Belize And Climate Change - UNDP

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Robert B. Richardson, PhDMichigan State UniversityBelizeand Climate Change:The Costs ofInaction2009Human Development Issues PaperUnited Nations Development Programme

Edited by:Acknowledgments:Photo Credits:Contact:ISBN:United Nations Development Programme,Belmopan, Belize.July 2009Many thanks to the following individuals whose works contributed tothe development of this document: Mr. Earl Green, Mr. Sergio Garcia,Mr. Carlos Santos , Mr. Dennis Gonguez, Mrs. Ann Gordon, Mr. Jose Mai,Dr. Robert Richardson, Mr. Vincent Gillett and Mr. George Myvette.Mr. Dirk Francisco,Belize Damage and Needs Assessment Team.BECOL.Mrs. Diane Wade-MooreEnvironmental Programme AnalystUNDP Belize, 2nd Floor, David Habet Building, 7 Constitution DriveBelmopan, Belize.diane.wade@undp.orgTel: (501) 822 2688?Design:Contracorriente Editores, El SalvadorPrinter:?The views expressed in this publication are those of theauthor and do not necessarily represent those of UNDPBelizeAll right reserved. No part of this publication may bereproduced, stored in a retrieval system or transmitted, in anyform or by any means, electronic, mechanical, photocopying,recording or otherwise, without prior written permission.

ContentsExecutive summary41Introduction82Belize’s future climate143Economic impacts of climatechange204Methodology245Agriculture and fisheries266Energy347Tourism408Other Economic impactsof climate change46Bibliography50

Executive SummaryExecutive SummaryLike many other low-lying coastal nations, Belize is vulnerable tothe effects of climate change. Its geographical location leaves thecountry exposed to the risk of rising sea levels and increasingfrequency and intensity of tropical storms. Its economic dependence on natural resources heightens its vulnerability to rising temperatures and the resulting impacts on agricultural productivity,fisheries ecosystems, and other economic sectors. Scientists haveconcluded that global warming is “unequivocal” (IPCC, 2007)and that human activities have exacerbated the effects primarilythrough emissions of greenhouse gases such as carbon dioxide(CO2). The Intergovernmental Panel on Climate Change (IPCC)stated in its Fourth Assessment Report (IPCC, 2007) that globaltemperatures are increasing, sea levels are rising, and polar ice ismelting. The report warns that if emissions of greenhouse gasescontinue unabated, the effects of climate change jeopardize thesustainability of social, economic, and ecological systems throughout the world. Tropical islands and coastal areas face acute risksof flooding, coastal erosion, drought, and loss of ecosystems. Thethreat of climate change requires multilateral action from policymakers and the private sector throughout the world to seek solutions to reduce global emissions of greenhouse gases in orderto mitigate the effects of climate change. In addition, the effectsalready taking place require that some nations find ways to adapt

Belize and Climate Change:The Costs of Inactionto imminent climate change in order to minimize vulnerability and enhance resilience tofuture risks.This report is concerned with the economicimpact of climate change for Belize, and thecosts of inaction in responding to the impending risks. There have been several studies ofthe costs of inaction on climate change whichhave focused on the damages to specific regions or economic sectors. The estimateshave been generally based on the assumptionof a high (or “business-as-usual”) scenario ofincreasing global emissions of greenhousegases, and a low scenario (or “rapid stabilisation”) scenario with swift reductions inemissions by mid-century. The costs of inaction—or the difference between the impactsassociated with these two scenarios—can beunderstood as the potential savings from acting in time to prevent the worst economicconsequences of climate change. These studies have acknowledged the nature of the distribution of the impacts of climate change; thegreatest responsibility for the increase in theconcentration of greenhouse gases is attributed to industrialised countries (mostly in thenorthern hemisphere), while the worst socialand economic impacts of climate change willbe borne by developing countries, especiallythose in tropical regions (and many in thesouthern hemisphere).As a small country with relatively minor contributions to global greenhouse gas emissions,Belize has a limited capacity to contributeto mitigation of the effects of global climatechange. Certainly Belize has a responsibilityto reduce its emissions of greenhouse gasesin line with international objectives and targets. However, in considering the costs ofinaction for Belize, this report focuses lesson the costs of reducing emissions, and instead emphasizes the costs of avoiding ordelaying critical adaptation measures. To minimize the worst impacts of climate change,many of which are described in this report,policy makers must design national policiesthat consider adaptation measures in order to enhance economic sustainability andstrengthen national development initiatives.By implementing a comprehensive climatechange adaptation strategy, many of the costsof inaction described in this report can beUnited Nations Development Programmeavoided. Studies of the costs of inaction onclimate change have generally concluded thatwhile the necessary actions to reduce globalgreenhouse gas emissions or protect againstclimate-related impacts will most certainlyhave significant costs, doing nothing aboutclimate change will have potentially greatercosts. Actions to minimize the most damagingconsequences from climate change requirethe attention of all nations.The expected impacts of climate changepose a range of risks to human beings, including water stress, loss of important ecosystems, changes in agricultural productivity,physical damage from flooding and storms,increased burdens from malnutrition andinfectious diseases, and increased morbidity and mortality from heat stress, flooding,and drought. This report begins with a discussion of climate projections for Belize andan introduction to the economic impacts ofclimate change generally. Following a reviewof the methods employed in estimating thecosts of inaction for Belize, the report characterizes the vulnerability of three economicsectors in Belize to the effects of climatechange: agriculture and fisheries, energy andtourism. The impacts of climate change forthese three sectors and the related costs ofinaction are described and analyzed. The assessment of each economic sector includesa discussion of appropriate adaptation strategies that should be considered in order tominimize the vulnerability to climate change.While the economic costs of climate changein Belize are not limited to these three sectors, their relative economic importance andoverall vulnerability to environmental changeprovide a useful context in which to discussthe costs of climate change for the country.In highlighting the costs of inaction on climate change for Belize, this report aims tomotivate and inform the national and international deliberations around appropriate policy responses that will reduce globalgreenhouse gas emissions and strengthen local adaptive capacity.The future climate for Belize and the Central America and Caribbean regions will likelybe characterized by increasing temperaturesand declining levels of precipitation. Theseprojections have been confirmed through5

executive summaryseveral analyses of climate models. One studyprojected a median temperature increase of2.0 C (3.6 F) for the Caribbean region and3.2 C (5.7 F) for the Central American region,and they project a median decrease in annualprecipitation of 12% for the Caribbean region and 9% for the Central American region.The models also projected a 39% increase inextremely dry seasons for the Caribbean anda 33% increase for Central America. Anotherstudy generated regional estimates of futuretemperature and precipitation, and projected an annual average temperature increaseof 3.5 C (6.4 F) for Central America, and adecrease in precipitation of 0.33mm (0.013inches) per day, or 120.45mm (4.7 inches) peryear. Climate data for Belize were used to estimate trends in average rainfall and temperatures from 1960 through 2005. Of the tenwarmest years in the record, five of these occurred in the 1990s and four occurred since2000. The trend analysis was combined withclimate projections from a regional climatemodel to project average temperature andrainfall in Belize for the period 2010-2100.Average annual temperatures are expectedto increase 3.5 C (6.4 F) over the 90-yearperiod, while average rainfall is expected todecrease by 100mm.There have been several attempts to measure the costs of climate change globallyand for specific regions. The Stern Review(2007) estimated the costs of inaction related to reducing risks of climate change atapproximately five percent of global grossdomestic product (GDP) per year, based onmarket impacts alone. When non-marketimpacts such as costs of health and environmental effects are incorporated into theanalysis, the total average cost was estimated to be approximately 11% of global GDP.If the sensitivity of climate to carbon dioxide(CO2) concentration is greater than baselineestimates, the projected losses were morethan 14% of global GDP. Finally, accountingfor distributional effects (based on the assumption that the impacts will be greaterfor developing countries), the total cost wasestimated at approximately 20% of currentper capita consumption.An analysis of the impacts of climate changefor several economic sectors in the US state6of Florida projected costs to the state ofUS 27 billion by 2025 (or 1.6% of gross stateproduct [GSP]) and US 92 billion by 2050(or 2.8% of GSP). Cost estimates increase inthe distant future to US 345 billion (or 5.0%of GSP) largely due to rapidly increasing tourism losses and hurricane damages. An analysisof the costs of inaction for the twenty-fourisland nations of the Caribbean focused onjust three categories of economic effects—hurricane damages, tourism losses, and damages to infrastructure from sea-level rise. Thestudy projected economic costs to the region of US 11 billion by 2025 (or 5.0% of2004 GDP for the region) and US 22 billionby 2050 (or 10% of GDP). The damages toinfrastructure due to sea-level rise representa significant component of their estimates, reflecting the low-lying nature of the islands.The first economic sector considered in thisreport is agriculture and fisheries, which areboth vulnerable to the effects of climatechange by virtue of their dependence onnatural resources (such as air, water, and soil)and a range of favorable climate conditions.The vulnerability of agriculture is systematically greater for developing countries, particularly those in tropical zones, since manysuch countries are already at or near theirtemperature threshold for many crops. Furthermore, agriculture constitutes a relativelygreater portion of national GDP in developing countries, and most developing countrieshave less capacity to adapt to climate change.Cereal grain yields in particular are projectedto decline with increasing temperatures andmoisture stress. Extended periods of hightemperatures, intense storms, and droughtscan disrupt crop production or reduce yields.Some crops in Belize such as maize, whichare already grown near their limits of temperature tolerance, may be increasingly vulnerable to warming and drought.One estimate of regional agricultural impacts of climate change used crop models toproject a 24% decline in output per hectarefor Central America by 2080. Under an assumption of positive yield effects from carbon fertilisation, the impact was a 12% decline in output for the region. A vulnerabilityassessment for agriculture and food securityin Belize projected yield effects for three staHuman Development Issues Paper

Belize and Climate Change:The Costs of Inactionple crops—rice, maize, and beans. The models projected shorter growing seasons for allthree crops as well as decreases in yields of10% to 20% across the various scenarios. Projected reductions in yields were 14-19% forbeans, 10-14% for rice, and 17-22% for maize.These three staple crops are important toBelize’s food security as well as for export income, and reductions in yield for these cropsalone would represent BZ 13-18 million inlost revenue. Sugar and banana productionare likely to face risks from encroachment ofsalt water in nearby river streams.ed to grow at an average rate of 6.52% fora high scenario and 3.76% for a low scenario.The costs of additional electricity demand inBelize due to climate change are estimatedat BZ 1.7 million in the low scenario andBZ 59.7 million in the high scenario, and theestimated economic impact of climate changefor the electricity sector in Belize is approximately BZ 58 million by 2080. Increased useof renewable resources for energy production and diversification of energy sourceshave been identified as potentially effectiveadaptation strategies.The fisheries sector is vulnerable to the effects of climate change, particularly the impacts of warmer sea surface temperatures,sea-level rise, increasing concentrations ofcarbon dioxide (CO2), and extreme weatherevents. Healthy coral reefs protect habitatand nutrients for numerous species, and provide numerous economic benefits, generatingincome from both fishing and tourism. Coralreefs are particularly vulnerable to changesin sea surface temperatures, and the reefsof the Caribbean Sea already live near theirthresholds of temperature tolerance. Marineproducts have traditionally played an important role in the economy of Belize; in recentyears, exports have ranged between BZ 85and 100 million. Projecting specific climateimpacts to fish species (and their associatedeconomic impacts) is complex and rife withuncertainty, but the importance of coral reefhealth for fisheries and the importance ofwater quality for aquaculture warrants regular monitoring of these and other relevantparameters to ensure the sustainability of thefisheries sector in Belize.The third and final economic sector considered in this report is tourism, which for Belize, is vulnerable because of its dependenceon natural resources such as coastal beaches,coral reefs, wildlife, and forests. Coastal tourism faces particular risks from erosion, flooding, salinisation, and the threats to physicalproperty. Warmer sea water threatens thecoral reefs that attract thousands of touristsfor snorkeling and scuba diving activities. Also,warmer sea surface temperatures are associated with increasing frequency and intensity of tropical cyclones or hurricanes, whichthreaten coastal settlements and infrastructure.Tourism researchers have projected thatclimate change may reduce the appeal oftropical destinations because of heat stress,beach erosion, decline in reef quality, and increased health risks. For this report, the economic impact of climate change for the tourism sector in Belize are estimated at BZ 48.3million, and includes the effects of reducedtourism demand, loss of facilities (from sealevel rise), loss of beaches (from coastal erosion), and loss of reef-based ecotourism.The second economic sector considered inthis report is energy, and climate change isexpected to affect electricity demand throughwarmer days and nights, more frequent heatwaves, more intense storms, and changes inwater availability. Demand for air conditioning, cooling, and refrigeration is expected toincrease, while demand for heating is likely todecrease. Future electricity demand dependsin part on population growth and economicdevelopment, but electricity sales are project-The additional threats to coastal communities, infrastructure, public health, water availability, and forests are also discussed, but theireconomic impacts are beyond the scope ofthe report and therefore were not estimated.Nevertheless, the vulnerability of the threeeconomic sectors discussed in the reportand many other projected impacts of climatechange highlight the importance of incorporating adaptation strategies into national development planning.United Nations Development Programme7

Introduction1IntroductionOver the last several years, an overwhelming consensus hasemerged among the scientific community regarding the fact thatthe earth’s climate is changing due primarily to anthropogenic factors. The Intergovernmental Panel on Climate Change (IPCC) hasdescribed global warming as “unequivocal,” citing increasing temperatures, rising sea levels, and widespread melting of polar iceas evidence (IPCC, 2007). Furthermore, in its Fourth AssessmentReport, the IPCC (2007) stated that emissions of greenhousegases such as carbon dioxide (CO2) have “very likely1” exacerbated the effects. The IPCC’s Fourth Assessment Report (IPCC,2007) uses the strongest language yet to support scientific conclusions that the global climate is warming, sea levels are rising, andthat human activities are largely responsible. The report also citesobservational evidence of an increase in the intensity of tropicalcyclones in the North Atlantic since 1970, but found no trend forthe annual numbers of storms. If emissions continue unabated, theimpacts of climate change are expected to threaten the sustainability of social, economic, and ecological systems of all regions of1. The IPCC (2007) uses a standard terminology to determine the likelihood of an occurrence, outcome, or result, where this can be determined probabilistically. Thephrase, “very likely” refers to probability greater than 90%.

Belize and Climate Change:The Costs of Inactionthe world. Islands and coastal zones in tropical regions are particularly vulnerable to theeffects of rising sea levels, flooding, inundation, drought, and loss of ecosystems.This report is concerned with the economicdamages of climate change – the costs of inaction – for Belize. As a low-lying developing country, Belize is highly vulnerable to theeffects of climate change. The economic impacts of climate change in developing countries are likely to include declining agriculturalincomes, higher costs of natural disasters, anda greater risk to human health from vectorborne illnesses, malnutrition, heat stress, andwater-related diseases (IPCC, 2007; Stern,2007). These effects will have implicationsfor the growing problem of poverty and islikely to slow progress toward meeting theMillennium Development Goals. Like many ofits neighboring countries in Central Americaand the Caribbean, Belize is dependent uponnatural resources for its economic livelihood.Agricultural products, fisheries, forests, andthe ecosystems that serve as tourist attractions support more than thirty percent of thegross domestic product (GDP) of Belize, andas export products, these natural resourcesgenerate significant amounts of foreign exchange earnings. The risks to natural resources in Belize from climate change threaten thedevelopment trajectory of the country andthe quality of life of its people. The objectivesof the report are to highlight the critical importance of both reducing global emissions ofgreenhouse gases and enacting national policies that facilitate the adaptation of key industries and coastal communities to the impactsof climate change. This report contributes tothe growing body of literature on the costs ofinaction, and in turn, to the critical considerations of appropriate policy responses aimedto reduce global emissions and strengthen local adaptive capacity.terms of higher agricultural yields, lower heating requirements, and lower winter mortality.But most developing countries (particularlythose in tropical regions) will be negativelyaffected due to geographic exposure and arelatively greater reliance on climate-sensitivesectors such as agriculture and fisheries. Significant costs are anticipated for developingcountries, and minimal or no benefits in manycases. Temperature increases of about 0.6 Cover pre-i

to imminent climate change in order to mini-mize vulnerability and enhance resilience to future risks. This report is concerned with the economic impact of climate change for Belize, and the costs of inaction in responding to the impend-ing risks. There have been several studies of the costs of inaction on climate change which

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