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Paying for Climate Resiliency in Buildings Offers Big Financial Benefits in the Caribbean, Study Finds

  • New guide identifies practicable construction measures to take climate-adaptive and resilient action.


Given the impacts of floods, hurricanes, droughts, and extreme heat, individuals and businesses should consider resiliency investments in residential and commercial buildings in Barbados, Jamaica, and Trinidad and Tobago, with potential average returns of 30x the cost of investment over five years, a new study based on climate models finds.


According to the CEAC Solutions, IDB, and IDB Invest study Interventions to Increase Climate Resilient Investments in Barbados, Jamaica, and Trinidad and Tobago”, incorporating specific resiliency measures, such as roof clips and ties for wind, and solar shades for heat, which on average add 1.5% to construction costs, will at a minimum pay off for itself given the expected return on investments (ROI) of up to 21x in the case of residential buildings and 31x for small and medium enterprises (SMEs). 


After reviewing and analyzing climate information, damage history, and risk assessments, with prioritization based on a combination of individuals affected and average annual losses (AAL), the research identifies practical measures for new and existing residential, commercial, and industrial buildings, quantifying the added costs of their implementation.


According to the study, hurricane wind annualized losses have been the most expensive, averaging US$215 million, followed by flooding with up to $20 million in annualized losses. Droughts were estimated to cost about US$500,000 per year.


In addition, energy consumption from increased cooling costs was estimated to cost US$1.4 million, US$8.7 million, and US$1.9 million per year for Barbados, Jamaica, and Trinidad, respectively.


Measures for flooding include elevating structures, permanent flood barriers and doors, stormwater retention and infiltration basins, and rainwater harvesting. For wind, measures include roof clips and ties, roof anchorage to the wall and impact-resistant doors. For drought, these include onsite water storage tanks, low flow faucets and rainwater harvesting. For heat, measures include solar shades, thermal radiant roof barriers, cooling of internal spaces, and green roofs.


Considering that climate events are predicted to become more extreme and frequent and that reinsurance in the region has diminished, the publication also highlights that awareness of climate-resilient construction is necessary, along with a partnership with financial institutions to finance it.


Given the ROIs identified for each of the resiliency measures, the study recommends focusing on awareness about the financial benefits of resiliency among project developers and the public as well as innovative lending arrangements that are designed to increase uptake.


The study has a longer technical version (see here) and a short one designed specifically for developers (see here).


About IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public- and private-sector clients throughout the region. Take our virtual tour.


About IDB Invest

IDB Invest, a member of the Inter-American Development Bank Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $21 billion in assets under management and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.


CEAC Solutions

CEAC Solutions was conceptualized over twenty years ago when a handful of young Jamaicans began discussing their dreams of establishing a leading engineering firm driven by a passion for excellence. Since then, over 40 persons and several Associates have joined the CEAC team. In 2015, CEAC Outsourcing Company Limited was formed, a game changer for the industry, more than doubling our workforce, and furthering our status as one of the region’s top engineering design firms. CEAC provides excellence, global knowledge, and a local context in delivering creative solutions that meet the needs of our clients.