An assessment of the economic impact of climate change on the Agriculture, Energy and Health sectors in Trinidad and Tobago

This report analyses the agriculture, energy, and health sectors in Trinidad and Tobago to assess the potential economic impacts of climate change on the sectors. The fundamental aim of this report is to assist with the development of strategies to deal with the potential impact of climate change on Trinidad and Tobago. It also has the potential to provide essential input for identifying and preparing policies and strategies to help advance the Caribbean subregion closer to solving problems associated with climate change and attaining individual and regional sustainable development goals. Some of the key anticipated impacts of climate change for the Caribbean include elevated air and sea-surface temperatures, sea-level rise, possible changes in extreme events and a reduction in freshwater resources. The economic impact of climate change on the three sectors was estimated for the A2 and B2 IPCC scenarios until 2050. An exploration of various adaptation strategies was also undertaken for each sector using standard evaluation techniques. The study of the impact of climate change on the agriculture sector focused on root crops, green vegetables and fisheries. For these sectors combined, the cumulative loss under the A2 scenario is calculated as approximately B$2.24 and approximately B$1.72 under the B2 scenario by 2050. This is equivalent to 1.37% and 1.05% of the 2008 GDP under the A2 and B2 scenarios, respectively. Given the potential for significant damage to the agriculture sector a large number of potential adaptation measures were considered. Out of these a short-list of 10 potential options were selected by applying 10 evaluation criteria. All of the adaptation strategies showed positive benefits. The analysis indicate that the options with the highest net benefits are: (1) Building on-farm water storage, (2) Mainstreaming climate change issues into agricultural management and (3) Using drip irrigation. Other attractive options include water harvesting. The policy decisions by governments should include these assessments, the omitted intangible benefits, as well as the provision of other social goals such as employment. The analysis of the energy sector has shown that the economic impact of climate change during 2011-2050 is similar under the A2 (US$142.88 million) and B2 (US$134.83 million) scenarios with A2 scenario having a slightly higher cost (0.737% of 2009 GDP) than the B2 scenario (0.695% of 2009 GDP) for the period. On the supply side, analyses indicate that Trinidad and Tobago’s energy sector will be susceptible to the climate change policies of major energy-importing countries (the United States of America and China), and especially to their renewable energy strategies. Implementation of foreign oil substitution policy by the United States of America will result in a decline in Trinidad and Tobago’s Liquefied Natural Gas (LNG) export (equivalent to 2.2% reduction in 2009 GDP) unless an alternative market is secured for the lost United States of America market. China, with its rapid economic growth and the highest population in the world, offers a potential replacement market for Trinidad and Tobago’s LNG export. In this context the A2 scenario will offer the best option for Trinidad and Tobago’s energy sector. The cost-benefit analysis undertaken on selected adaptation strategies reveal that the benefit-cost ratio of replacing electric water heaters with solar water heaters is the most cost-effective. It was also found that the introduction of Compact Fluorescent Light (CFL) and Variable Refrigerant Volume (VRV) air conditioners surpasses the projected cost of increased electricity consumption due to climate change, and provides an economic rationale for the adoption of these adaptation options even in a situation of increased electricity consumption occasioned by climate change. Finally, the conversion of motor fleets to Compressed Natural Gas (CNG) is a cost-effective adaptation option for the transport sector, although it has a high initial cost of implementation and the highest per capita among the four adaptation options evaluated. To investigate the effect of climate change on the health sector dengue fever, leptospirosis, food borne illnesses, and gastroenteritis were examined. The total number of new dengue cases for the period 2008 to 2050 was 204,786 for BAU, 153,725 for A2 and 131,890 for the B2 scenario. With regard to the results for leptospirosis, A2 and B2 seem to be following a similar path with total number of new cases in the A2 scenario being 9,727 and 9,218 cases under the B2 scenario. Although incidence levels in the BAU scenario coincided with those of A2 and B2 prior to 2020, they are somewhat lower post 2020. A similar picture emerges for the scenarios as they relate to food-borne illnesses and to gastroenteritis. Specifically for food-borne illnesses, the BAU scenario recorded 27,537 cases, the A2 recorded 28,568 cases and the B2 recorded 28,679 cases. The focus on the selected sources of morbidity in the health sector has highlighted the fact that the vulnerability of the country’s health sector to climate change does not depend solely on exogenously derived impacts, but also on the behaviour and practices among the population. It is clear that the vulnerability which became evident in the analysis of the impacts on dengue fever, leptospirosis and food-borne illnesses is not restricted solely to climate or other external factors. The most important adaptation strategy being recommended targets lifestyle, behaviour and attitude changes. The population needs to be encouraged to alter their behaviours and practices so as to minimise their exposure to harmful outcomes as it relates to the incidence of these diseases.

An assessment of the economic impact of climate change on the Energy Sector in Trinidad and Tobago

The energy sector is a dominant one in Trinidad and Tobago and it plays an important role in the twin-island republic‟s economy. In 2008, the share of the energy sector in gross domestic product (GDP) amounted to approximately 48% while contributing 57% to total Government revenue. In that same year, the sector‟s share of merchandise exports was 88%, made up mainly of refined oil products including petroleum, liquefied natural gas (LNG), and natural gas liquids (Central Bank of Trinidad and Tobago, 2009). Trinidad and Tobago is the main exporter of oil in the Caribbean region and the main producer of liquefied natural gas in Latin America and the Caribbean. The role of the country‟s energy sector is, therefore, not limited to serving as the engine of growth for the national economy but also includes providing energy security for the small island developing States of the Caribbean. However, with its hydrocarbon-based economy, Trinidad and Tobago is ranked seventh in the world in terms of carbon dioxide (CO2) emissions per capita, producing an estimated 40 million tonnes of CO2 annually. Almost 90% of these CO2 emissions are attributed directly to the energy sector through petrochemical production (56%), power generation (30%) and flaring (3%). Trinidad and Tobago is a ratified signatory to the United Nations Framework Convention on Climate Change and the Kyoto Protocol. Although, as a non-Annex 1 country, Trinidad and Tobago is not required to cut its greenhouse gas emissions under the Protocol, it is currently finalizing a climate change policy document as well as a national energy policy with specific strategies to address climate change. The present study complements the climate change policy document by providing an economic analysis of the impact that climate change could have on the energy sector in Trinidad and Tobago under the Intergovernmental Panel on Climate Change alternative climate scenarios (A2 and B2) as compared to a baseline situation of no climate change. Results of analyses indicate that, in the short-run, climate change, represented by change in temperature, is not a significant determinant of domestic consumption of energy, electricity in particular, in Trinidad and Tobago. With energy prices subsidized domestically and fixed for years at a time, energy price does not play a role in determining electricity demand. Economic growth, as indicated by Gross Domestic Product (GDP), is the single major determinant of electricity consumption in the short-run. In the long-run, temperature, GDP, and patterns of electricity use, jointly determine electricity consumption. Variations in average annual temperature due to climate change for the A2 scenario are expected to lead to an increase in electricity consumption per capita, equivalent to an annual increase of 1.07% over the 2011 baseline value of electricity consumption per capita. Under the B2 scenario, the average annual increase in electricity consumption per capita over the 2011 baseline value is expected to be 1.01%. The estimated economic impact of climate change on electricity consumption for the period 2011-2050 is valued at US$ 142.88 million under the A2 scenario and US$ 134.83million under the B2 scenario. These economic impact estimates are equivalent to a loss of 0.737% of 2009 GDP under the A2 climate scenario and a loss of 0.695% of 2009 GDP under the B2 scenario. On the energy supply side, sea level rise and storm surges present significant risks to oil installations and infrastructure at the Petroleum Company of Trinidad and Tobago (PETROTRIN) Pointe-a-Pierre facilities (Singh and El Fouladi, 2006). However, data limitations do not permit the conduct of an economic analysis of the impact of projected sea level rise on oil and gas production.

An assessment of the economic impact of climate change on the agriculture sector in Trinidad And Tobago

The economic impact of climate change on root crop, fisheries and vegetable production for Trinidad and Tobago under the A2 and B2 scenarios were modeled, relative to a baseline ―no climate change‖ case, where the mean temperature and rainfall for a base period of 1980 – 2000 was assumed for the years up to 2050. Production functions were used, using ARMA specifications to correct for serial autocorrelation. For the A2 scenarios, rainfall is expected to fall by approximately 10% relative to the baseline case in the 2020s, but is expected to rise thereafter, until by the 2040s rainfall rises slightly above the mean for the baseline case. For the B2 scenario, rainfall rose slightly above the mean for the baseline case in the current decade, but falls steadily thereafter to approximately 15% by the 2040s. Over the same period, temperature is expected to increase by 1.34C and 1.37C under A2 and B2 respectively. It is expected that any further increase in rainfall should have a deleterious effect on root crop production as a whole, since the above mentioned crops represent the majority of the root crops included in the study. Further expected increases in temperature will result in the ambient temperature being very close to the optimal end of the range for most of these crops. By 2050, the value of yield cumulative losses (2008$) for root crops is expected to be approximately 248.8 million USD under the A2 scenario and approximately 239.4 million USD under the B2 scenario. Relative to the 2005 catch for fish, there will be a decrease in catch potential of 10 - 20% by 2050 relative to 2005 catch potentials, other things remaining constant. By 2050 under the A2 and B2 scenarios, losses in real terms were estimated to be 160.2 million USD and 80.1 million USD respectively, at a 1% discount rate. For vegetables, the mean rainfall exceeds the optimal rainfall range for sweet peppers, hot peppers and melongene. However, while the optimal rainfall level for tomatoes is 3000mm/yr, other vegetables such as sweet peppers, hot peppers and ochroes have very low rainfall requirements (as low as 300 mm/yr). Therefore it is expected that any further decrease in rainfall should have a mixed effect on individual vegetable production. It is expected that any further increase in temperature should have a mixed effect on individual vegetable production, though model results indicated that as a group, an increase in temperature should have a positive impact on vegetable production. By 2050, the value of yield cumulative gains (2008$) for vegetables is expected to be approximately 54.9 million USD under the A2 scenario and approximately 49.1 million USD under the B2 scenario, given a 1% discount rate. For root crops, fisheries and vegetables combined, the cumulative loss under A2 is calculated as approximately 352.8 million USD and approximately 270.8 million USD under B2 by 2050. This is equivalent to 1.37% and 1.05% of the 2008 GDP under the A2 and B2 scenarios respectively by 2050. Sea Level Rise (SLR) by 2050 is estimated to be 0.255 m under A2 and 0.215 m under B2. GIS estimation indicated that for a 0.255 m sea level rise, combined with a 0.5 m high tide, there would be no permanent inundation of agricultural land in Trinidad. The total inundation area is 1.18 km2. This occurs only in the Caroni Watershed, on the western coast of Trinidad, and the areas are outside the Caroni Swamp. Even with an additional rise of 0.5 m to simulate a high rainfall event, the estimated inundated area is 4.67 km2, but with no permanent inundation, though likely to be subject to flooding. Based on eleven (11) evaluation criteria, the top potential adaptation options were identified: 1. Use of water saving irrigation systems and water management systems e.g. drip irrigation; 2. Mainstream climate change issues into agricultural management; 3. Repair/maintain existing dams; 4. Alter crop calendar for short-term crops; 5. Adopt improved technologies for soil conservation; 6. Establish systems of food storage; 7. Promote water conservation – install on-farm water harvesting off roof tops; 8. Design and implement holistic water management plans for all competing uses; 9. Build on- farm water storage (ponds and tanks); 10. Agricultural drainage; and 11. Installation of greenhouses. The most attractive adaptation options, based on the Benefit-Cost Ratio are: (1) Build on- farm water storage such as ponds and tanks (2) Mainstreaming climate change issues into agricultural management and (3) Water Harvesting. However, the options with the highest net benefits are, (in order of priority): (1) Build on- farm water storage such as ponds and tanks, (2) Mainstreaming climate change issues into agricultural management and (3) Use of drip irrigation. Based on the area burnt in Trinidad and Tobago between 2005 and 2009, the average annual loss due to fires is 1717.3 ha. At US$17.41 per carbon credit, this implies that for the total land lost to forest fires on average each year, the opportunity cost of carbon credit revenue is 74.3 million USD. If a teak reforestation programme is undertaken in Trinidad and Tobago, the net benefit of reforestation under a carbon credit programme would be 69 million USD cumulatively to 2050.

An assessment of the economic impact of climate change on the health sector In Trinidad And Tobago

This research paper assesses the likely economic impact of climate change on the health sector in Trinidad and Tobago. The analysis, however, was limited to the economic impact of only a few climate-related diseases1 for which data were available. The approach utilized in this paper makes for easy extrapolation once the data on the other climate-related illnesses become available so that a full impact assessment can be carried out.

Research on policies and institutions to support small and medium scale enterprise in the Caribbean: Trinidad adn Tobago report

The Government of Trinidad and Tobago continues to provide support to SMEs in order to enhance their international competitiveness. The increasing effects of globalization and the reality of several trade agreements require that local businesses attain and maintain a level of competitiveness which ensures their continued survival and growth. This report examines in detail the policy environment within which these enterprises operate. It also examines the role of the key implementing agencies such as the BDC and NEDCO for government’s policy on the sector and also the role of the respective line ministries. These organizations strive to deliver value added technical, financial and export promotion services to its clients on a subsidised basis. The services offered reflect five key business areas such as financing, training, technical assistance, trade assistance, business re-engineering, project management and export promotion. In the case of the BDC its services target six sectors: food and beverage, metal processing, leisure marine, including yachting, information and communication technology/electronics, printing and packaging and entertainment. These said sectors are identified by the government, on the basis of a study which was done by TIDCO, for the promotion of a cluster development strategy. In the case of NEDCO it targets the following sectors: art and craft, food and beverages, fashion and fashion accessories, culture and ecotourism, bed and breakfast operations, indigenous entertainment and light manufacturing.

Competitividad exportadora de una economía petrolera-gasera: el caso de Trinidad y Tabago, 1985-2010

El sector del petróleo y el gas (sobre todo a partir del año 2000) ha liderado la economía de Trinidad y Tabago desde finales de los años setenta, gravitando fuertemente en el pib, las exportaciones totales y los ingresos fiscales. Pero sus perspectivas de mediano plazo pueden deteriorarse si la explotación petrolífera y gasífera aumenta en otros países, y si los Estados Unidos de América alcanzan la autosuficiencia energética. Por ello, resulta relevante analizar la evolución y competitividad de sus exportaciones petroleras y no petroleras, aplicando el indicador de ventaja comparativa revelada, también empleado por la cepal tanto en el mercado estadounidense, como a nivel mundial. Se incluyen además otros indicadores de comercio exterior para conocer las características del intercambio comercial de Trinidad y Tabago. Se analiza el período 1985-2010 y los resultados presentados procuran impulsar la diversificación exportadora de este país con miras a mercados más dinámicos y diversificados.

Dissemination of Caribbean census microdata to researchers: Including an experiment in the anonymization of microdata for Grenada and Trinidad and Tobago

Caribbean census microdata are not easily accessible to researchers. Although there are well-established and commonly used procedures technical, administrative and legal which are used to disseminate anonymized census microdata to researchers, they have not been widely used in the Caribbean. The small size of Caribbean countries makes anonymization relatively more difficult and standard methods are not always directly applicable. This study reviews commonly used methods of disseminating census microdata and considers their applicability to the Caribbean. It demonstrates the application of statistical disclosure control methods using the census datasets of Grenada and Trinidad and Tobago and considers various possible designs of microdata release file in terms of disclosure risk and utility to researchers. It then considers how various forms of microdata dissemination: public use files, licensed use files, remote data access and secure data laboratories could be used to disseminate census microdata. It concludes that there is scope for a substantial expansion of access to Caribbean census microdata and that through collaboration with international organisations and data archives, this can be achieved with relatively little burden on statistical offices.

Export competitiveness in an oil and gas economy: the case of Trinidad and Tobago, 1985-2010

The oil and gas sector has led the economy of Trinidad and Tobago since the late 1970s and, more pronouncedly, since 2000, accounting for a large share of gdp, total exports and tax revenue. Its prospects in the medium term could be negatively affected, however, if oil and gas extraction expands in other countries, and if the United States attains energy self-sufficiency. This paper offers an analysis of the evolution and competitiveness of its oil and non-oil exports to both the United States and global markets, based on the revealed comparative advantage (rca) index used by eclac. Other foreign trade indicators are also included to determine the structure of the country’s trading relations. The period from 1985 to 2010 is analysed and the results presented are intended to advocate the diversification of Trinidad and Tobago’s exports into more dynamic and diversified markets.