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CLIMATE CHANGE LEARNING CONFERENCE: The Business Case for Climate Change

Jamaica Pegasus Hotel, Kingston July 17, 2014

TABLE OF CONTENTS

Executive Summary …………………………………………………………………………………………… 2 Session One: The Business Case Opening Remarks by Hon. Robert Pickersgill Minister of Land, Water, Environment and Climate Change …………………………………………… 3 Opening Remarks by Dr. Arun Kashyap UN Resident Coordinator/United Nations Development Programme Resident Representative …… 4 Keynote Presentation by Ms. Hunter Lovins President, Natural Capital Solutions ……………………………………………………………………….. 5 Presentation by Lt. Col. Oral Khan Chief Technical Director, Ministry of Water, Land, Environment & Climate Change ………………. 8 Session Two: The Bottom Line Presentation by Ms. Anaité Mills Climate Change Consultant, Inter-American Development Bank, Jamaica …………………………. 10 Presentation by Mr. Edison Galbraith General Manager, Loan Origination and Portfolio Management, Development Bank of Jamaica…11 Presentation by Ms. Barbara Walker Co-Owner, Hotel Mockingbird Hill …………………………………………………………………………. 12 Presentation by Mr. Jürg Blaser Country Manager, Nestlé Jamaica …………………………………………………………………………. 13 Presentation by Mr. Vaughn Morris Managing Director, SEAL Sprayed Solutions Ltd. ……………………………………………………… 13 Question and Answer Session with Audience ……………………………………………………………. 14 The Way Forward Dr. Elsie Laurence-Chounoune Deputy Resident Representative, United Nations Development Programme ………………………… 14 Relevant Websites and Articles …………………………………………………………………………….. 15

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EXECUTIVE SUMMARY The Jamaican Government’s national plan (Vision 2030) includes two key objectives: for a healthy environment and for hazard risk reduction and adaptation to climate change. Key goals of the Climate Change Learning Conference included raising awareness of climate change among the Jamaican private sector by sharing the latest information on the topic, while emphasizing current and future challenges – and opportunities - for local businesses. The Conference also sought to explain current Jamaican Government strategies; in particular the Draft Climate Change Policy Framework and Action Plan, developed under the Climate Change Adaptation and Disaster Risk Reduction Project funded by the UN Environment Programme and the European Union. This was clearly explained by Technical Director in the Ministry of Water, Land, Environment and Climate Change Lt. Col. Oral Khan. Minister Robert Pickersgill set the tone for the Conference by emphasizing the need for a radical change in thinking on climate change, including among the private sector. The Minister expressed the hope that Jamaican businesses would partner with the Government. Lt. Col. Khan underlined this by inviting the private sector to participate in its planned Flagship Programmes, in particular. United Nations Development Program (UNDP) Resident Representative Dr. Arun Kashyap noted the vulnerability of Small Island Developing States; informed the audience of the UN Private Sector Forum at the upcoming Climate Change Summit in New York; and urged the Jamaican Government to prioritize climate change in its plans. Keynote speaker Ms. Hunter Lovins vividly highlighted the scale and growing influence of climate change, citing several studies and giving examples of its negative effects in the United States and Jamaica. She recommended simple strategies for businesses to increase energy efficiency and save money and gave several inspiring examples of large and small companies that have been successful in reducing carbon emissions while boosting their “bottom line” and creating jobs. Ms. Lovins pointed to the benefits of investing in such strategies and expressed optimism that the speed of climate change can be slowed; and that the private sector, which holds the key to future sustainability, will play a crucial role. She emphasized the many business opportunities that climate change offers, expressing confidence in the entrepreneurial sector, the potential of “green jobs” and the importance of public-private partnerships. She also urged Jamaica to adopt renewable energy immediately, noting that the use (and the huge cost) of fossil fuels is not sustainable. The Conference also enlightened the audience on options for green

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energy loans through two lending institutions, the Development Bank of Jamaica (which expressed hope that businesses would show more interest) and the Inter-American Development Bank (with some focus on the Bank’s Pilot Program for Climate Resilience Project in Jamaica next year). Both financial institutions emphasized their willingness and availability for advice and support. Two small-scale Jamaican entities in the hospitality and manufacturing sectors explained their sustainable practices, which they noted made good business sense; but shared concerns that some Government policies and utilities company practices are hampering their growth. Nestlé’s Jamaican Country Manager shared the huge multinational’s emissions-reducing and waste reduction best practices, pointing to the importance of educating consumers. In summing up, the UNDP’s Deputy Representative urged businesses to consider the key strategies of accountability, advocacy and action as they address climate change resilience and sustainability issues. As noted by audience members, the private sector must be the engine of change, and the changes have to begin now and over the next two years. The UNDP reiterated its willingness to support private sector efforts in this regard, and announced a proposal to create a local chapter of the United Nations Global Compact in Jamaica.

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SESSION ONE: THE BUSINESS CASE Welcome and Introduction: Mr. Albert Daley, Principal Director, Climate Change Division, Ministry of Water, Land, Environment & Climate Change (MWLECC) chaired the session and welcomed participants. He reminded the Conference: “Climate change is really upon us now.” Ninety per cent of Jamaica’s Gross Domestic Product (GDP) is generated in coastal areas; the private sector must not only be prepared but also seek to capitalize on opportunities and become actively involved. Mr. Daley noted the purpose of the Conference was to increase awareness and highlight these business opportunities. Opening Remarks: Hon. Robert Pickersgill, Minister of Water, Land, Environment & Climate Change. Quote: “With climate change, we must change.” Minister Pickersgill welcomed a number of business leaders and decision makers in the room, taking their presence as a sign they are taking climate change seriously. Quoting the biblical parable of the wise and foolish builders, Minister Pickersgill noted the importance of careful forward planning as the private sector prepares for the possible impact of climate change, while at the same time working towards growing and expanding their businesses. Minister Pickersgill outlined some key climate change challenges that are likely to affect Jamaican businesses. Sea level rise will affect economic activities along the coast and the fragile tourism sector. He cited a United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC) study that estimates cumulative losses of marine eco-systems, storm damage and coastal erosion may average up to US$366 million annually in the region. Lower rainfall patterns will particularly affect agro-business. The UN-ECLAC study estimates a decline of up to 20% in sugar production. Increases in ambient temperature: The last three months have been the hottest in recorded history globally, with the hottest day recorded in May. Higher temperatures will affect not only agro-business but also the cost of electricity for cooling factories and office buildings. Minister Pickersgill gave several examples of conditions in Jamaica during the current extended drought. The parish of Clarendon has experienced 27% of its normal 30-year rainfall pattern and the island had 30% of normal rainfall in June. Inflows from springs and rivers are declining and Mona Reservoir is receiving the lowest inflow since it was built in 1946. The Hope River is completely dry. The Meteorological Service of Jamaica has indicated there will be no significant rainfall before January.

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Minister Pickersgill emphasized the message: “With climate change, we must change.” He recognized the issue is still not fully on the “radar” of some business people, who are preoccupied with day-to-day issues in a tough economic landscape. He noted, however, that with some improvements beginning to show in the economy, the private sector must shift its focus to long-term planning for sustainability and resilience. Minister Pickersgill said climate change presents an opportunity for dialogue, discussion and above all action by the private sector, which he hopes will seize opportunities to invest in innovative activities and infrastructure. Those proactive businesses will gain a competitive advantage in the future, he stressed. Minister Pickersgill noted the Jamaican Government does not have the resources to tackle climate change single-handedly; it needs the private sector to come on board and actively engage in climate change adaptation activities. Public-private sector partnerships are crucial. The Green Climate Fund, it is hoped, will achieve US$100 billion of climate finance by 2020. However, Minister Pickersgill pointed to the UN-ECLAC study, which estimates more than 85% of all climate change finance will have to come from the private sector. Minister Pickersgill emphasized that climate change is not just a Jamaican problem, referring to the recent Risky Business Report compiled by Bloomberg, Steyer and Paulson outlining the many and varied impacts of climate change on the U.S. economy and seeking to quantify them. He also referred to the UN Sustainable Development Solutions Network’s report on “Deep Decarbonization Pathways,” which addresses ways in which human activity must be transformed to ensure global warming does not reach beyond the critical 2 degrees Centigrade tipping point. Minister Pickersgill thanked participants for attending, and expressed hope for fruitful discussion resulting in concrete actions. Dr. Arun Kashyap, United Nations Resident Coordinator and United Nations Development Programme Resident Representative Quote: “I would submit that the country should not lose time in integrating climate change adaptation and risk management (to strengthen resilience of Jamaica and Jamaicans) in the national development strategy, Vision 2030 Jamaica…” Dr. Kashyap welcomed the audience and thanked them for their participation. He thanked Minister Pickersgill for attending, recognizing him as a “champion of climate change” for the Caribbean as well as Jamaica. Dr. Kashyap noted the Fifth Assessment Report of the Intergovernmental Panel on Climate Change’s comment that the issue has “moved firmly into the present.” He described climate change as one of the most important global development challenges this century.

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The State of California currently only has enough water for the next two years. Dr. Kashyap noted the serious repercussions already felt in the United States, noting that Jamaica is experiencing similar extremes: drought, water shortages, floods, storms and unpredictable weather patterns. Between 2001 and 2010, Jamaica was impacted by 10 disaster events that cost the country approximately J$111.81 billion. Dr. Kashyap discussed the concerns of Small Island Developing States (SIDS), which are especially vulnerable and ecologically fragile. 2014 is the Year of SIDS, offering an opportunity to focus on this issue. The Third UN Conference on SIDS will take place in Apia, Samoa from September 1-4, 2014. SIDS are not only small; they are often isolated, under-resourced and geographically dispersed, with high levels of inequality and all the difficulties encountered in their many coastal communities. Globally, nearly 70 per cent of the population lives in countries classified as “middle income” (which includes Jamaica); but these countries face many challenges. A University of Hawaii study late last year notes the tropics will feel the effects of rising temperatures first, beginning in the next seven years. Specifically, the study notes that Kingston, Jamaica will be the second city globally to reach the tipping point of a new climate by 2023. The United Nations Secretary General Ban Ki Moon aptly stated, “Climate change affects us all. It is an issue for all people, all businesses, all governments”. The Secretary General will host the Climate Summit in New York in September to catalyze action from governments, businesses, civil society and industry to shift to a low-carbon economy. An important element of the Summit will be the UN Private Sector Forum, convened by the Global Compact with the support of the World Bank Group. The aim is to share strategies to move towards low-carbon practices and reducing emissions, as well as to inspire more public-private partnerships. Many businesses globally have already incorporated climate change into their business models, as they realized the impact it will inevitably have on their bottom line in the future, as with any adverse shocks. Beverage industries now have a CEO Water Mandate to ensure water stewardship and more than 100 leading international insurance companies have called on governments worldwide to employ risk management techniques and expertise to help the developing world adapt to climate change. Evidence shows that such proactive firms have weathered economic setbacks more comfortably, Dr. Kashyap emphasized. Those who recognize the increasing awareness of consumers on such issues as human rights, sustainability etc. have also seen benefits. These companies are also paying much closer attention to the supply chains for their products, as well as purchasing policies, contracting and so on. Development choices have a major impact on a country’s vulnerability to climate change. Dr. Kashyap said Jamaica should not hesitate to integrate climate change adaptation strategies into all aspects of Vision 2030. This priority issue for Jamaica must involve the private sector, which must step up and play an active

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role. As Jamaica seeks to strengthen its economy and build growth, as well as create a more equitable society, sustainability must underpin its efforts.

Dr. Kashyap said the Jamaican Government’s Climate Change Policy Framework and Action Plan is an important step towards creating robust strategies. Today’s Learning Conference is an effort to include the business sector in the discussion, with a view to action, participation and collaboration. Dr. Kashyap noted the UN stands ready to support the Jamaican Government and looks forward to working more closely with the business sector on climate change adaptation issues. Under the Green Climate Fund, US$100 million will be made available annually. Countries able to garner resources must have strong private sectors to build institutional capacity and maintain resilience. He quoted the UN Secretary General’s comment: “Future generations will judge our action on the issue [of climate change]. In 2014, we have the chance to step over to the right side of history. Let’s take it.”

Keynote Presentation: Ms. L. Hunter Lovins, President, Natural Capitalism Solutions, Colorado, U.S.A. “Climate Change: What it Means for Business” Mr. Albert Daley, Chair, introduced Ms. Lovins. Ms. Lovins noted the Ministry of Water, Land, Environment and Climate Change is virtually the only government department in the world with “Climate Change” in its name. She says there is “no more important conversation in the world.” Ms. Lovins pointed to several major indicators showing “climate change is real.” If you are a business operating in any physical space anywhere in the world you will be affected by climate change (and probably already are), she pointed out. It is time for Jamaican businesses to embrace change. One of the indicators noted by Ms. Lovins is that the planet is losing its major eco-systems. Currently, it is expected there will be no living coral reefs by 2030. This will obviously severely affect tourism in the Caribbean. Ocean acidification is already damaging marine eco-systems, which will mean a shortage of fish. Impacts on humans living in the region will be severe, Ms. Lovins pointed out. 2013 was the sixth consecutive year with weather-related damage of over US$10 billion in the U.S. The threat is more severe for the tropics; coastal activities will be curtailed and power stations on the coast will be affected. Ms. Lovins predicted Kingston “will lose its airport” due to sea level rise. On the social impact, Ms. Lovins referred to comments by the EU Head of Delegation in Jamaica Ms. Paola Amadei, who has noted: “Climate change is already exacerbating inequality.”

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Ms. Lovins referred to comments by Minister Pickersgill, estimating the huge cost of climate change to the tourism and fishing industries: “The biggest threat to our livelihoods and our sustainability as a country.” The Report of the UN Secretary General’s High-Level Panel on Global Sustainability, “Resilient People, Resilient Planet: A Future Worth Choosing” (January 2012) predicts that by 2030, the world will need 50% more food, 45% more energy and 30% more water. The 22-member panel called for a new low-carbon blueprint, which must be mainstreamed into economic policy as a matter of urgency. Ms. Lovins believes the possible global temperature rise of 2°C is “inevitable,” and a 6°C rise would be catastrophic. Several studies have shown that world’s governments must take action now to avert this: “In such a world [with a 6°C rise] demand for energy food and water will overwhelm the planet.” On Jamaica’s situation, Ms. Lovins pointed to Jamaica’s huge oil import bill. She suggested to continue spending billions of US$ importing oil is not sustainable and does not make sense. Currently Jamaica consumes 60,000 barrels of oil daily, 84% of its energy needs being crude oil imports. Its import bill is higher than its earnings (US$1.48 billion in first half of 2011). Usage is expected to double by 2027. 95% of its energy comes from fossil fuels. “By 2030 China will want all of the oil in the world,” she predicted, although China has made a major thrust towards solar power in recent years. China is now the largest global consumer of basic commodities such as oil, coal, steel and grain. If it does not change its current pattern, it will require 99 million barrels of oil daily – the world currently produces 80 million plus and will likely never produce more than current levels. The “Arab Spring” (which, ironically, stemmed from the suicide protest of a food vendor in Tunisia) and its subsequent events have steadily contributed to uncertainty in the Middle East, resulting in rising oil prices and increases in the cost of food. Grain stocks are now at dangerously low levels globally and there is currently a very small margin between grain production and consumption. World food prices are steadily moving up, with the possible impact of civil unrest. Against this background, Ms. Lovins declared: “Climate change is not about polar bears; it’s about business!” Ms. Lovins stressed that businesses need to go after energy savings, giving numerous examples of simple practices. Encourage behavior change in your business, she suggested. You can create “climate change wealth” in energy-efficient buildings; the cities of Chicago and New York have been at the forefront of this effort. She pointed to the noisy H-VAC system and inefficient lighting in the hotel meeting room as examples of energy-inefficient practices. Simply changing people’s behavior in the short term is likely to save at least 10%. PCs are major carbon emitters and turning them off at night will save millions. Ms. Lovins recommended a book by Jigar Shah, author of “Creating Climate Wealth,” which points to numerous strategies for energy efficiency, the “low

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hanging fruit” for businesses. Mr. Shah’s Climate Wealth Law posits that it will always be profitable for firms to eliminate 50% of their carbon emissions; they just need an effective business model and financial innovations. Ms. Lovins shared information on several other global innovators. She praised Sir Richard Branson (co-founder of the Carbon War Room with José Maria Figueres) and his support for the Gigaton Awards, established to reward businesses following carbon-reducing policies. By 2020 the planet must save 17 gigatons of carbon annually to stay below the 2° threshold. The cities of Chicago and New York have set goals to reduce carbon emissions from buildings (NY has close to one million buildings). Chicago has 300 solar and wind power supply companies and 18,000 related jobs. Retrofitting buildings in NY will create thousands of jobs and reduce carbon emissions, saving billions of dollars annually. Ms. Lovins pointed to other initiatives by forward-thinking companies and institutions: She referenced a Fast Company report on Ford car company (Ariel Schwartz, March 23, 2010); the Ohio State University Carbon Disclosure Project (built by power management firm Eaton Corporation); and Calera (which uses the same “system” as coral reefs to create limestone from carbon and make cement) among other “smart businesses that can create jobs.” Ms. Lovins offered several other examples of savings generated by reducing unnecessary lighting and other energy and cost-saving practices, citing figures for leading U.S. firms that are cutting emissions and saving billions. Savings can be generated in any firm, large or small, through lighting, heating and cooling systems, water, waste systems, transit and travel solutions: for example by installing LED lighting, reducing overhead lighting and using smart strips. Saving energy, she added, strengthens the entire economy. “Sustainability is happening, and it pays.” According to CDP reports, leading firms managing carbon emissions properly saw 1.6% higher growth and 5.2% higher returns on equity. Companies on the Dow Jones Sustainability Index outperform the general market. On renewable energy, Ms. Lovins cited Stanford University research predicting the U.S. (and the world) can meet 100% of its needs through renewable energy. Ms. Lovins noted the abundance of sun and wind in Jamaica. There is “so much energy all around us,” she exclaimed, adding that she cannot understand why Jamaica is spending billions on imported oil. She recommended an immediate transition to renewables. Although the initial investment might be considered high, she asserted, if this switch is not made Jamaica will pay even more for fuel in the future.

“Renewables are winning,” she noted (especially solar power) over other energy sources such as coal and nuclear power – and despite the huge subsidies to the oil industry. The cost of solar power is falling. China’s air pollution is dangerously high and they are switching to renewables, investing $2.4 billion. Japan is also investing heavily in renewables. Many countries are switching to renewable cars. Germany will be 100% renewables by 2050. It is simply good policy. Utility

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companies “will die” if they do not make the transition to renewables, she asserted. These companies are already losing billions in Europe. More than 70% of newly generated energy between now and 2030 will be from renewables. The world is now nearing almost 100GW of solar power. She gave the example of Butte College in the U.S., which could be the first college to generate more power than it uses. Feed-in tariffs are a policy mechanism designed to accelerate investment in renewable energy technologies, offering long-term contracts to renewable energy producers, based on the cost of generation of each technology. The tariffs drove Germany’s economic regeneration; savings exceeded the cost of householders’ payments. The tariffs allowed householders to produce, install and maintain their own renewable energy systems (Deutsche Bank report). The town of Dardesheim is 100% renewable. Bavaria has more installed solar capacity than the whole of the United States. She noted the difference between traditional energy distribution systems (directly from one source) and renewable energy (which can be generated from multiple locations and is more economical). She cited the example of Marin Clean Energy in California, which purchases renewable power, allowing citizens to utilize 2002 legislation to purchase power from their own preferred sources. This will save residents at least $240 million over the next twenty years. Ms. Lovins referred to a communications center invented by the CIA – packaged solar energy systems that can power a village. As far as Jamaica is concerned, Ms. Lovins pointed to a new hybrid wind/solar power installation (on the roof of the Myers, Fletcher & Gordon building in downtown Kingston), which is now the largest in the world. Ms. Lovins suggested Jamaica could make more use of wind power; 35% of new U.S. energy has come from wind (from 2007-2011). It is the second-fastest growing energy supply technology in the world and costs less than coal on good sites. Last October JPSCo offered customers a solar mill, a hybrid wind/solar device: in three sizes generating 40 kWh, 120 kWh and 230kWh. She gave the example of Beaver County in Utah, a rural community that has greatly benefited from wind power. First Wind supplied 45,000 homes, generating enough savings to rebuild a school. The installation created 250 new jobs and increased the tax base (these jobs pay more). Ms. Lovins also praised Diageo (which owns Red Stripe and Guinness) as “a true leader.” In 2008 the company set a goal of reducing its carbon emissions by 50%, through energy savings and the use of renewable energy and low carbon/no fossil fuels. Its CEO Richard Dunne achieved this in only four years (the solutions were “no-brainers,” Ms. Lovins commented) and has already achieved an 80% reduction, much earlier than expected! Another example is Harbec in Rochester, NY, a manufacturing firm that often suffered from power fluctuations due to bad weather etc. Harbec ecided to install wind power. When other factories had to shut down, it kept going through power cuts and storms. Its newest goal is to become “water neutral” by 2015.

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Other examples include Ikea, which is committed to being 100% renewably powered by 2020. CEO Steve Howard calls this the “new wave of industrial transformation” that will spur economic growth and deliver jobs. The British firm Marks & Spencer also committed to carbon neutrality and saved £105 million last year. The “Great Green Fleet” (U.S. Navy) runs helicopters and ships on about 50% biofuels (“home-grown” fuel derived from algae) and its jets fly on a mix of jet fuel and oil seed fuel. Concluding, Ms. Lovins quoted from a 2009 article in the Harvard Business Review: “Sustainability should be a touchstone for all innovation.” She expressed optimism that humans have the capacity to solve the problem of climate change, and reiterated that the private sector should be at the forefront. She lauded entrepreneurs – “the job creation engine” – asserting that small businesses are the ones who create jobs (startups generate the most new net jobs in the U.S.) “Green jobs” also pay better, she suggested. She noted these jobs are growing five times faster than jobs in any other industry in the U.S. In 2012 solar jobs increased by over 13%. She noted there are web-based learning tools for small businesses to go green, and said she could make these available for Jamaica, if requested. Changing the way Jamaicans do business to a “green” focus simply makes sense; it will put money in your pocket, create jobs and protect life on our planet for generations to come. Ms. Lovins stressed the importance of businesses working with governments, as there is strength in partnerships, but added: “Will the world’s governments save us? No. Business will!” Ms. Lovins also stressed the importance of personal responsibility and for each business to also accept responsibility and embrace sustainability. “Who’s responsible? I am. You are. Every one of us!” She closed with the quote: “We are called to be architects of the future: not its victims.” (Buckminster Fuller)

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Lt. Col. Oral Khan, Chief Technical Director, Ministry of Water, Land, Environment & Climate Change “Jamaica’s Climate Change Policy: Business Perspective” Lt. Col. Khan outlined key elements of the Ministry’s Climate Change Policy Framework and Action Plan, developed under the Climate Change Adaptation and Disaster Risk Reduction Project funded by the UN Environment Programme and the European Union. The Ministry held island-wide consultations and conducted a USAID-funded workshop to sensitize the public on the draft Policy Framework and Action Plan, which Cabinet approved as a Green Paper in October/November, 2013. It is available online and the Ministry is in the final stages of integrating comments and suggestions made during the public consultations. It is hoped that the public will participate more in the process as their input is taken into account. The need is great, Lt. Col. Khan noted, since climate change affects Jamaica’s economic and social wellbeing. The primary aim of the policy is to support the goals of Vision 2030 by reducing risk in all sectors. Key principles of the Policy include sustainable use of natural resources, transparency and accountability, public participation and a multi-sectoral approach. As an example of the severe effects of climate change, Lt. Col. Khan noted the impact of several storms on Jamaica’s economy since 2001, with Hurricane Ivan (2004) having the most negative effect on Jamaica’s GDP.

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The Policy Framework will recommend actions for each sector, which must then prepare its own specific action plan. The Ministry intends to mainstream climate change issues into each sector. Lt. Col. Khan expressed pleasure at seeing the private sector more engaged in the process than it had been previously, from the excellent attendance at the Learning Conference. Elements of the Policy Framework/Action Plan include climate projections for Jamaica; potential impacts on priority sectors (coastal and marine resources; freshwater resources; human settlements and infrastructure; agriculture; tourism; human health; energy). It also includes short, medium and long-term strategies for adaptation and mitigation, with emphasis on the former. Lt. Col. Khan reported that the Climate Change Advisory Committee set up two years ago is currently being restructured. There will be climate change focal points in all ministries, departments and agencies, and going down to the community level. The Vision 2030 Climatic Working Group will also be involved. Flagship Programmes will include Special Initiatives in these areas:

Water Resources Management (including watershed protection and scaling up of conservation strategies such as rainwater harvesting) Low Carbon Development – the scaling up of renewables and energy conservation (largely the purview of the Ministry of Energy) Disaster Risk Financing (to research and develop a system that will reduce the island’s financial vulnerability after climate change-related events, to consider micro-insurance and other methods) Eco-system Protection; Land Use Planning (including a National Spatial Plan and establishing regulations for Environmental Impact Assessments); Health and Marine Eco-systems (for which consultants will be hired); And communications and public education The Ministry hopes the private sector will come on board with any/all of the Flagship Programmes.

Lt. Col. Khan outlined the Policy Framework’s Vision and Specific Objectives. The latter include:

Mainstreaming climate change into each sector (as noted above) and capacity building for each sector to prepare its own action plan. These sectors will take ownership of their plan. Funding for some of these sector plans has been identified. Support for institutions involved in data collection in order to better inform policy and decision-making. A comprehensive communications program to ensure the general public is better informed.

Lt. Col. Khan again welcomed private sector support for any aspects of the plan, including the flagship programs, as well as for a conference scheduled for later this year.

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In the question and answer session, Barbara Walker of Mockingbird Hill Hotel asked about the plan to build a transshipment port in the Portland Bight Protected Area, dredging the marine environment and destroying large areas of mangrove forest; and reported plans to build a coal power plant there. She asked whether this did not conflict with the Ministry’s plans for eco-system protection (rehabilitation of mangroves)? Lt. Col. Khan responded that there must be a balance between environment and development; we must find a “happy medium.” However, he did not have enough information on the project to adequately address the question. Ms. Hunter Lovins responded that Jamaica has one of the best “brands” in the world. She said that if a country has a great product that is based on a healthy environment and it is eroding the environment that makes that brand unique, this is counter-productive. She disclosed that she had worked with Mockingbird Hill Hotel (an eco-friendly property) on sustainability strategies and gave an anecdote about sitting on their verandah watching a Doctor Bird feeding – an absolutely unique Jamaican experience that you can have nowhere else in the world. Ms. Lovins urged the Jamaican business community not to “fall for” traditional and outmoded concepts of economic development, but to think outside the box and operate sustainably. In the tourism sector, Jamaica is small and cannot compete globally on the “sun, sea and sand” model. Jamaica must protect what is “special” about it, and the best way is through sustainable eco-tourism.

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SESSION TWO: THE BOTTOM LINE Dennis Chung, Chief Executive Officer of the Private Sector Organization of Jamaica (PSOJ), chaired the session and introduced the speakers. He noted that the aim of the session was not just to discuss how to obtain financing for sustainability projects, but to look at how businesses can really take climate change on board. Finance and Investment for Climate Change Mitigation and Adaptation: Ms. Anaité Mills, Climate Change Consultant, Inter-American Development Bank (IDB), Jamaica Ms. Mills has just relocated from Washington, DC as the IDB’s first Climate Change Representative in Jamaica, demonstrating the Bank’s increased focus on the issue through its Climate Change and Sustainability Division. She stressed climate change as a “critical” issue, requiring timely and urgent action.

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The IDB is the largest provider of technical assistance loans and grants in the region through its Multilateral Investment Fund and other mechanisms, also providing assistance in the form of guarantees and equity. Its private sector clients include non-governmental organizations as well as micro, small and medium enterprises (MSMEs), large corporations and financial intermediaries (local and international financial institutions). In the area of climate change the IDB’s technical support for both public and private sectors is one of its greatest strengths. The Bank will also assist in scaling up investment in climate change projects, inviting other donors to participate; and in accessing international funds such as the Green Climate Fund. The IDB supports climate change projects such as Caribbean Carbon Neutral Tourism; design projects for climate-resilient buildings; planning, adaptation measures and finance in Jamaica; and wind and solar development programs. Ms. Mills noted the IDB is funding a “huge” solar power project in Barbados, observing that she is not clear why solar power is not being undertaken on a larger scale in Jamaica. The IDB is working on a Pilot Program for Climate Resilience (PPCR), funding countries’ efforts to integrate climate change into development planning (for example, agricultural practices/food security, water supply and sanitation infrastructure, monitoring/analyzing weather data and climate-resilient housing). ProAdapt (through the Bank’s Multilateral Investment Fund) works with MSMEs to enhance climate resilience, offering opportunities for green growth. In Jamaica it will work on financing water adaptation in the new urban housing sector. Compete Caribbean, another separate program, seeks to enhance sustainable growth and competitiveness. Ms. Mills concluded that private sector should know the IDB is “open for business” and that as the new Resident Climate Change Representative in Jamaica, she is willing to assist in any way she can. An Adaptation Program and Financing Mechanism for PPCR Jamaica will begin next year. The main objectives are to enhance the generation and distribution of climate change adaptation information; to establish financial mechanisms to support climate resilience; and knowledge management.

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Mr. Edison Galbraith, General Manager, Loan Origination and Portfolio Management, Development Bank of Jamaica Limited (DBJ) “Financing Energy Efficiency” The DBJ is 100% government-owned; the Bank channels funding to the private sector. The value of energy loans disbursed by the Development Bank of Jamaica (DBJ) jumped from under J$200 million in 2012 to around J$650 million in 2013 and again in 2014. Since 2009 the DBJ has financed J$1.6 billion worth of energy loans (196 projects). In the financial year ending March 2014 it approved J$658 million for 102 projects. The DBJ disburses loans to all types of businesses (large and small) and to individual householders. Energy loans incorporated the use of solar, photo-voltaic systems, wind turbines and bio-digesters in a range of sectors, including manufacturing, tourism, agro-business, retail stores, contact centers and offices. Mr. Galbraith noted, however, that businesses are still reluctant to take up loans; there is a level of “inertia.” Interest rates are from 9.5 – 10% (in J$) and 7.25% (in US$) for businesses for up to seven years, primarily through approved financial institutions, in specific sectors. Rates are 9.5% for up to eight years for individual householders; Mr. Galbraith noted considerable interest from these customers. The DBJ also provides loans to large projects in strategic sectors such as ICT and renewable energy and promotes micro-finance by lending through micro-finance institutions. Mr. Galbraith recommends energy audits for businesses and households; to date, more than thirty certified energy auditors have been accredited. The DBJ has “free money” available to offset J$200,000 of the cost of energy audits. Mr. Galbraith said he was “disappointed” at the uptake on the energy audit facility. The Jamaican Government’s Renewable Energy Policy aims to have 30% renewables in the energy mix and a 70% diversification in energy supply by 2030. The objective is to reduce the cost of electricity from the current over US$0.40 per kWh through more efficient generation, increasing generation capacity, off-grid self-generation (e.g. in the bauxite industry) and energy conservation measures.

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Mr. Galbraith noted high energy costs affect all sectors of the economy, with major implications for GDP growth. The DBJ believes a combination of capacity-building, public education, more available credit and incentives will reap positive results. Mr. Galbraith urged financial institutions not to “just see customers as cash” but to get more involved in lending for development, especially in the energy sector. Dennis Chung suggested that small businesses in particular complain at excessive bureaucracy in accessing loans from the DBJ. Mr. Galbraith responded that some loans are processed very quickly. There is currently a turnaround time of between five days and one month for loan approvals. An audience member requested more information on the energy auditors? Mr. Galbraith said the Jamaica Society for Energy Engineers conduct the training of energy auditors at the University of Technology. A representative of the European Union observed that the Jamaica Public Service Company (JPS) license issued in 2001 and renewed in 2007 has created a monopoly situation, which is now hampering renewable energy development. Jamaica’s regulatory environment does not encourage innovation in the energy sector. He asked whether the private sector is lobbying the Government for an alteration to the license? Dennis Chung said the private sector acknowledges these challenges. Discussions with the Government have been ongoing for some time. An audience member asked whether the IDB attaches conditions related to climate change resilience for all loan approvals? Ms. Mills responded that the IDB is currently looking at this possibility. Benefits to the Business Bottom Line: Ms. Barbara Walker, Co-owner, Hotel Mockingbird Hill Quote: “It is not a question of the economy vs. the environment. There is no economy without the environment.”

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Ms. Walker and her partner operate a small eco-boutique hotel, a restaurant and an eco-tour business in rural Portland, Jamaica, as well as offering consulting services. Ms. Walker noted that energy issues are affecting all businesses, large and small; but business must lead the change. She added: “Climate change is the defining issue of our generation.” She pointed out that solar panels now cost roughly half what they did in 2008 (US$0.70 per watt). She also referred to Renewables International and Bloomberg reports on the use of renewables in Germany (up to 75%). For a business like Mockingbird Hill, small, simple changes make a big difference – and they make good business. For example, “passive design” rooms with good ventilation and insulation reduce the need for air conditioning and fans. They paid attention to detail (for example, laundry times) and changed to energy-efficient lighting. Ms. Walker stressed: “If you are not measuring, you are not managing.” Businesses must measure energy usage on a daily basis to determine the level of savings and to ensure they are on a sustainable path. Mockingbird Hill’s business incorporates several sustainable “best practices”:

minimizing waste through re-use and recycling; energy efficiency, conservation and management; management of fresh water and wastewater; land use planning and management; developing partnerships for sustainable development; an environmentally sensitive purchasing policy; community support and public education (an important component).

Ms. Walker pointed out the many benefits of running a sustainable small business. Apart from knowing that it is operating on a sustainable, ethical basis, she points out that their guests - and “green tourists” in general - have plenty of money to spend. They will spend it if they believe they are getting good value. Eco-tourism is good business, and it is for the common good as well as making business sense.

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Mr. Jürg Blaser, Country Manager, Nestlé Jamaica Creating Shared Value and Providing Climate Change Leadership Mr. Blaser provided an overview of Nestlé, which is a huge multinational business. Nestlé’s “Shared Values” philosophy is: “For a company to be successful over time and create value for shareholders, it must also create value for society.” Nestlé has a policy document: “The Nestlé Policy on Environmental Sustainability,” setting out its strategies and goals for reducing emissions and combating climate change. One of the issues it has addressed in order to become more sustainable and eco-friendly is reducing waste. Nestlé has redesigned its packaging – simpler, lighter – to reduce waste and also transportation costs, leading to reduced emissions. It is also concerned about food waste and is partnering with the UN Environment Programme and other organizations to avoid over-production and educate consumers on correct portions, food preparation etc. It supports suppliers, farmers in efforts to reduce waste, most of which happens before the production/consumption stage. Nestlé now has 61 factories with zero waste. Energy efficiency, emissions reduction and the use of renewable energy are high on Nestlé’s priority list. Mr. Blaser gave several examples of this policy: for example, the company has replaced 93% of its industrial refrigerants with carbon neutral equipment. 22 Nescafé factories use coffee grounds for renewable energy. Nestlé Mexico meets 85% of its energy needs through renewables. Nestlé now gets Oxfam’s highest score for climate change resilience, which is quite an achievement. Mr. Blaser stressed the importance of a business gaining the trust of consumers. Many of Nestlé’s customers want to know that products are sustainably harvested

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and processed, that human rights have been respected (no child labour, etc) and so on. Buy-in from the consumer is key for businesses that want to instill climate-friendly practices. Therefore, educating consumers on the processes (right the way through the supply chain) is very important. If consumers are not aware of the importance of particular sustainable practices, the business must educate them and include them in the discussion. Mr. Vaughn Morris, Managing Director, SEAL Sprayed Solutions Ltd., Jamaica Quote: “It only makes sense to encourage energy conservation as a matter of practice and policy.” SEAL is a private limited liability company specializing in the production of spray polyurethane foam to protect, waterproof and cool roofs, providing insulation. Established in 2002, SEAL arose from the need for a good roof at another business in which Morris was involved. The firm now has fifty employees and an affiliate in Trinidad. While producing energy-saving materials, SEAL uses best practices in its production systems, including waste management and the importation of non-ozone depleting raw materials. It has reduced electricity bills in its office by using energy-saving lighting and insulation. Mr. Vaughn welcomed the Jamaican Government’s move to make energy-saving products such as theirs GCT and import duty exempt. However, the Government has recently imposed 16.5% GCT on raw materials used to manufacture polyurethane insulation. This is a cost they have to pass on to the consumer as they cannot claim it back. The price of its products has therefore gone up. Mr. Morris noted in the U.S., Canada and other countries insulation of buildings is mandatory. However, the U.S. (US$0.12 – 0.15 per kWh) and Canada (US$0.10 – 0.12 per kWh) have much lower electricity costs than Jamaica. These countries also offer incentives and rebates to businesses employing energy-saving practices. Mr. Morris expressed the fervent hope that the Jamaican Government will make it easier and cheaper for manufacturers and consumers to produce and purchase energy-saving devices.

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Speakers and the audience made the following comments during the discussion session: Mr. Morris says he has seen a major drop in sales of his key product due to the cost, spurred by the recent imposition of GCT resulting in a 16.5% price increase, and the deteriorating value of the Jamaican Dollar. Several participants suggested Ms. Lovins’ presentation be sent to all policy-makers and government departments. They called it a “wake up call” to the Jamaican Government. All participants agreed the private sector has to be the engine of change. They asserted that the focus has to be on the next two years. The time is now. One suggested that businesses start with the “low-hanging fruit” in sustainability efforts. Mockingbird Hill would like to expand energy production through energy saving but cannot sell it back to the grid (the technology is not there to store it) so it makes no sense to produce more than they need. Mr. Blaser reiterated Nestlé’s plans to continue increasing consumer awareness, educating them towards climate-friendly behaviors. An audience member suggested that both the IDB and DBJ need to step up the marketing and promotion of the financial assistance that is available, as many in the private sector are not aware of what they can access now. The Scientific Research Council (SRC), the Caribbean Climate Innovation Center and the World Bank can provide funding and technical support to develop innovative businesses and solutions towards climate change.

One participant suggested that the list of commodities receiving subsidies should be reviewed; only those that contribute to long-term growth and sustainability should receive incentives and subsidies. New taxes should be non-discriminatory; there must be a level playing field. An audience member asked about coal as an energy solution, and its impact. Hunter Lovins said, “coal does not have a future.” It costs US$0.20 per kWh if it includes carbon capture, and US$0.10 without it. The Jamaican Government is seeking private sector support for a pilot project it is working on that will offer climate change financing at lower interest rates, through the DBJ. The Government is also fully aware that public education is key; it also seeks private sector support to help get climate change messages out. The Way Forward: Dr. Elsie Laurence-Chounoune, Deputy Resident Representative, UNDP Jamaica

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The impact of climate change on society and on business has been clearly outlined and emphasizes the urgent need for a change in approach and for concrete actions. Minister Pickersgill also wants businesses to “wise up” and is keen to establish stronger partnerships with and among private sector players. Dr. Chounoune recommended that local businesses keep the following in mind:

Accountability: Taking responsibility for the planet, using your influence to build climate change resilience, educating and raising awareness, creating a better quality of life for fellow citizens and for the future. Advocacy/Lobbying: Businesses can lobby for change, both locally and regionally – on legislation and law enforcement that will encourage climate change resilience, for example. Action: Create partnerships with the Government; keep climate change discussions on the front burner; think long-term; seize funding opportunities for climate-friendly projects and for new green business and green job creation.

Dr. Chounoune stressed that the time to act is now! The UNDP stands ready to provide support. The UNDP also proposes the creation of a local chapter of the United Nations Global Compact in Jamaica. The Global Compact is a set of guiding universal principles for business, covering human rights, environmental principles including climate resilience, labor and anti-corruption. RELEVANT WEBSITES: http://www.calera.com Calera http://www.carbonwarroom.com Carbon War Room https://www.cdp.net/en-US/Pages/HomePage.aspx CDP: Driving Sustainable Economies http://www.caribbeancic.org Climate Change Innovation Center http://www.dbankjm.com/front Development Bank of Jamaica http://www.diageo.com/en-row/CSR/Pages/default.aspx Diageo: Sustainability and Responsibility

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http://www.fastcompany.com Fast Company: Business + Innovation http://www.firstwind.com First Wind http://www.greenbiz.com/topic/gigaton-awards Gigaton Awards/Greenbiz.com http://www.greenbiz.com Greenbiz http://www.gcfund.org Green Climate Fund http://www.harbec.om Harbec: Technical Innovation with Environmental Responsibility http://www.hotelmockingbirdhill.com Hotel Mockingbird Hill http://www.iadb.org/en/countries/jamaica/jamaica-and-the-idb,1051.html Inter-American Development Bank Jamaica http://www.mwh.gov.jm Ministry of Water, Land, Environment and Climate Change, Jamaica http://www.mwh.gov.jm/index.php/focus-areas/climate-change/draft-policy-framework Draft Climate Change Policy Framework and Action Plan (Green Paper) http://natcapsolutions.org Natural Capitalism Solutions, Colorado http://www.nestle.com/csv Nestlé: Creating Shared Value http://www.psoj.org Private Sector Organisation of Jamaica http://www.renewablesinternational.net Renewables International http://www.src.gov.jm Scientific Research Council, Jamaica http://www.sealsprayed.com SEAL Sprayed Solutions Ltd. http://unsdsn.org Sustainable Development Solutions Network http://riskybusiness.org The Risky Business Report http://www.un.org/climatechange/summit/ UN Climate Summit 2014: September 23, New York http://www.sidsnet.org UN Conference on Small Island Developing States: September 1-4, Apia, Samoa http://www.unglobalcompact.org UN Global Compact http://www.jm.undp.org/content/jamaica/en/home.html United Nations Development Programme in Jamaica

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http://uscib.org/docs/GSPReportOverview_A4%20size.pdf Report of the UN Secretary General’s High-Level Panel on Global Sustainability: “Resilient People, Resilient Planet: A Future Worth Choosing” (January 2012) Articles: Ford Saves One Million Dollars...By Shutting Off Computers. ARIEL SCHWARTZTue Mar 23, 2010 http://www.fastcompany.com/1595298/ford-saves-one-million-dollarsby-shutting-off-computers?partner=homepage_newsletter Study in Nature Reveals Urgent New Time Frame for Climate Change http://www.hawaii.edu/news/wp-content/uploads/2013/10/nature-mora.pdf Study shows turning off computer at night saves energy, big bucks Julie Morrison | Flint Journal April 13, 2009, 2:53PM http://www.mlive.com/news/flint/index.ssf/2009/04/study_shows_turning_off_comput.html The Inside Story of Diageo’s Stunning Carbon Achievement – Harvard Business Review: http://blogs.hbr.org/2013/02/the-inside-story-of-diageos-st/ Taking Action on 15 Years of Eco-Opportunities: Harbec Blog http://blog.harbec.com/wp-content/uploads/2014/04/HarbecTimeline11.jpg Why Sustainability is Now the Key Driver of Innovation: Harvard Business Review http://hbr.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation/ COMPILED BY EMMA LEWIS, JULY 25, 2014.