CARIBBEAN-DBRP executive director says climate change presents an existential threat to SIDS

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NEW YORK, CMC – The executive director of the Development Bank for Resilient Prosperity(DBRP), Dr. Gene Leon, says while the current climate crisis presents an

Although it poses an existential threat to small island developing states (SIDS), it also offers an opportunity to chart a new course based on ecological stability, resilience, and innovation.

“By adopting a systems-approach solution, rethinking our approach to finance, and embracing a multi-stakeholder partnership model, we can build a future that is not only sustainable but also prosperous for generations to come, Leon said as he delivered the feature address at the conference hosted by Aispire Artemis Foundation here.

Speaking on the topic “Voices of Change” during the Foundation’s Climate Week activities, Leon said that the DBRP is a critical part of this vision, providing a platform for SIDS and other land-locked, low-lying coastal developing states to access affordable finance, invest in natural assets, and build resilient economies that are aligned with the principles of sustainability. “Together, we can ensure that SIDS are not left behind but are leading the way towards a more resilient and sustainable future,” he said.

The St. Lucian-born economist said SIDS is on the frontlines of climate change, dealing with increasingly severe storms, rising sea levels, and other environmental threats that jeopardize our ecosystems and economies.

“We are challenged by low voice and representation, inadequate and unaffordable finance, and our high vulnerability and low resilience are not adequately integrated into traditional policy frameworks.

“But light is emerging, and we are also at the cusp of a paradigm shift, one that sees SIDS not as victims of their vulnerabilities but as pioneers of innovative, resilient, and outcomes-driven solutions that will promote the resilient prosperity we deserve.”

Leon, the former president of the Barbados-based Caribbean Development Bank (CDB), said that a systems-approach solution to climate and sustainability challenges requires more than piecemeal solutions.

He said climate regulation, healthy oceans, and diverse ecosystems are not isolated phenomena but part of an intricate and interdependent system.

“To ensure the health of this system, we must adopt a systems-based approach that encompasses a science-based definition of the system and policies to preserve the system’s integrity over time temporal integrity. In other words, our starting point is to recognize that the ultimate anchor is planet earth’s temporal integrity, the home for all biomass and biodiversity”.

Leon asked the conference to imagine a SIDS nation, where the destruction of coral reefs impacts not just marine biodiversity but the livelihoods of coastal communities, the resilience of tourism industries, and even food security.

“If we treat coral reef protection as just a coral reef project, disconnected from these other elements, we miss the bigger picture,” he said, noting that a systems-approach solution treats ecosystems not as individual components but as a network, where the health of one element sustains the health of the others.

“For example, mangroves are critical to preventing coastal erosion, storing carbon, providing nursery habitats for fish, and supporting local fishing industries. Therefore, every policy we design to protect mangroves must consider not only the environmental value of these ecosystems but their economic and social value as well.”

Leon said that, however, there can be no sustainability without resilience, which cannot be built in silos and requires a multidimensional, multidisciplinary approach.

He said it must be ecological, social, economic, and institutional. Only then can we create a truly sustainable resilience ecosystem.

“For SIDS, resilience is not just about bouncing back from hurricanes or recovering from economic shocks. It is about building systems that prevent crises in the first place, enable rapid recovery when shocks occur, and allow a continuation of the pre-shock growth trajectory. ”

He said that to achieve this resilience, “we need an approach that integrates climate action into the fabric of our economic and social systems.

“When designing infrastructure projects, we should consider their immediate economic value and ability to withstand future climate risks. When we develop tourism, we should ensure it supports preserving natural resources rather than depleting them. System degeneration should never be faster than system regeneration.

“This approach is particularly important for SIDS because our economies often rely on a few sectors, like tourism and agriculture, that are highly vulnerable to climate risks.

“We must diversify our economies by building resilience into every sector, from fisheries to financial services. Only then can we ensure that our economies are robust enough to withstand future challenges.”

The former senior International Monetary Fund(IMF) official also suggested a fundamental rethink of how SIDS finances development.

He said that traditionally, financing has been based on individual projects, such as dams, highways, and ports.

“But in a world where ecological and climate risks dominate, and system linkages serve to amplify impact, we must reverse this model. Instead of focusing on individual, circumscribed projects financed by governments, we should focus on an integrated portfolio of outcomes supporting ecological stability and financing through blended finance instruments, thereby promoting joint responsibility.”

Leon said that the impact of investments is important, noting the difference between financing a project to build a coastal wall versus financing the restoration of a mangrove forest. “The former may protect a small section of coastline for a limited time, while the latter will provide a wide array of interlinked benefits, such as carbon sequestration, storm surge protection, biodiversity support, and fishery enhancement.

“By financing the restoration and conservation of ecosystems, we can create cascading benefits for both nature and society. This approach aligns perfectly with the DBRP’s goal of shifting the development model from one that treats nature as a secondary concern to one that places ecological dynamics at the heart of economic decision-making.”

The DBRP executive said that this shift in approach also requires SIDS to reimagine their theory of value.

“Currently, we base value on the economic cost of production, ignoring the environmental and social costs. But we are to incentivize sustaining the planet’s integrity. In that case, we must shift our basis of value to reflect the total ecological cost of production, reward sustainable practices, and penalize those that harm the environment.”

He noted, for example, that a company that produces energy from fossil fuels may be seen as more profitable than a company that invests in renewable energy.

But Leon argued that this profitability ignores the environmental harm caused by carbon emissions, habitat destruction, and pollution, noting that “by reimagining value to include ecological costs, we can re-engineer the concept of return on investment and create market incentives for sustainable practices.

“This could mean incorporating carbon pricing, biodiversity credits, or pollution penalties into our economic systems. It could also mean rewarding countries that invest in ecosystem services, such as clean air, clean water, and healthy oceans, by recognizing the value these services provide in managing the planet’s resources and fostering ecological stability.”

Leon said SIDS must also recognize that in the global financial system, vulnerability is often equated with high risk, which translates into higher costs of borrowing for SIDS.

“This is unjust. Vulnerability should not be penalized. Instead, the international financial system must facilitate resilience-building by lowering the cost of funding for vulnerable countries,” he said, adding that the DBRP advocates for exactly this shift, a financing model that is more aligned with the realities of vulnerable states.

“The paradigm shift I am advocating for must be supported by adequate and affordable finance, underpinned by financial policies recognizing the value of natural assets. Natural

Forests, coral reefs, and fisheries are not just environmental resources; they are economic assets that provide critical ecosystem services.

“By investing in the preservation and restoration of these assets, we can sustain the value of the ecosystem services they provide,” Leon said, adding that one exciting avenue for achieving this is the tokenization of natural assets.

“Tokenization allows us to create digital representations of natural assets that can be traded and invested in, creating new financial opportunities for conservation and restoration. By tokenizing natural assets, we can unlock private sector investment in ecosystem preservation and create new revenue streams for SIDS,” Leon said.

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