Racquel Moses: “We can do it. Having been the canary in the coalmine… we must save ourselves”

By Nick Hay, Climate Champions Team | October 19, 2023

With Latin America and Caribbean (LAC) Climate Week opening on 23 October, Racquel Moses, Chief Executive of the Caribbean Climate-Smart Accelerator (CCSA) and High-Level Champions Ambassador discusses the region’s climate challenges, transformative investments, groundbreaking innovation, and the indomitable spirit of the region to thrive in the face of adversity.

Why are Latin America and the Caribbean pivotal to solving the climate crisis?

Latin America and the Caribbean are central to the climate change conundrum for two key reasons. Firstly, the region, especially the Caribbean, is on the front-line of intensifying extreme weather. For example, tropical cyclones like Hurricanes Fiona, Lisa and Ian, recently caused devastating damage. The Caribbean’s exposure to climate-related natural disasters mean that its estimated adaptation investment needs exceed USD 100 billion; equal to about one-third of its annual economic output. Similarly, extreme weather is wreaking havoc across Latin America, with a wave of extreme heat leading to severe fires in Argentina’s central Cordoba province. As well as causing lives and homes to be lost, Latin America produces much of the food that we use in the region, so food insecurity is on the rise.

As a climate-vulnerable region, we understand the urgency of scaling systems-change, we want to be at the forefront of climate and nature solutions.

The LAC region is home to many of the world’s most important carbon sinks, like the Amazon, as well as the forests of Guayana, Suriname and Panama, which are helping to protect the planet by absorbing carbon. There’s major potential for these countries to tap into new and under-used sources of finance, such as forest and ocean-based climate bonds, carbon markets and debt for climate swaps. For example, the largest ‘debt for nature swap’, struck by Ecuador and Credit Suisse this year, will funnel at least $12 million a year into conservation of the Galapagos Islands.

The LAC region is at the heart of the climate discussion – our long-running exposure to the impacts have also focused hearts and minds on new solutions.

Which of the four Climate Week “tracks” resonate most for you?

The ‘Energy Systems and Industry’ track really resonates, as that represents such a huge opportunity for the Caribbean.

In the Caribbean, energy consumers face some of the highest energy prices globally due to relatively low generation capacity, a heavy reliance on expensive and volatile fossil fuel imports and outdated power systems. So the transition to clean, reliable energy for all is critical, not just to address climate change, but for our energy security and economic growth.

Many Caribbean islands now see the transition as the key to their own self determinism. For example, Jamaica is targeting a switch to 50 percent renewable energy by 2030. Their astute recent fiscal management has promoted private investment in the transition, which is vital to deliver a transition away from expensive  fossil fuel imports, especially gas). When the cost of the transition is offset against current opex, the transition becomes achievable – and a colossal investment opportunity. For example, 10 Caribbean countries have set 100 percent as their renewable energy goal. At the moment, all but one are below 20 percent renewables. Smart investors can play a defining role in delivering renewable targets, replicating best practice across numerous islands.

Track 3 – ‘Land Ocean, Food & Water’ also resonates strongly. The Caribbean is made up of  big ocean states, so ensuring that our oceans are healthy and productive is really core to our economic outlook. Several Caribbean countries, including Barbados and the Bahamas, have been actively improving ocean protection by establishing marine protected areas and implementing sustainable fishing practices. These initiatives are vital to safeguarding marine ecosystems and promoting long-term conservation, but they are also very expensive. So we’re looking at innovative finance mechanisms to protect our oceans and encourage more countries to commit to protecting 30 percent of coastal and marine areas by 2030.

What key barriers are slowing the transition in Latin America and the Caribbean?

While we try to focus optimistically on the opportunities, there is no doubt that there are challenges, principally the enormous gap between current climate finance for the transition and what is needed. There is a lot of money available, however, it is not reaching the right places. For example, in the area of adaptation (where there isn’t always a clear commercial return) there are many challenges with securing funding.

Adaptation initiatives are in essence about preventing future negative impacts, such as flooding, rather than directly enabling additional economic activity. This makes it difficult to attract private investors who often prioritize ventures with more immediate profit potential.

However, successful climate adaptation provides long-term cost savings and risk reduction that boosts the resiliency of entire economies from climate-related threats. So, investment in adaptation is essential. We need a lot more grant and philanthropic funding to, in turn, attract commercial funding.

In addition, Small Island Developing States (SIDS) are being asked to cover increasing insurance premiums for protection against extreme weather. These policies are vital, but countries which are already stretched are being asked to pay increasingly higher insurance premiums to protect themselves from hazards created by others. It’s like saying we’re all on the same road driving, but the people driving the largest cars don’t have to insure themselves against the damage that they cause if they hit the smaller vehicles. But the small vehicles do have to be insured, and their premiums just keep rising.

In this situation, we are struggling to fund the transition, despite knowing that on the other side of it there is a more hopeful, more inclusive, healthier future for all of us.

Are private investors aware of the investment opportunities in the region?

Private investors are very interested in funding climate action projects. Many of them call themselves ‘impact investors’, however, their primary concern is actually to get commercial returns – so where’s the impact in that?

This issue was highlighted in a study showing that just a handful – five percent – of ESG fund investments actually make a meaningful climate impact towards the Paris targets. Most so-called ESG investments are rated based on how well the company manages environmental, social and governance risks to their own bottom line, for example from hurricanes or carbon taxes.

In practice, this means that when ESG investments are assessed, high impact climate and resilience projects, which can be a lifeline for humanity’s survival, are gauged against other commercial entities that do not deliver any impact. This has caused an ‘ESG-capital allocation gap.’

To bridge the gap we need more understanding of the type of private finance that is needed to actually implement climate action. Regulators have also stepped in over the last decade to formally define what sustainable investments look like which is helping to overcome the confusion. Additionally, concessions should be made on risk to allow projects to attract the needed finance to scale to a point where they can generate returns.

Overall, we need to see greater flexibility and innovation in private finance. There is not a lack of capital available, but there is a lack of understanding of what private finance needs to do in the current landscape.

Are multilateral development banks (MDBs) evolving their response to the climate crisis?

The challenge with the MDBs is that they are structured in a way that limits the level of risk they can undertake while maintaining the protection of their credit ratings. These institutions often rely on a combination of financial resources contributed by member countries, with each member’s financial commitment being tied to their shareholding. So, if MDBs take on investments that are deemed ‘high-risk’ the contributions of its member states could be jeopardized.

However, the “age of global boiling” has turned the concept of risk on its head. MDBs may protect their credit ratings by only lending concessionary finance at conservative rates, but this is starving investment into solutions to address the existential threats of the climate and biodiversity crises. Our trusted MDBs require a transformative upgrade, one that can channel concessionary finance to the Global South. Our worst enemy is time. If we had endless time to address the crisis, we could do it within our existing structures, but we’re up against the clock. Everyone has to figure out how to operate with more agility.

The MDBs have long-standing lending rules in place, but they now need to look through a different lens to become more efficient, to enable capital to flow more quickly, and crowd in  private finance to deliver on projects which are stuck.

What climate and nature projects are you excited by right now?

The Caribbean Climate-Smart Accelerator (CCSA) that I lead has recently launched a very exciting project to promote the use of  climate smart agriculture solutions – including hydroponic growing.

Hydroponic agriculture is an ideal solution for the Caribbean, which has limited arable land and increasingly challenging environmental conditions. By cultivating crops in a soil-less, controlled environment, hydroponics significantly cuts water usage, while minimizing the need for harmful pesticides and herbicides. This innovative approach holds real promise for increasing food security, reducing agricultural runoff, and providing fresh, locally grown produce year-round. We have rolled out hydroponics projects in Barbados, Cayman and Anguilla, and we’re strategizing expansion to more countries. This is a massive opportunity to get young people back into agriculture; to shape a new reliable food production system. With the level of excitement in this space, the only question is just how big can this food solution get?!

The CCSA also nominates candidates for Prince William’s Earthshot Prize, and the level of innovation that we’re seeing is mind boggling. For example, one of the winners, Notpla, has created a bioplastic packaging using seaweed. It’s not just solving a problem, but it’s creating an alternative that is more beneficial in many other ways. For example, instead of packaging pasta in plastic, which has to be removed and disposed of, seaweed packaging can be boiled with the pasta, which provides many nutritional benefits – inspired!

What do you want to see at Latin America and Caribbean Climate Week?

What’s most important to me is the focus on the creation of green jobs in the region. That means helping young people with great ideas to create solutions to the climate crisis. I want to see young people getting involved, not just in activism – which is vital, but also in showcasing new solutions.

Overall, we are very encouraged that we have the talent, ideas and solutions that we need, what we now need is change to unblock the flow of finance, to accelerate the pace of our transition of our economies to a hopeful new future. We can do it. Having been the canary in the coalmine dealing with climate impacts, we have decided that we must save ourselves —but we need others to join us in this global endeavour.

Highlights of the interview can be watched here.

Racquel Moses, Chief Executive Officer, Caribbean Climate-Smart Accelerator and Global Ambassador for the UN Climate Change High-Level Champions

Racquel Moses serves as the CEO for the Caribbean Climate-Smart Accelerator, where she leads the charge in driving climate-smart solutions and sustainable development across the Caribbean region. 

Racquel also contributes to a wide range of disciplines including serving as a Web 3 Board member for Salesforce.com, as a Trustee for the Trinidad and Tobago Olympic Committee, and as a UNFCCC Global Ambassador. As a champion for global climate action, Racquel actively advocates for change and promotes sustainability at a global level.