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The Economics of Climate Change in the Pacific

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The Economics of Climate Change in the Pacific The Economics of Climate Change in the Pacific The Pacific developing member countries of the Asian Development Bank are highly vulnerable to the predicted effects of climate change, including higher sea levels, intense storm surges and cyclones, erratic rainfall patterns, and major temperature fluctuations. This study identifies the effects and quantifies the costs of these adverse outcomes to the Pacific island economies, with details provided for selected key sectors including agriculture, fisheries, tourism, coral reefs, and human health. It then presents policy recommendations and action steps for the countries to minimize or mitigate these impacts, particularly by mainstreaming climate change in their development plans, adopting forward-looking and risk-based approaches to climate change, and climate-proofing both their programs and infrastructure so that poverty eradication and sustainable development efforts can continue regardless of the vagaries of climate. About the Asian Development Bank THE ECONOMICS OF CLIMATE CHANGE ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. IN THE PACIFIC Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Printed on recycled paper Printed in the Philippines THE ECONOMICS OF CLIMATE CHANGE IN THE PACIFIC © 2013 Asian Development Bank All rights reserved. Published in 2013. Printed in the Philippines ISBN 978-92-9254-318-1 (Print), 978-92-9254-319-8 (PDF), 978-92-9254-328-0 (CD-ROM) Publication Stock No. RPT136119-2 Cataloging-In-Publication Data Asian Development Bank. The economics of climate change in the Pacific Mandaluyong City, Philippines: Asian Development Bank, 2013. 1. Climate change 2. Economics 3. Pacific egionr I. Asian Development Bank The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Note: In this publication, “$” refers to US dollars. 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Public Information Center Fax +63 2 636 2584 [email protected] Printed on recycled paper Contents Tables, Figures, and Boxes v Abbreviations vii Foreword viii Acknowledgments ix Executive Summary x Chapter 1 Introduction 1 Chapter 2 Vulnerability of the Pacific Nations to Climate Change 3 I. Overview of Geographic and Environmental Features 4 II. Demographic and Economic Factors 5 III. Vulnerabilities to Specific Aspects of Climate Change 8 Chapter 3 Framework and Methodology 13 I. Study Framework and Modeling 13 II. Methodology and Key Assumptions 14 A. Emissions Scenarios 14 B. Component 1: Climate Modeling 16 C. Component 2: Sector Impact Assessment 17 D. Component 3: Economic Assessment 19 III. Caveats and Limitations 21 Chapter 4 Climate Scenarios for the Pacific 25 I. Temperature 25 II. The El Niño-Southern Oscillation 28 III. ENSO Rainfall 31 A. Fiji 31 B. Papua New Guinea 31 C. Samoa 31 D. Solomon Islands 36 E. Timor-Leste 38 F. Vanuatu 38 IV. Extreme weather Events 38 A. Fiji 39 B. Papua New Guinea 39 C. Samoa 43 D. Solomon Islands 43 E. Timor-Leste 43 F. Vanuatu 43 V. Cyclone Risk 47 VI. Sea-Level Rise 48 iv Contents Chapter 5 Sectoral Implications of Climate Change in the Pacific 51 I. Agriculture 51 A. Effects of Climate Change on Selected Crop Production 52 B. Evidence for Other Crops 54 C. Effects of Climate Change on Livestock Production 55 II. Marine and Coastal Impacts of Climate Change in the Pacific 55 A. Characteristics of the Marine Economy 55 B. Fisheries 56 III. Tourism 59 IV. Decline in Coral Reefs 61 V. Health 63 A. Climate change Effects on Health 63 B. Estimated Impacts of Climate Change on Health in the Pacific 64 Chapter 6 Economic Implications of Climate Change in the Pacific 69 I. Climate Scenarios in FUND3.6 and PAGE09 69 II. Regional Economic Impacts of Climate Change 72 III. Sectoral Composition of Total Economic Impact 73 IV. Country-level Cost of Climate Change 74 V. Preparing for Catastrophic Risk 74 VI. Economics of Adaptation in the Pacific 76 Chapter 7 Summary and Policy Implications 79 I. Summary of Findings 79 II. Policy Implications 80 TABLES, FIGURES, AND BOXES Tables 2.1 Geographic and Topographic Profiles of Pacific Countries 4 2.2 Share of Pacific Economies Dependent on Natural Resources 6 2.3 Key Activiaties in Economic Sectors of the Pacific Region 7 2.4 Area of Agricultural Land in the Pacific Countries, 2011 7 3.1 List of GCMs Used in the Analysis 18 4.1 Selected Disaster Statistics for Countries of the Pacific, 1950–2012 38 4.2 Losses from Different Types of Natural Disasters in the Pacific, 1950–2004 39 4.3 Changes in Expected Frequencies of Cyclones in Basins of the Pacific, 2011 47 4.4 Estimates of Sea-Level Rise Relative to 2010 (meters) 48 4.5 Estimates of Land Area Inundated Relative to 2010 49 5.1 Crop-Yield Effects (%) under the A1B Emissions Scenario Relative to a 1981–2000 Baseline 52 5.2 Relative Changes in Crop Yields (%) under Climate Change in Year 2050 Relative to Year 2000 under the A1B Scenario 54 5.3 Per Capita Fish Consumption in Pacific Countries (kg/year/person) 56 5.4 Percentage Changes in Catches of Skipjack and Bigeye Tuna Relative to 1980–2000 Period under the B1 and A2 Emissions Scenarios 58 5.5 Selected Summary Statistics Regarding Health in Pacific Countries 63 6.1 Summary Description of Climate Scenarios 71 6.2 Global Climate Results in FUND3.6 and PAGE09 72 6.3 Annual Average Adaptation Cost over the Period 2010–2050 with 2100 Adaptation Targets 77 6.4 Annual Average Adaptation Cost over the Period 2010–2050 with 2050 Adaptation Targets 77 7.1 Sector-Specific Low-Regret Adaptation Options for the Pacific 47 Figures 2.1 Map of the Pacific Region 3 2.2 Average Annual Growth in Real GDP Per Capita, 2000–2012 (%) 6 3.1 Modeling Framework 14 3.2 Dynamic Crop Simulation Model 16 4.1 Temperature Change under A1B Scenario: Fiji, PNG, and Samoa 26 4.2 Temperature Change under A1B Scenario: Solomon, Timor-Leste, and Vanuatu 27 4.3 Distribution of SST Anomalies, A1B and A2 Scenarios 29 4.4 Climate change Impact on ENSO Events 30 4.5 ENSO Impact on Rainfall in Fiji: Baseline and A1B (mm/day/1oC) 32 4.6 ENSO Impact on Rainfall in PNG: Baseline and A1B (mm/day/1oC) 33 4.7 ENSO Impact on Rainfall in Samoa: Baseline and A1B (mm/day/1oC) 34 4.8 ENSO Impact on Rainfall in Solomon Islands: Baseline and A1B (mm/day/1oC) 35 4.9 ENSO Impact on Rainfall in Timor-Leste: Baseline and A1B (mm/day/1oC) 36 4.10 ENSO Impact on Rainfall in Vanuatu: Baseline and A1B (mm/day/1oC) 37 4.11 Extreme Temperature, Wind Speed, and Rainfall in Fiji 40 4.12 Extreme Temperature, Wind Speed, and Rainfall in PNG 41 4.13 Extreme Temperature, Wind Speed, and Rainfall in Samoa 42 vi 4.14 Extreme Temperature, Wind Speed, and Rainfall in Solomon Islands 44 4.15 Extreme Temperature, Wind Speed, and Rainfall in Timor-Leste 45 4.16 Extreme Temperature, Wind Speed, and Rainfall in Vanuatu 46 5.1 Annual Value of Production of Leading Agricultural Products in the Pacific Region, 2011 52 5.2 Shares of Gross Domestic Product from Fisheries, 2007 (%) 56 5.3 Impact of Climate Change on Total Regional Tourism Revenue under the A1 Scenario 60 5.4 Impact of Climate Change on National Tourism Revenue under the A1 Scenario 60 5.5 Projection of Coral Cover in the Pacific with Climate Change (FUND3.6) 61 5.6 Direct and Indirect Health Effects of Climate Change 64 5.7 Health Cost of Climate Change in the Pacific under A1B Scenario (as a % of projected GDP) 65 5.8 Contributors to Mortality Cost due to Climate Change in the Pacific 65 6.1 Climate change Cost in the Pacific (FUND3.6) 72 6.2 Climate change Cost in the Pacific (PAGE09) 72 6.3 Sectoral Composition of Climate change Costs (FUND3.6 and A2 Scenario) 73 6.4 Country-Specific Cost of Climate Change (Fund3.6 and A2 Scenario) 74 6.5 Cost of Climate Change by Sector (FUND3.6 and A2 Scenario) 75 6.6 Probability Distribution of Global Mean Temperature Rise under A1FI Scenario (PAGE09) 76 6.7 Probability Distribution of Global Sea-Level Rise under A1FI Scenario (PAGE09) 76 6.8 Probabilistic Cost of Climate
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