Top economist proposes ‘passporting’ to attract financing for climate change fight

One of the Government’s top economic advisors has suggested that CARICOM adopts the concept of passporting to attract billions of dollars which he said could pay for climate change resilience and adaptation projects across the region.

Professor Avinash Persaud, who is also the chairman of the CARICOM Commission on the Economy, put forward the idea on Thursday during a virtual lunchtime chat on climate change finance at the Shridath Ramphal Centre of the University of the West Indies at Cave Hill.

The expert on institutional investing suggested that private sector “intermediaries” could be used to “objectively” identify the projects for investment based on a new ranking system and that it could be started by using “some government pension fund money, social security money”.

He called on nations on the frontline of climate change to form alliances to better “fight” for resources and tap the almost $2 trillion (US$1 trillion) he said was waiting to be invested in large sustainable projects.

He said: “One of the things we are trying to do currently is come up with a way of ranking investments based on their climate resilience as an individual investment and how an individual investment impacts the resilience of the country. If we can develop that kind of index then it will allow us to tap that huge amount of investment, that one trillion dollar that wants to invest.”

Stating that traditional investment options were too small to attract major international investors, Professor Persaud said the Caribbean needs to find “intermediaries” that would “gather these small projects together into one group of project and be able to commit to the international investors that all of the projects here meet a sustainability criteria and you can invest in them all together”.

“So you need local people who will monitor and collect and vouch for the credibility of these investments and then go to the outside world,” he said.

He said to further attract international investors “make them get an automatic [passporting] if they commit to only investing in sustainable projects”.

Pointing out that many Caribbean countries already allowed firms to invest if they were operating in another Caribbean territory, Persaud said “it would be great” if the concept of passporting was employed, something similar to what obtains in the European Union bloc.

“It would be great to have a single CARICOM passport for those funds,” he said.

Passporting is a concept that would allow companies registered in one CARICOM state to do business seamlessly in another CARICOM state without requiring additional authorization.

This concept would do away with trade barriers and make it also easier for investments to move across the region.

Persaud said it was time for the region to join forces with other countries battling the climate crisis and share their experiences.

“So I am talking about a group of allies that are much bigger than small island states – bigger in terms of number, quantities and force and are much more powerful groups,” he said while singling out Africa as one region that was also severely affected by the climate crisis,” said the economist. 

“We need to find a way of claiming a greater stake in limited resources. I don’t think we are going to do that by saying ‘we are small island developing states’. I think we will do that by forming allies and coalitions with those on the frontline of climate change and we need to use that being on the frontline to create knowledge, expertise and intellectual property on how the world adapts to something we will all face.”

He said while there has been a lot of focus on climate change with “a lot of sound and fury and activism” over the years, there has not been a lot of progress towards meaningful change.

Professor Persaud said: “If we can persuade the world that the frontline needs investment for adaptation; one thing that will appeal to them, the northern countries and developed countries, is that their technologies will be used. They like the idea of lending to developing countries in order for us to buy their technologies. 

“I think that is going to perhaps be the quid pro quo for getting concessionary funding from the developing world,” said Persaud. “We need to create a research institute on how we adapt to climate change. We need to build that into a knowledge that we own, an intellectual property that we own and that we export.” (marlonmadden@barbadostoday.bb)

EDITOR’S NOTE

Please note a correction has been made to the above story.

It was incorrectly reported that Professor Avinash Persaud suggested a citizenship by investment programme to attract financing to help countries fight climate change.

Barbados TODAY clarifies that Professor Persaud proposed the concept of passporting to attract international investors to boost the region’s response to climate change.  We apologise for any inconvenience caused.