Climate finance to support Caribbean Small Island Developing States efforts in achieving their Nationally Determined Contributions in the energy sector

Abstract

Decarbonisation of the energy sector requires immediate action to mitigate the effects of climate change. This paper explored the potential of climate finance to support Caribbean Small Island Developing States (SIDS) efforts in achieving their Nationally Determined Contributions (NDCs) under the 2015 Paris Agreement in the energy sector. A comprehensive overview of the region’s perspective on climate financing needs for mitigation and adaptation activities in meeting their climate targets in the energy sector was conducted. The paper also examined whether the Caribbean acknowledges a role for domestic financing, private sector finance, and fiscal policy reform within their NDCs, as ways to address mitigation and adaptation in energy. The methodology adopted was a content analysis of Caribbean countries’ NDCs and updated NDCs. The data used for the content analysis were obtained from initial and updated NDCs for sixteen Caribbean SIDS. The paper finds that the Caribbean established ambitious mitigation and adaptation goals for its energy sector but is heavily dependent on international climate finance which is not adequate to attain its energy NDCs, while there is a lack of private sector financing as well as innovative domestic private and public sector financing and reform of fiscal incentives to realize these goals.