An assessment of the economic impact of climate change on the Agriculture, Health and Tourism sectors in Saint Lucia

This report analyses the agriculture, health and tourism sectors in Saint Lucia 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 in Saint Lucia. 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 evaluation of various adaptation strategies for each sector was also undertaken using standard evaluation techniques. The key subsectors in agriculture are expected to have mixed impacts under the A2 and B2 scenarios. Banana, fisheries and root crop outputs are expected to fall with climate change, but tree crop and vegetable production are expected to rise. In aggregate, in every decade up to 2050, these sub-sectors combined are expected to experience a gain under climate change with the highest gains under A2. By 2050, the cumulative gain under A2 is calculated as approximately US$389.35 million and approximately US$310.58 million under B2, which represents 17.93% and 14.30% of the 2008 GDP respectively. This result was unexpected and may well be attributed to the unavailability of annual data that would have informed a more robust assessment. Additionally, costs to the agriculture sector due to tropical cyclones were estimated to be $6.9 million and $6.2 million under the A2 and B2 scenarios, respectively. There are a number of possible adaptation strategies that can be employed by the agriculture sector. The most attractive adaptation options, based on the benefit-cost ratio are: (1) Designing and implementation of holistic water management plans (2) Establishment of systems of food storage and (3) Establishment of early warning systems. Government policy should focus on the development of these adaption options where they are not currently being pursued and strengthen those that have already been initiated, such as the mainstreaming of climate change issues in agricultural policy. The analysis of the health sector placed focus on gastroenteritis, schistosomiasis, ciguatera poisoning, meningococal meningitis, cardiovascular diseases, respiratory diseases and malnutrition. The results obtained for the A2 and B2 scenarios demonstrate the potential for climate change to add a substantial burden to the health system in the future, a factor that will further compound the country’s vulnerability to other anticipated impacts of climate change. Specifically, it was determined that the overall Value of Statistical Lives impacts were higher under the A2 scenario than the B2 scenario. A number of adaptation cost assumptions were employed to determine the damage cost estimates using benefit-cost analysis. The benefit-cost analysis suggests that expenditure on monitoring and information provision would be a highly efficient step in managing climate change and subsequent increases in disease incidence. Various locations in the world have developed forecasting systems for dengue fever and other vector-borne diseases that could be mirrored and implemented. Combining such macro-level policies with inexpensive micro-level behavioural changes may have the potential for pre-empting the re-establishment of dengue fever and other vector-borne epidemic cycles in Saint Lucia. Although temperature has the probability of generating significant excess mortality for cardiovascular and respiratory diseases, the power of temperature to increase mortality largely depends on the education of the population about the harmful effects of increasing temperatures and on the existing incidence of these two diseases. For these diseases it is also suggested that a mix of macro-level efforts and micro-level behavioural changes can be employed to relieve at least part of the threat that climate change poses to human health. The same principle applies for water and food-borne diseases, with the improvement of sanitation infrastructure complementing the strengthening of individual hygiene habits. The results regarding the tourism sector imply that the tourism climatic index was likely to experience a significant downward shift in Saint Lucia under the A2 as well as the B2 scenario, indicative of deterioration in the suitability of the island for tourism. It is estimated that this shift in tourism features could cost Saint Lucia about 5 times the 2009 GDP over a 40-year horizon. In addition to changes in climatic suitability for tourism, climate change is also likely to have important supply-side effects on species, ecosystems and landscapes. Two broad areas are: (1) coral reefs, due to their intimate link to tourism, and, (2) land loss, as most hotels tend to lie along the coastline. The damage related to coral reefs was estimated at US$3.4 billion (3.6 times GDP in 2009) under the A2 scenario and US$1.7 billion (1.6 times GDP in 2009) under the B2 scenario. The damage due to land loss arising from sea level rise was estimated at US$3.5 billion (3.7 times GDP) under the A2 scenario and US$3.2 billion (3.4 times GDP) under the B2 scenario. Given the potential for significant damage to the industry a large number of potential adaptation measures were considered. Out of these a short-list of 9 potential options were selected by applying 10 evaluation criteria. Using benefit-cost analyses 3 options with positive ratios were put forward: (1) increased recommended design speeds for new tourism-related structures; (2) enhanced reef monitoring systems to provide early warning alerts of bleaching events, and, (3) deployment of artificial reefs or other fish-aggregating devices. While these options had positive benefit-cost ratios, other options were also recommended based on their non-tangible benefits. These include the employment of an irrigation network that allows for the recycling of waste water, development of national evacuation and rescue plans, providing retraining for displaced tourism workers and the revision of policies related to financing national tourism offices to accommodate the new climate realities.