Climate Change and Effects on Business in Vanuatu

November 21, 2016 8:00 am | Posted in Opinions | Share now TwitterFacebook

I’ve had the privilege of representing the government at the at COP22 in Morocco these past two weeks as part of the delegation negotiating for Vanuatu’s position and accessing funds for the Small Island Developing States. It has been personally a steep learning curve for me and Ive felt like I’ve gone back to school somewhat.

I was able to attended the Sustainable Innovation Forum as well, a partnership between Climate Action and UN Environment, SIF16 is recognised as the largest business focussed event that takes place during the COP (Conference of Parties)

For me, the standout and inspiring speaker was the Mayor of Rio de Janeiro, Brazil, Eduardo Da Costa Paes. This is a man that hosted an Olympics in his city with a zero carbon footprint and engaged with private sector to build and fund more than 70% of the infrastructure.

His opening Statement was “Climate Change was the most significant challenge of our time and future times” He is correct, in Vanuatu right now we are seeing the devastating after effects of Cyclone Pam and more recently the La Nino event resulting in a widespread lack of water throughout our islands of Vanuatu.

Daily Post readers would have read recently of the struggles of an iconic water based tourism business. With business like this we see a loss of jobs occurring, less activities for our tourists, less tax funds into the government coffers and downstream effects to other smaller business. These and events like these will continue to worsen until small island countries and mitigate, then adapt to the changes in our climate.

My company has had to work with many businesses that struggled with the after effects of Cyclone Pam, an extreme weather. More of these events are predicated with changes in our climate.

The shallow view is that our economy is suffering and businesses are simply going broke. The more seasoned view is that Vanuatu is the most vulnerable countries to climate change and we are now seeing these events hitting our business and economy.

Business need to step up and recognising that climate change is here and it’s going to affect Vanuatu for the foreseeable future and we need to focus on resilience in our sectors including manufacturing, agriculture, tourism and fisheries.

Another clear business theme running though all events is access to renewable energy sources/ clean energy, predominantly solar and wind power. Staying in our guesthouse we have some key executives from Facebook and I had some time with the Head of Sustainability for Facebook, Bill Weihl.

A fascinating observation noted is that larger business are less likely to operate in countries where a monopolistic energy situations exist such as we do in Vanuatu.

The cost of doing business is higher and companies are more conscious than ever now about meeting their published climate change obligations. This is an area that needs to be looked at urgently.

An absolute priority is to progress negotiations with Unelco to encourage them to seriously engage in the private sector and allow business to feed surplus solar production back into the grid and offset. This will encourage business to look at clean energy technology to reduce costs and bring the overall cost per megawatt down to all consumers.

I say its time for our current monopoly provider to start some meaningful dialogue. They are a great reliable provider but we need more than that from them.

I heard from speakers noting that large infrastructure developments are less likely to be funded now where there is no consideration given to long term resilience to climate change, this includes town and city development, tourism development, roading large scale developments. Vanuatu businesses in the longer term may struggle to access funding for projects such as these as banks change credit policies.

We already see this in terms of insurance in Vanuatu where some business and properties cannot obtain cyclone insurance now due to exposure to extreme weather events like Cyclone Pam. Without insurance, this effects the ability of the business to obtain finance for growth.

So what is the purpose of this article, those that know me know I’m no activist “greenie”

What I have been able to have access to is a glimpse of the next 10 years and what businesses in Vanuatu need to be ready for. Think of your client market. Think of where you construct your business. Is your business resilient. Are you contributing to renewable solutions in your business? If you are not thinking of these things, you may become one more of the recent sad statistics facing economic struggles.

The cost of doing business is higher and companies are more conscious than ever now about meeting their published climate change obligations. This is an area that needs to be looked at urgently.

Glen Craig is the Managing Partner of Pacific Advisory, a Vanuatu based advisory firm