Resilience Amidst Rising Tides

An Issue Paper on Trade, Climate Change and Competitiveness in the Tourism Sector in the Caribbean

by Keron Niles

Issue Paper 9

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The Caribbean is the most tourism-dependent region in the world. The sector is the greatest contributor of employment and Gross Domestic Product throughout most of the islands that comprise the archipelago. For these nations, tourism provides a source of foreign exchange and helps to stimulate other areas of the economy. The high dependence of the Caribbean on the tourism sector makes these economies vulnerable to potential external shocks. Not only are these Small Island Developing States overly reliant on the income earned by the sector, but also on travellers from a limited number of countries (Unites States, the European Union and Canada). Thus, in order to safeguard the short and long term viability of this sector, Caribbean nations must delve into opportunities to encourage greater intra-regional travel, boost the demand for domestic vacations, seek for new tourism markets and develop alternative tourism products so as to mitigate or eliminate threats that can adversely affect the international competitiveness of the tourism sector.

Climate change forecasts suggest that the Caribbean is particularly vulnerable to the impact of global warming. Tourism and other key economic sectors such as fisheries and agriculture will be major impact-takers under climate change. To make those economies more resilient to climate change impacts and other exogenous shocks both mitigation and adaptation measures will have to be pursued in the tourism sector. Mitigation actions could reduce energy consumption by improving energy efficiency, increasing the use of renewable energy, and implementing carbon-offsetting strategies. Moreover, given the great interest and increasing demand for sustainable and eco-tourism, new business opportunities could emerge.

The present Issue Paper “Resilience Amidst Rising Tides” by Keron Niles, a Research Consultant, aims to deepen our understanding of the key mitigation and adaptation challenges the tourism sector faces in the Caribbean. Moreover, the study explores the issues at the interface of trade, climate change, and sustainable development of concern and interests to Caribbean countries, with a focus on the competitiveness of the tourism sector. Indeed, trade policy has an important role to play in this context. Niles argues that through the potential liberalisation of environmental goods and services (EGS), a few climate friendly technologies could be made available to decrease the Caribbean’s collective carbon footprint. Moreover, environmental services geared to reduce climate change vulnerability and foster resilience could be both imported and exported at the regional and international level.

Ultimately, the purpose of this paper is to foster an informed discussion among governments, private sector and civil society in order to search for plausible ways to address adaptation and mitigation challenges in the tourism sector and build resilience in the Caribbean.

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