• Saturday, October 30, 2010
• Inter Press Service

With a recent study warning that the Caribbean could lose six percent of its Gross Domestic Product annually to the ravages of climate change, some experts say that a combination of adaptation funding and risk pooling is the region's best hope for the future.

'Climate risk insurance is already considered a critical tool in any comprehensive framework aimed at effectively adapting to the changing, and more changeable, climate,' Milo Pearson, chair of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), told IPS.

'As the regional impacts of climate change become more apparent in the future - with expectations of an increase in extremes in weather patterns such as drought, extreme rainfall events and an increase in greater magnitude hurricanes - climate insurance will become even more critical in addressing the enhanced risks associated with these changes,' he said.

The Caymans-based CCRIF is owned and operated by 16 Caribbean governments, and is the world's first and, to date, only regional fund to provide earthquake and hurricane coverage in the form of a set payment when disaster strikes. A similar model is currently under discussion by Pacific Island states, Pearson said. The facility's recent study, 'The Economics of Climate Change Adaptation in the Caribbean', focused on eight countries - Anguilla, Antigua and Barbuda, Barbados, Bermuda, the Cayman Islands, Dominica, Jamaica and St. Lucia.

It found that annual expected losses from wind, storm surge and inland flooding already amount to up to six percent of GDP in some countries and that, in a worst case scenario, losses could reach as high as nine percent, with wind the single largest damage contributor. This is equivalent to the impact of a serious economic recession - one that never ends, the study said.

Expected losses from climate risks varied significantly across the pilot countries, ranging from one percent of GDP in Antigua and Barbuda to six percent in Jamaica. The differences were driven by various factors including topography and exposure to coastal hazards, the economic importance of particularly vulnerable sectors, and location.

© Inter Press Service (2010) — All Rights Reserved. Original source: Inter Press Service

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