Environmental vulnerability and debt sustainability in the Caribbean: do we have enough tools to address catastrophic risk?

This policy brief analyzes the challenge for Caribbean countries to invest in climate change adaptation and catastrophic risk insurance when there is limited capacity to a mobilize domestic resources and insufficient multilateral financing. Consequently, large scale natural disasters put at risk the environmental, economic and social viability of environmentally vulnerable countries.

Key points:

• The increasingly frequent occurrence of natural disasters due to climate change put at risk debt sustainability and socio-economic stability of vulnerable developing countries.
• The international community must review and enhance the tools available to such countries to maintain debt sustainability and mobilize resources for climate change adaptation and developmental transformation.
• Measures should include a review of criteria for the prioritization of ODA and concessional lending funds, improved insurance schemes and the establishment of a Global Disaster Mechanism (GDM) under the auspices of the United Nations.