The Caribbean and Climate Change: The Costs of Inaction - iied iied

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Saint Kitts & Nevis. 35.5. 89.3. Saint Lucia. 24.3. 49.1. Saint Vincent & the Grenadines. 23.6. 47.2. Trinidad & Tobago. 8.0. 16.0. Turks & Caicos. 37.9. 75.9.
The Caribbean and Climate Change: The Costs of Inaction Ramón Bueno

Stockholm Environment Institute-U.S. www.sei-us.org www.sei-us.org/climate-and-energy/climate-economics.html

Climate Change: From the Science to Action • Scientific consensus on climate change • The debate now is about the economic analysis • Wide range of economic models – Uncertainty, catastrophic risks, – Discount factors, growth rates, technology

Need for Climate Action • Some say acting now will be costly • Climate inaction will be even more costly • Global trends and pressures – World’s 6 billion people: 9B by 2100 – Right to development

Caribbean Vulnerability Challenges:

ƒEcological ƒSocial ƒEconomic ƒSecurity ƒFood ƒEnergy ƒInfrastructure losses and coastal erosion ƒTourism loss ƒGreater hurricane, storm surge damages ƒSalt water intrusions into fresh-water aquifers ƒAgriculture and ecosystems losses ƒImpaired health (flooding, sanitation, diseases, heat stress)

Caribbean Costs of Inaction “For just these three categories— increased hurricane damages, loss of tourism revenue, and infrastructure damages—the Caribbean’s annual cost of inaction is projected to total $22 billion annually by 2050 and $46 billion by 2100. These costs represent 10 percent and 22 percent, respectively, of the current Caribbean economy.“

Action vs. Inaction Scenarios 2050

2100

Annual Average Temperature Increase (in degrees above year 2000 temperature) Low-Impact

High-Impact

F

1.1

2.2

C

0.6

1.2

F

4.9

9.7

C

2.7

5.4

in

3.5

7.1

cm

8.9

18.0

in

22.6

45.3

cm

57.4

115.1

Sea-Level Rise (above year 2000 elevation) Low-Impact

High-Impact

Climate Change Scenarios Total Caribbean

Climate Change Scenarios: $US Billions

(billions of 2007 dollars; percentages based on 2004 GDP)

LOWIMPACT Storms Tourism Infrastructure Total % Current GDP

HIGHIMPACT Storms Tourism Infrastructure Total % Current GDP

2050

2100

2.0 0.8 2.9

2.1 1.6 5.9

$5.7 2.7%

$9.6 4.5%

2050

2100

4.7 4.0 18.9

10.0 8.0 37.8

$27.6 13.0%

$55.8 26.3%

Caribbean Cost of Inaction: Total Caribbean

Cost of Inaction ($US Billions)

(billions of 2007 dollars; percentages based on 2004 GDP)

2050

2100

Storms

2.8

7.9

Tourism

3.2

6.4

15.9

31.9

$21.9

$46.2

10.3%

21.7%

Infrastructure

Summary: Costs of Inaction in billions of 2007 dollars as percent of Caribbean GDP

Cost of Inaction by Island Cost-of-Inaction: % of 2004 GDP 2050 Anguilla Antigua & Barbuda Aruba Bahamas Barbados British Virgin Islands Cayman Islands Cuba Dominica Dominican Republic Grenada Guadeloupe Haiti Jamaica Martinique Montserrat Netherlands Antilles Puerto Rico Saint Kitts & Nevis Saint Lucia Saint Vincent & the Grenadines Trinidad & Tobago Turks & Caicos U.S. Virgin Islands TOTAL CARIBBEAN

2100

20.7 25.8 10.1 13.9 13.9 9.0 20.1 12.5 34.3 19.6 46.2 4.6 61.2 27.9 3.8 21.7 16.1 2.8 35.5 24.3 23.6 8.0 37.9 14.2

41.4 58.4 20.1 31.7 27.7 18.1 53.4 26.8 77.3 40.3 111.5 9.5 123.2 56.9 8.1 49.5 36.0 6.0 89.3 49.1 47.2 16.0 75.9 32.4

10.3%

21.7%

Caribbean Cost of Inaction ‐‐ by % Total Impact in 2100 (millions of 2007 dollars; percentages based on 2004 GDP)

 GDP

 Storms

% of GDP  Tourism  Infrastr.

 Total

Haiti Grenada Saint Kitts & Nevis Dominica Turks & Caicos Antigua & Barbuda Jamaica Cayman Islands Montserrat Saint Lucia Saint Vincent & the Grenadines Anguilla Dominican Republic Netherlands Antilles U.S. Virgin Islands Bahamas Barbados Cuba Aruba British Virgin Islands Trinidad & Tobago Guadeloupe Martinique Puerto Rico

$            4,378 $               391 $               359 $               249 $               181 $               750 $            8,773 $            2,204 $                  34 $               699 $               371 $               120 $          20,519 $            2,705 $            3,104 $            5,786 $            2,538 $          38,065 $            2,347 $               967 $          12,610 $            8,623 $            9,896 $          86,726

2.4% 63.0% 60.5% 28.8% 0.0% 22.7% 3.3% 43.7% 20.2% 1.6% 0.0% 0.0% 4.0% 12.6% 13.3% 12.9% 0.1% 5.8% 0.0% 0.4% 0.0% 1.2% 1.4% 1.2%

0.8% 7.8% 8.5% 5.0% 52.3% 16.4% 6.8% 6.3% 8.0% 12.1% 9.5% 25.5% 5.6% 11.0% 13.6% 10.8% 11.0% 2.0% 13.8% 14.2% 1.0% 0.6% 0.7% 1.1%

120.0% 40.7% 20.3% 43.5% 23.6% 19.3% 46.8% 3.5% 21.3% 35.4% 37.7% 15.9% 30.8% 12.5% 5.5% 7.9% 16.6% 19.1% 6.3% 3.4% 15.0% 7.7% 6.0% 3.7%

123.2% 111.5% 89.3% 77.3% 75.9% 58.4% 56.9% 53.4% 49.5% 49.1% 47.2% 41.4% 40.3% 36.0% 32.4% 31.7% 27.7% 26.8% 20.1% 18.1% 16.0% 9.5% 8.1% 6.0%

TOTAL CARIBBEAN

$       212,397

3.7%

3.0%

15.0%

21.7%

 Storms            107            247            217              72                 ‐            170            292            963                7              11                 ‐                0            814            341            414            748                1         2,197                 ‐                4                0            101            137         1,055

$ Million  Tourism  Infrastr.              36              31              31              12              95            123            593            138                3              85              35              31         1,144            296            422            627            280            761            323            138            127              52              67            970

Total

         5,252              159                73              108                43              145          4,106                76                  7              247              140                19          6,318              338              170              458              422          7,256              149                33          1,892              667              596          3,202

$       5,394 $           436 $           321 $           193 $           137 $           438 $       4,991 $       1,178 $             17 $           343 $           175 $             50 $       8,276 $           975 $       1,005 $       1,833 $           704 $     10,214 $           472 $           175 $       2,020 $           820 $           800 $       5,227

$     7,899 $     6,418 $     31,876

$     46,193

Caribbean Cost of Inaction ‐‐ by % Tourism Impact in 2100 (millions of 2007 dollars; percentages based on 2004 GDP)

GDP Turks & Caicos Anguilla Antigua & Barbuda British Virgin Islands Aruba U.S. Virgin Islands Saint Lucia Barbados Netherlands Antilles Bahamas Saint Vincent & the Grenadines Saint Kitts & Nevis Montserrat Grenada Jamaica Cayman Islands Dominican Republic Dominica Cuba Puerto Rico Trinidad & Tobago Haiti Martinique Guadeloupe TOTAL CARIBBEAN

$               181 $               120 $               750 $               967 $            2,347 $            3,104 $               699 $            2,538 $            2,705 $            5,786 $               371 $               359 $                  34 $               391 $            8,773 $            2,204 $          20,519 $               249 $          38,065 $          86,726 $          12,610 $            4,378 $            9,896 $            8,623 $                     ‐ $       212,397

 Storms

% of GDP  Tourism  Infrastr.

 Total

0.0% 0.0% 22.7% 0.4% 0.0% 13.3% 1.6% 0.1% 12.6% 12.9% 0.0% 60.5% 20.2% 63.0% 3.3% 43.7% 4.0% 28.8% 5.8% 1.2% 0.0% 2.4% 1.4% 1.2%

52.3% 25.5% 16.4% 14.2% 13.8% 13.6% 12.1% 11.0% 11.0% 10.8% 9.5% 8.5% 8.0% 7.8% 6.8% 6.3% 5.6% 5.0% 2.0% 1.1% 1.0% 0.8% 0.7% 0.6%

23.6% 15.9% 19.3% 3.4% 6.3% 5.5% 35.4% 16.6% 12.5% 7.9% 37.7% 20.3% 21.3% 40.7% 46.8% 3.5% 30.8% 43.5% 19.1% 3.7% 15.0% 120.0% 6.0% 7.7%

75.9% 41.4% 58.4% 18.1% 20.1% 32.4% 49.1% 27.7% 36.0% 31.7% 47.2% 89.3% 49.5% 111.5% 56.9% 53.4% 40.3% 77.3% 26.8% 6.0% 16.0% 123.2% 8.1% 9.5%

3.7%

3.0%

15.0%

21.7%

 Storms                 ‐                0            170                4                 ‐            414              11                1            341            748                 ‐            217                7            247            292            963            814              72         2,197         1,055                0            107            137            101

$ Million  Tourism  Infrastr.              95              31            123            138            323            422              85            280            296            627              35              31                3              31            593            138         1,144              12            761            970            127              36              67              52

Total

               43                19              145                33              149              170              247              422              338              458              140                73                  7              159          4,106                76          6,318              108          7,256          3,202          1,892          5,252              596              667

$           137 $             50 $           438 $           175 $           472 $       1,005 $           343 $           704 $           975 $       1,833 $           175 $           321 $             17 $           436 $       4,991 $       1,178 $       8,276 $           193 $     10,214 $       5,227 $       2,020 $       5,394 $           800 $           820

$     7,899 $     6,418 $     31,876

$     46,193

Costs of Inaction: Florida, USA “For just these four categories — loss of tourism revenue, increased hurricane damages, at-risk residential real estate, and increased electricity costs — the annual costs of inaction are projected to total $92 billion by 2050 and $345 billion by 2100, figures that respectively would constitute 2.8 percent and 5.0 percent of the state’s projected Gross State Product “ - Stanton and Ackerman, November 2007

For the United States the cost of climate inaction in four cost categories – increased hurricane damages, residential real estate losses due to sea level rise, increased energy costs, and water supply costs – will add up to $1.6 trillion (in today’s dollars), more 1.5 percent, of U.S. output per year by 2100. -Ackerman and Stanton, May 2008

Cost of Inaction in Perspective Costs of Inaction * 2050

2100

Percent of United States GDP

1.20%

1.55%

Percent of Florida GSP

2.8%

5.0%

Percent of Caribbean GDP **

10.3%

21.7%

* Not an exact accounting of similar categories of losses and damages ** Based partly on a different methodology

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Stockholm Environment Institute • • • • • • •

Independent international research organization working on sustainable development. HQ in Stockholm, Sweden with centers in the US, UK, Estonia, and Thailand. Applied scientific research: bringing science to policy makers. 170 staff (25 in the U.S.). Funders: Swedish and US Governments, UNDP, UNEP, UNFCCC, foundations, national & local governments and NGOs US Center of SEI is an independent non-profit research institute affiliated with Tufts University in Massachusetts. Web sites: www.sei-us.org and www.sei.se