An assessment of the economic impact of climate change on the water sector in the Turks and Caicos Islands

The best description of water resources for Grand Turk was offered by Pérez Monteagudo (2000) who suggested that rain water was insufficient to ensure a regular water supply although water catchment was being practised and water catchment possibilities had been analysed. Limestone islands, mostly flat and low lying, have few possibilities for large scale surface storage, and groundwater lenses exist in very delicate equilibrium with saline seawater, and are highly likely to collapse due to sea level rise, improper extraction, drought, tidal waves or other extreme event. A study on the impact of climate change on water resources in the Turks and Caicos Islands is a challenging task, due to the fact that the territory of the Islands covers different environmental resources and conditions, and accurate data are lacking. The present report is based on collected data wherever possible, including grey data from several sources such as the Intergovernmental Panel on Climate Change (IPCC) and Cuban meteorological service data sets. Other data were also used, including the author’s own estimates and modelling results. Although challenging, this was perhaps the best approach towards analysing the situation. Furthermore, IPCC A2 and B2 scenarios were used in the present study in an effort to reduce uncertainty. The main conclusion from the scenario approach is that the trend observed in precipitation during the period 1961 - 1990 is decreasing. Similar behaviour was observed in the Caribbean region. This trend is associated with meteorological causes, particularly with the influence of the North Atlantic Anticyclone. The annual decrease in precipitation is estimated to be between 30-40% with uncertain impacts on marine resources. After an assessment of fresh water resources in Turks and Caicos Islands, the next step was to estimate residential water demand based on a high fertility rate scenario for the Islands (one selected from four scenarios and compared to countries having similar characteristics). The selected scenario presents higher projections on consumption growth, enabling better preparation for growing water demand. Water demand by tourists (stopover and excursionists, mainly cruise passengers) was also obtained, based on international daily consumption estimates. Tourism demand forecasts for Turks and Caicos Islands encompass the forty years between 2011 and 2050 and were obtained by means of an Artificial Neural Networks approach. for the A2 and B2 scenarios, resulting in the relation BAU>B2>A2 in terms of tourist arrivals and water demand levels from tourism. Adaptation options and policies were analysed. Resolving the issue of the best technology to be used for Turks and Caicos Islands is not directly related to climate change. Total estimated water storage capacity is about 1, 270, 800 m3/ year with 80% capacity load for three plants. However, almost 11 desalination plants have been detected on Turks and Caicos Islands. Without more data, it is not possible to estimate long term investment to match possible water demand and more complex adaptation options. One climate change adaptation option would be the construction of elevated (30 metres or higher) storm resistant water reservoirs. The unit cost of the storage capacity is the sum of capital costs and operational and maintenance costs. Electricity costs to pump water are optional as water should, and could, be stored for several months. The costs arising for water storage are in the range of US$ 0.22 cents/m3 without electricity costs. Pérez Monteagudo (2000) estimated water prices at around US$ 2.64/m3 in stand points, US$ 7.92 /m3 for government offices, and US$ 13.2 /m3for cistern truck vehicles. These data need to be updated. As Turks and Caicos Islands continues to depend on tourism and Reverse Osmosis (RO) for obtaining fresh water, an unavoidable condition to maintaining and increasing gross domestic product(GDP) and population welfare, dependence on fossil fuels and vulnerability to increasingly volatile prices will constitute an important restriction. In this sense, mitigation supposes a synergy with adaptation. Energy demand and emissions of carbon dioxide (CO2) were also estimated using an emissions factor of 2. 6 tCO2/ tonne of oil equivalent (toe). Assuming a population of 33,000 inhabitants, primary energy demand was estimated for Turks and Caicos Islands at 110,000 toe with electricity demand of around 110 GWh. The business as usual (BAU), as well as the mitigation scenarios were estimated. The BAU scenario suggests that energy use should be supported by imported fossil fuels with important improvements in energy efficiency. The mitigation scenario explores the use of photovoltaic and concentrating solar power, and wind energy. As this is a preliminary study, the local potential and locations need to be identified to provide more relevant estimates. Macroeconomic assumptions are the same for both scenarios. By 2050, Turks and Caicos Islands could demand 60 m toe less than for the BAU scenario.

An assessment of the economic impact of climate change on the Agriculture Sector in Jamaica

The agricultural sector‟s contribution to GDP and to exports in Jamaica has been declining with the post-war development process that has led to the differentiation of the economy. In 2010, the sector contributed 5.8% of GDP, and 3% to the exports (of goods), but with 36% of employment, it continues to be a major employer. With a little less than half of the population living in rural communities, agricultural activities, and their linkages with other economic activities, continue to play an important role as a source of livelihoods, and by extension, the economic development of the country. Sugar cane cultivation has, with the exception of a couple of decades in the twentieth century when it was superseded by bananas, dominated the agricultural export sector for centuries as the source of the raw materials for the manufacture of sugar for export. In 2005, sugar cane itself accounted for 6.4% of the sector‟s contribution to GDP, and 52% of the contribution of agricultural exports to GDP. Production for the domestic market has long been the larger subsector, organized around the production of root crops, especially yams, vegetables and condiments. To analyse the potential impact of climate change on the agricultural sector, this study selected three important crops for detailed examination. In particular, the study selected sugar cane because of its overwhelming importance to the export subsector of agriculture, and yam and escallion for both their contribution to the domestic subsector as well as the preeminent role yams and escallion play in the economic activities of the communities in the hills of central Jamaica, and the plains of the southwest respectively. As with other studies in this project, the methodology adopted was to compare the estimated values of output on the SRES A2 and B2 Scenarios with the value of output on a “baseline” Business As Usual (BAU), and then estimate the net benefits of investment in the relevant to climate change for the selected crops. The A2 and B2 Scenarios were constructed by applying forecasts of changes in temperature and precipitation generated by INSMET from ECHAM inspired climate models. The BAU “baseline” was a linear projection of the historical trends of yields for each crop. Linear models of yields were estimated for each crop with particular attention to the influence of the two climate variables – temperature and precipitation. These models were then used to forecast yields up to 2050 (table1). These yields were then used to estimate the value of output of the selected crop, as well as the contribution to overall GDP, on each Scenario. The analysis suggested replanting sugar cane with heat resistant varieties, rehabilitating irrigation systems where they existed, and establishing technologically appropriate irrigation systems where they were not for the three selected crops.