–to effectively fund food security, climate adaptation efforts, President Ali tells World Food Forum
–calls for establishment of special adaptation fund for Small-Island Developing states and low-lying coastal states

CONSIDERING the peculiar and special needs of Small-Island Developing states (SIDs) and low-lying coastal states, there needs to be more climate adaptation financing on soft terms, meaning more grants, concessionary interest rates, and long-term repayment periods, President, Dr. Irfaan Ali has said.

In his passionate virtual address during the United Nations (UN)’s Food and Agriculture Organisation (FAO)’s World Food Forum, President Ali said SIDs and low-lying coastal states face peculiar and inherent challenges to their food security.

“These challenges relate to their smallness of land resources and the resultant diseconomies of scale, their remoteness from larger markets, susceptibility to external shocks and market vulnerabilities, narrow revenue bases, fragile ecosystems, and their vulnerability to climate risks.

“These climate related risks include flooding, overtopping of sea defences, swelling of rivers following extreme precipitation, drought, erosion, and natural disasters such as landslides and hurricanes,” the Head of State related during the discussion on the FAO’s Hand-in-Hand initiative.

He went on to say that rising sea levels result in the overtopping of sea defences and the intrusion of saltwater into farm lands and irrigation sources, while extreme weather events, including droughts and floods, disrupt food systems and cause destruction of crops and agricultural infrastructure.

Owing to those threats and challenges, critical resources needed to support production often have to be diverted towards climate adaptation.

Adaptation, according to the United Nations Framework Convention on Climate Change (UNFCCC), refers to adjustments in ecological, social, or economic systems in response to actual or expected climatic stimuli and their effects or impacts.

Climate adaptation financing is absolutely essential and foundational for establishing climate-resilient agricultural sectors in small-island developing and low-lying coastal states. And considering the challenges which SIDs face, financing for food security, President Ali said, cannot be de-linked from climate financing.

“Investment in climate financing rebounds to the benefit of a more resilient agricultural sector,” the Head of State said, lamenting that without climate adaptation, the agricultural sectors of SIDs and low-lying coastal states will be continuously prone to climate risks.

At COP 26 (the 2021 United Nations Climate Change Conference) certain pledges were made to boost adaptation financing.

“But, as I have alluded to elsewhere, the level of financing promised by the developed countries will be inadequate to close the adaptation gap. And without climate financing, the agricultural sectors of SIDs and low-lying coastal states will be challenged to attract investment for production and productivity,” President Ali said.

SIGNIFICANT INCREASE NEEDED
The Guyana Head of State went on to highlight: “An increase in climate finance by at least 500 per cent is needed. Adaptation finance remains far below the scale necessary to respond to existing and future climate change. UNDP’s Adaptation Gap Report, UNDP 2021, estimated annual adaptation costs and developing economies will be between US$155 billion and US$330 billion by 2030.”

The public sector continues to provide almost all adaptation financing, with adaptation increasingly being prioritised in development financing climate portfolios, yet, adaptation finance represents 14 per cent of total public finance. In the Latin America and Caribbean region, adaptation finance totalled US$4.6 billion in 2019-2020, of which US$300 million was from domestic sources.

“According to CPI findings in 2019 and 2020, debt dominated the climate finance landscape. The majority of climate finance, 61 per cent, was raised as debt, of which 12 per cent was low-cost or concessional debt.

“Equity investments, the next largest instrument category after debt came to 33 per cent of total climate finance, up from 29 per cent during the previous year. Grant finance was US$36 billion or a meager six per cent of total flows compared to six per cent in 2017,” President Ali said.

In the case of SIDs, close to half of the limited bilateral finance provided was in the form of loans. Given the scale of climate financing needs and current trends, it is anticipated that the large-scale transfers will continue to be raised through debt rather than through grants.

This is particularly important because, according to President Ali: “For SIDS, and particularly for CARICOM, the trend is of particular concern here. In the worsening debt situation that many face at death have been compounded as a result of COVID-19, global inflation, rising fuel prices, and the current Russian-Ukraine war that is crowding out climate finance- related issues.

“In addition, SIDs bear the added concern of being able to access climate financing made available to them through the UNFCCC financial mechanism, which is largely delivered in the form of grants and concessional loans in a timely manner.”

It is for this reason that President Ali encouraged the FAO to conceptualise and facilitate the establishment of a special adaptation fund for SIDs and low-lying coastal states, disbursed on the basis of a vulnerability index rather than on the traditional measures relating to Gross Domestic Product (GDP).

“I have also called for a Climate Vulnerability Fund. These will help unlock much needed and specially tailored resources for SIDs and low-lying coastal states to help boost their food security. Climate change is too critically interlinked with food production. Climate change is too critically interlinked with the sustainability of the food production system and agriculture support,” President Ali said.

Back in July, during a live broadcast hosted by the Atlantic Council, Adrienne Arsht, Latin America Center, in Washington DC, President Ali had said: “Guyana has all the natural assets to be a leading food producer in the region. But food production today must be backed by appropriate technology and investment in infrastructure that will ensure the agriculture is sustainable and resilient to climate change and the effects of climate change.

“…and this is one example of how the revenues from oil and gas can be deployed to position Guyana, not only for the benefit of Guyana, but to position Guyana to contribute significantly to the food security of the region as a whole.”

The president believes that the prosperity of Guyana must also bring wealth and success to the region.