the connection between the ocean’s ecological systems and the human activity that takes place in the ocean economy. The concept recognises that some activities in the ocean economy depend on the underlying ecological systems (the natural capital), while all have the potential to degrade them. Blue carbon ecosystems protect coasts from flooding, buffer ocean acidification, enhance water filtration, promote biodiversity conservation, help carbon sequestration, and boost sustainability in fishery productivity, which in turn creates jobs and increases economic returns (IPCC, 2019[57]). So far, the region’s ocean economy is not well-measured or sufficiently understood. According to the World Bank, the blue economy generated revenues of USD 407 billion in the Caribbean in 2012, mainly from ocean transport, tourism, and oil and gas production, in an area that contains just 1% of the global ocean (World Bank, 2016[58]). The fishing industry alone employed over 350 000 people in 2019, producing more than USD 500 million of revenues in the Caribbean (CAF, 2021[59]).
The Caribbean is particularly well-placed to benefit from the blue economy due to its rich marine biodiversity and reliance on ocean-based industries like tourism and fisheries. The region hosts almost 10% of the world’s coral reefs, approximately 45% of its fish species and 25% of its coral species (UNEP, 2019[60]). However, the region faces significant challenges in pursuing a blue economy. First, coral coverage is declining drastically with 75% of reefs at risk due to human activities (World Bank, 2016[58]). Second, the region needs to preserve biodiversity and ensure the health of marine environments. Third, it must address marine pollution, as 320 tonnes of plastic waste remain uncollected annually in the region (World Bank, 2023[61]). Fourth, after more than a decade since the first mass stranding of sargassum in the region, sargassum has become a major threat to local ecosystems and tourism and fishery economic activities contributing to major negative economic, environmental and health impacts.
Developing new opportunities from an expanding global ocean economy, such as renewable energy and aquaculture, is key to advancing sustainable development in Caribbean countries (OECD, 2020[62]). Some key actions to confront these challenges and realising the opportunities of the blue economy are: i) adopting a sustainable marine resource management approach to preserve the ecosystems that underpin key sectors like tourism and fisheries; ii) enhancing coastal resilience against natural disasters for maintaining economic stability and protecting people leaving in those areas (World Bank, 2016[58]); iii) implementing holistic policy frameworks with a spatial perspective; iv) implementing policies to promote investment in existing and new blue economy enterprises. Significant opportunities for value addition and job creation in the Caribbean lie within small and medium-sized enterprises (SMEs) operating across blue economy value chains. To support the growth of these firms, securing finance for start-ups, capacity building, and technological advancement will be key.
Examples of the responses mentioned above are the development of a blue economy strategy in Grenada (“Blue Growth Master Plan”); the adoption of integrated coastal zone management (ICZM) strategies in Belize; and Marine Spatial Plans (MSP) to integrate environmental, economic, and social policies to protect marine resources and biodiversity in The Bahamas. The Seychelles (“2018 Blue Economy Strategic Framework and Roadmap”) and Mauritius’ (“Oceans economy road map”) provide other relevant blue economy examples in Small Island Developing Stated (SIDS) (OECD, 2020[62]). Some Caribbean countries have created blue economy ministries, for example, the Maritime Affairs and Blue Economy Ministry in Barbados, or the Ministry of Economic Development, Planning, Tourism, Creative Economy, Culture, Agriculture and Lands, Forestry, Marine Resources and Cooperatives in Grenada.
Other relevant instruments focus on finance, insurance and regional co‑operation. Financial and conservation tools, for example, include using Blue Bonds like the Caribbean Blue Economy Financing (BLUEfin) or the Caribbean Biodiversity Fund (Chapter 5). Insurance instruments such as the Caribbean Catastrophe Risk Insurance Facility provide financial safety nets to mitigate natural disaster impacts Finally, processes such as the Caribbean Regional Fisheries Mechanism – which promotes responsible use of fishery resources – strengthen regional co-operation (Table 3.2).
The circular economy can contribute to mitigation and adaptation objectives
Promoting the circular economy is particularly relevant for the service-based economies of the Caribbean. A circular economy approach aims to extend the lifespan of materials, reduce waste by design, enhance resource efficiency, promote innovative sustainable business models and create a balanced relationship between economic activity, environmental stewardship, and social well-being (Circle Economy, 2023[77]). In the Caribbean, the circular economy could contribute to more sustainable tourism, and create quality formal jobs, while reducing emissions and negative externalities (OECD et al., 2022[41]). This model provides a viable alternative to current development strategies and directly addresses the threefold environmental crisis (UNEP, 2023[50]). Table 3.3 provides an overview of policy instruments and relevant experiences to advance the circular economy in the region.
The development of supportive financial mechanisms is crucial. Leveraging environmental, social, and governance funding can attract investments in circular economy projects. Such financial models have proven successful in enhancing corporate profitability and reputation, as well as reducing the cost of debt and financing for circular initiatives.
Clear regulatory frameworks and economic incentives, such as tax benefits and subsidies for businesses adopting sustainable practices, can further stimulate the transition to a circular economy. These measures, combined with comprehensive educational campaigns to raise awareness and build capacity among stakeholders, can create a robust foundation for a thriving circular economy in the Caribbean (Van Hoof, Núñez Reyes and De Miguel, 2023[78]).
Regional co-operation and the establishment of a unified framework can boost the acceleration of a circular economy. Platforms like the Latin American and Caribbean Circular Economy Coalition, facilitate the sharing of best practices and resources among member states. By fostering collaboration, these kinds of initiatives can help streamline efforts and ensure consistency in the implementation of circular economy principles across the region (Van Hoof, Núñez Reyes and De Miguel, 2023[78]; Circular Economy Coalition, 2022[79]).
Sustainable tourism is vital to balance economic growth with environmental preservation
Tourism is a cornerstone of the Caribbean economy, accounting on average for 25.4% of Caribbean countries’ GDP between 2015-19, and employing 2.35 million (13.4% of total jobs) in 2021 (WTTC, 2022[86]; ECLAC, 2023[87]) (Figure 3.9). The sector’s contribution to GDP varies significantly across Caribbean countries, ranging from 3.2% (Suriname) to 42.8% (Grenada). Over the next decade, the sector is expected to grow at an average annual rate of 5.5%, more than double the projected growth rate of the overall economy at 2.4% (WTTC, 2022[86]) This presents a significant opportunity for the Caribbean to leverage sustainable tourism, which can attract higher-spending tourists and add greater value to the local economy. The Caribbean's unique natural beauty and commitment to environmental preservation make it well-positioned to become a leading destination for sustainable tourism, enhancing the sector's long-term viability and resilience.
Note: The Latin American average includes 16 countries: Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The OECD average includes Australia, Austria, Chile, Czechia, France, Iceland, Japan, Kora, Luxembourg, Mexico, Norway, Slovak Republic, Slovenia, Spain and Sweden.
Source: Authors’ elaboration based on (Gomez Garcia et al., 2021[88]; OECD, 2020[89]).
Several policy instruments and strategic initiatives can help advance sustainable tourism development in the Caribbean. National sustainable tourism policies can set a vision and outline objectives to achieve sustainability (CTO, 2020[90]). Legislation can support sustainable tourism and climate strategies. Finally, promoting a supportive tax and incentive environment can encourage investments and optimise public spending to ensure future tourism investments are sustainable. Some examples of the latter include simplifying tax compliance; providing tax benefits; and expanding incentives for sustainable practices and climate responsiveness, such as mandatory Environmental Impact Statements for all tourism projects (CTO, 2020[90]).
Several Caribbean nations have made significant strides in sustainable tourism (Table 3.4). The Sustainable Development Master Plan of Andros Island in The Bahamas aims to transform the island into a model for sustainable ecotourism. To that end, it would leverage its natural assets, such as national parks and unique attractions like blue holes and underwater caves. Ultimately, the master plan would guide sustainable tourism investment and decision making over the next 25 years (CTO, 2020[90]). In Belize, the National Tourism Council Act establishes an autonomous council to enhance tourism management, ensuring collaborative public-private sector efforts to sustain tourism practices (CTO, 2020[90]). In Saint Kitts and Nevis, the Sustainable Destination Council (SDC), established in 2013, fosters public-private partnerships (PPPs) to enhance sustainable tourism. The SDC engages stakeholders to support initiatives like water conservation and plastic waste reduction. It was instrumental in creating the Heart of Saint Kitts Foundation, which collaborates with local businesses to promote sustainability and protect the island’s natural and cultural assets (CTO, 2020[90]).
Sustainable transport can enhance accessibility, connectivity, and economic growth
The transition to sustainable transport is another important objective for the economic and environmental future of the Caribbean. Fuel imports account for approximately 10% of the region's GDP on average, with the transport sector consuming 30% of these imports (CCREEE, 2024[93]). Sustainable transportation can reduce the dependency on fuel imports, promote energy diversification and efficiency, increase air quality, improve daily commutes to enhance the quality of life in the Caribbean and reduce GHG emissions (CCREEE, 2024[93]).
Successful strategies to promote sustainable transport would improve the efficiency and resilience of transport systems, accessibility, and connectivity (United Nations, 2021[94]). They require the design and implementation of strategic policy frameworks, at the national and regional level; the broader adoption of digital technologies and digital transformation (e.g. using the Internet of Things, artificial intelligence, and blockchain) to enhance efficiency and integration (United Nations, 2021[94]); and higher investment in multimodal and modern transport solutions. The harmonisation of regulatory standards at the regional level encourages cross-border co-ordination and facilitates smoother transport and logistics (Monios and Wilmsmeier, 2020[95]) (Chapter 6). Table 3.5 provides an overview of relevant policy instruments and experiences to advance sustainable transport in the region.
Nature-based solutions as a policy tool for climate adaptation and local economic development
The Caribbean region is progressively incorporating Nature-based Solutions (NbS) to address climate change, enhance sustainable development, and increase resilience to environmental challenges. NbS such as wetland restoration and forest conservation, are increasingly acknowledged for their ability to offer robust natural defenses against climate risks (OECD, 2024[26]). These strategies play a crucial role in mitigating the impacts of climate change and addressing associated threats.
NbS contribute to biodiversity conservation, climate adaptation, and local economic development while helping to solve issues such as flooding, lack of access to water, and land sliding (WRI, 2021[100]; UNDP, 2021[101]). Integrating NbS into national and regional development plans can ensure these solutions are considered in infrastructure and urban planning. For example, NbS in the water and sanitation sectors can improve water quality and supply while mitigating flood risks. The Bahamas’ National Biodiversity and Strategy Plan has successfully restored mangroves and seagrasses, augmenting the number of fish stock available while reducing the risks of coastal flooding during storms (CBD, 2024[102]). Moreover, international biodiversity funds, such as the Green Climate Fund (GCF), are financing NbS projects in Saint Lucia, helping to reforest degraded land and restore wetlands, improving the access to water while transferring knowledge on sustainable agriculture practices (GCF, 2022[103]). NbS should be considered alongside other solutions due to their ability to provide multiple benefits, such as enhancing biodiversity, supporting livelihoods, and offering cost-effective and sustainable protection against climate risks, especially in urban contexts. NbS and circular economy principles could help transform sargassum, a major threat to local ecosystems and the tourism and fishery sectors, into an economic opportunity. Sargassum transformed into different by-products such as fertilisers, raw material for biodegradable plastics, cosmetics, electricity and biomass could become a resource to boost local economies’ resilience. Table 3.6 provides an overview of relevant policy instruments and experiences to advance the use of NbS in the region.
Digital transformation is a pivotal element in the region's sustainable development agenda
Digital transformation can drive economic growth, improve governance, and enhance resilience against natural disasters, ultimately leading to a more prosperous and sustainable future for the Caribbean. In 2021, the Caribbean had 78% of internet users, compared to 72% in Latin America and 89.3% in the OECD.
The relevance of digital transformation is particularly significant for the Caribbean due to its unique geographic and economic context. As a region composed largely of SIDS, digital connectivity can help overcome physical barriers, providing access to global markets, education, and services that their geographic isolation would otherwise limit. However, the cost of digital infrastructure can be high particularly for small countries, posing a challenge that requires innovative solutions.
Targeted policy instruments and strategic initiatives are essential to drive digital transformation effectively. At least 11 Caribbean countries have already developed policy frameworks for digital development (Alexander, Døhl Diouf and Prescod, 2023[111]). Digital skills and training programmes help improve digital literacy and skills among the population. In Barbados, digital literacy programmes contribute to bridging the digital divide and equip the workforce with the necessary skills to thrive in a digital economy. Table 3.7 provides an overview of relevant policy instruments and experiences to advance the digital transformation in the region.
This chapter has underscored the Caribbean’s unique vulnerabilities to climate change. However, it also highlights opportunities for transformation through proactive adaptation and sustainable development strategies. Context‑specific socioeconomic characteristics, challenges and possible solutions call for tailored approaches across Caribbean countries. However, some overarching considerations as those presented in Box 3.2 can help countries establish effective “policy menus” and achieve a good policy mix.
Build resilience to address high exposure to climate threats
Design and implement adaptation measures to tackling climate vulnerabilities and fostering climate resilience.
Invest in resilient infrastructure to protect people and promote economic stability, as it significantly reduces GDP losses by minimising the destruction of capital during natural disasters.
Integrate climate change adaptation with disaster risk reduction measures, such as EWS and civil protection systems, to enhance countries’ capacity to mitigate the economic, environmental, and social impacts of extreme climate events.
Implement NAPs and other policy instruments, including NDCs and LTS to help integrate adaptation into national planning while collecting, developing, adopting, and implementing adaptation actions.
Harness the potential of rich biodiversity and unique natural endowments
Advance from a vulnerability-focused perspective to identifying strategic areas of opportunity that a green and just transition can bring to the Caribbean while advancing climate-resilience.
Transform the region’s production matrix to foster sustainability, create quality jobs, enhance well-being and address climate-related challenges.
Foster opportunities in strategic areas such as energy transition, the blue economy, the circular economy, sustainable tourism, sustainable transport, nature-based solutions and digital transformation.
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Note: NDC=National Determined Contribution; GHGBAU=Greenhouse gas emissions/business-as-usual.
Source: Authors’ elaboration based on OECD (2023[3]) and UNFCCC (2024[116]).
← 1. Transition risks refers more specifically to the financial risks that could arise from the transition to a lower-carbon economy. For insurance firms, this risk factor is mainly about the potential repricing of carbon-intensive financial assets, and the speed at which any such repricing might occur. To a lesser extent, insurers may also need to adapt to potential impacts on the liability side resulting from reductions in insurance premiums in carbon-intensive sectors (IDB, 2016[40]).
← 2. There is still no single accepted definition of the blue economy. Four selected definitions conceive the blue economy as: i) the sum of the economic activities of ocean-based industries, and the assets, goods and services of marine ecosystems (OECD, 2024[56]); ii) the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem (World Bank, 2016[58]); iii) all economic activities related to oceans, seas and coasts covering a wide range of interlinked established and emerging sectors (EU, 2023[117]); and iv) a range of economic sectors and related policies that together determine whether the use of ocean resources is sustainable (UNDESA, 2019[118]).