November, all over

The month of November is significant to Barbadians as we commemorate the Independence of the nation and look forward to celebrating all things Bajan. This year global attention was also on our health sector, and the work needed to arrest the rise of NCDs (non-communicable diseases) as November was dubbed ‘Health Awareness’ month.

 

November is also significant for another reason; this month marks the end of the Atlantic Hurricane season, and many breathe a sigh of relief every year at this time.

 

The season was again severe with heavy rainfall, leading to unprecedented flooding in Barbados and the ferocity of Hurricane Melissa on regional neighbours, Jamaica, Haiti and Cuba. The recent, exceptionally intense Melissa, with its measured escalation in wind speed, is undeniable proof of a new climate reality.

 

It is ironic that COP30 was also held in November in Brazil, with little to show in the progress towards climate financing for Small Island Developing States (SIDS) and a global compact for large economies to pay their fair share toward development support to small and emerging economies. It is undeniable that SIDS feel the brunt of the climate crisis while contributing negligibly to the cause of the crisis. The conference of parties appeared to be another year of speeches and hyperbole.

 

The intense climatic events experienced in Barbados and other SIDS represent a vastly unfair share of the climate crisis impact, based on the contribution these countries make to global emissions. Across the CARICOM region, several nations are ranked among the countries globally that have endured the highest economic losses relative to their GDP, from extreme weather events over the past two decades. This overwhelming loss is largely due to the region’s reliance on sectors highly sensitive to climate events, like tourism and agriculture.

 

The sharp increase in wind speed witnessed during major storms is directly linked to the sustained warming of the world’s oceans, which provides the energy that fuels these systems.

 

For micro, small and medium enterprises (MSMEs), which comprise the vast majority of our businesses and often operate with tight budgets and limited insurance, this heightened physical risk translates directly into acute financial instability. For example, studies have modelled that a severe coastal event could shrink the entire Barbadian economy by more than 7 per cent, with the heaviest losses falling on MSME-dominated sectors like tourism, retail, and construction. The message is plain: climate risk is no longer a distant environmental concern; it is a central financial liability that must be managed now.

 

The ability of local businesses to withstand these shocks is weakened by issues related to infrastructure resilience and financial protection. Much of our commercial property and essential service infrastructure was built for a climate that no longer exists. The widespread damage and prolonged power outages caused by even a Category 1 storm like Hurricane Elsa in 2021, showed a severe weakness in both public and private assets. Furthermore, a large portion of business assets, particularly those owned by MSMEs, are either uninsured or underinsured. This forces the cost of recovery back onto the individual business owner or, ultimately, the government. Also, the financial sector, which has many loans secured against coastal properties, faces a rising threat of increasing defaults if a major storm hits.

 

The global context: The crisis of adaptation finance

Globally, the crisis signalled by climate volatility is inextricably linked to the international community’s failure to adequately finance climate adaptation. While SIDS collectively require approximately US$12 billion in average annual finance for adaptation, the actual international public funds directed to SIDS have been significantly less than this necessary amount. This massive gap in adaptation funding represents a critical ethical and economic failing by wealthier nations.

 

Alarmingly, a large portion of the limited adaptation finance that does reach SIDS (nearly half) is provided as debt. This simply worsens the already severe debt distress across many small economies, forcing them to spend money servicing debt rather than investing in essential resilience projects. This is in sharp contrast to the global goal for developed nations to at least double their collective adaptation finance provision to developing countries.

 

Internationally, the best practice is demonstrated by strong regulation that aims to bring in private capital. In developed economies, financial regulators are increasingly requiring banks and insurers to include climate-related financial risks in their routine financial stress tests and public reports. For Barbados, ensuring the future strength of the MSME sector requires the active creation of a national framework that:

1. Requires local financial institutions to better track and report physical climate risks, especially within their MSME loan books.
2. Offers incentives to the private sector, including large companies and international investors, to invest directly in local MSME resilience projects, perhaps through tax relief or preferential loan terms tied to verifiable climate-proofing efforts.

 

The call to action: Mastering the new climate reality

The reality of the new climate condition that the MSME sector must master demands an end to slow, reactive planning and the adoption of a fully proactive, integrated strategy for resilience.
The future success and stability of the sector depend on two key areas of smart adaptation:

• Climate-smart operations: Every small business must conduct a formal assessment of its risks, and invest in stronger building standards and independent energy solutions. This is not an optional expense; it is a critical investment in business continuity and long-term viability.
• Adopting green technology: The MSME sector must become the driving force behind the national energy transition, adopting and promoting green technologies. This approach not only lowers operating costs and reduces reliance on unstable global energy markets but also creates new commercial opportunities.

 

The time for seasonal certainty is past. The intensity and unpredictability of the new climate regime is a definitive test of the resourcefulness and commitment of our economies. We can no longer simply pray for November to come; we must adapt new resilience models as a deliberate country strategy.