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The Caribbean and climate change: The costs of inaction

Authors:
The Caribbean and Climate
Change: The Costs of Inaction
Ramón Bueno
Stockholm Environment Institute-U.S.
www.sei-us.org
www.sei-us.org/climate-and-energy/climate-economics.html
Climate Change:
From the Science to Action
Scientific consensus on climate change
The debate now is about the economic analysis
Wide range of economic models
Uncertainty, catastrophic risks,
Discount factors, growth rates, technology
Need for Climate Action
Some say acting now will be costly
Climate inaction will be even more costly
Global trends and pressures
World’s 6 billion people: 9B by 2100
Right to development
Caribbean Vulnerability
Infrastructure losses and coastal erosion
Tourism loss
Greater hurricane, storm surge damages
Salt water intrusions into fresh-water aquifers
Agriculture and ecosystems losses
Impaired health (flooding, sanitation, diseases, heat stress)
Challenges:
Ecological
Social
Economic
Security
Food
Energy
Caribbean Costs of Inaction
“For just these three categories—
increased hurricane damages, loss of
tourism revenue, and infrastructure
damages—the Caribbean’s annual cost
of inaction is projected to total $22
billion annually by 2050 and $46
billion by 2100. These costs represent
10 percent and 22 percent, respectively,
of the current Caribbean economy.“
Action vs. Inaction Scenarios
2050 2100
Annual Average Temperature Increase (in degrees above year 2000 temperature)
Low-Impact F 1.1 2.2
C0.61.2
High-Impact F 4.9 9.7
C2.75.4
Sea-Level Rise (above year 2000 elevation)
Low-Impact in 3.5 7.1
cm 8.9 18.0
High-Impact in 22.6 45.3
cm 57.4 115.1
Climate Change Scenarios
Total Caribbean Climate Change Scenarios: $US Billions
(billions of 2007 dollars; percentages based on 2004 GDP)
LOW-
IMPACT 2050 2100
Storms 2.0 2.1
Tourism 0.8 1.6
Infrastructure 2.9 5.9
Total $5.7 $9.6
% Current GDP 2.7% 4.5%
HIGH-
IMPACT 2050 2100
Storms 4.7 10.0
Tourism 4.0 8.0
Infrastructure 18.9 37.8
Total $27.6 $55.8
% Current GDP 13.0% 26.3%
Caribbean Cost of Inaction:
Total Caribbean Cost of Inaction ($US Billions)
(billions of 2007 dollars; percentages based on 2004 GDP)
2050 2100
Storms 2.8 7.9
Tourism 3.2 6.4
Infrastructure 15.9 31.9
Summary: Costs of Inaction $21.9 $46.2
in billions of 2007 dollars
as percent of Caribbean GDP 10.3% 21.7%
Cost of Inaction by Island
Cost-of-Inaction: % of 2004 GDP 2050 2100
Anguilla 20.7 41.4
Antigua & Barbuda 25.8 58.4
Aruba 10.1 20.1
Bahamas 13.9 31.7
Barbados 13.9 27.7
British Virgin Islands 9.0 18.1
Cayman Islands 20.1 53.4
Cuba 12.5 26.8
Dominica 34.3 77.3
Dominican Republic 19.6 40.3
Grenada 46.2 111.5
Guadeloupe 4.6 9.5
Haiti 61.2 123.2
Jamaica 27.9 56.9
Martinique 3.8 8.1
Montserrat 21.7 49.5
Netherlands Antilles 16.1 36.0
Puerto Rico 2.8 6.0
Saint Kitts & Nevis 35.5 89.3
Saint Lucia 24.3 49.1
Saint Vincent & the Grenadines 23.6 47.2
Trinidad & Tobago 8.0 16.0
Turks & Caicos 37.9 75.9
U.S. Virgin Islands 14.2 32.4
TOTAL CARIBBEAN 10.3% 21.7%
CaribbeanCostofInaction‐‐by%TotalImpactin210
0
(millions of 2007 dollars; percentages based on 2004 GDP)
GDP Storms Tourism Infrastr. Total Storms Tourism Infrastr. Total
Haiti 4,378$ 2.4% 0.8% 120.0% 123.2% 107 36 5,252 5,394$
Grenada 391$ 63.0% 7.8% 40.7% 111.5% 247 31 159 436$
SaintKitts&Nevis 359$ 60.5% 8.5% 20.3% 89.3% 217 31 73 321$
Dominica 249$ 28.8% 5.0% 43.5% 77.3% 72 12 108 193$
Turks&Caicos 181$ 0.0% 52.3% 23.6% 75.9%  95 43 137$
Antigua&Barbuda 750$ 22.7% 16.4% 19.3% 58.4% 170 123 145 438$
Jamaica 8,773$ 3.3% 6.8% 46.8% 56.9% 292 593 4,106 4,991$
CaymanIslands 2,204$ 43.7% 6.3% 3.5% 53.4% 963 138 76 1,178$
Montserrat 34$ 20.2% 8.0% 21.3% 49.5% 7 3 7 17$
SaintLucia 699$ 1.6% 12.1% 35.4% 49.1% 11 85 247 343$
SaintVincent&theGrenadines 371$ 0.0% 9.5% 37.7% 47.2%  35 140 175$
Anguilla 120$ 0.0% 25.5% 15.9% 41.4% 0 31 19 50$
DominicanRepublic 20,519$ 4.0% 5.6% 30.8% 40.3% 814 1,144 6,318 8,276$
NetherlandsAntilles 2,705$ 12.6% 11.0% 12.5% 36.0% 341 296 338 975$
U.S.VirginIslands 3,104$ 13.3% 13.6% 5.5% 32.4% 414 422 170 1,005$
Bahamas 5,786$ 12.9% 10.8% 7.9% 31.7% 748 627 458 1,833$
Barbados 2,538$ 0.1% 11.0% 16.6% 27.7% 1 280 422 704$
Cuba 38,065$ 5.8% 2.0% 19.1% 26.8% 2,197 761 7,256 10,214$
Aruba 2,347$ 0.0% 13.8% 6.3% 20.1%  323 149 472$
BritishVirginIslands 967$ 0.4% 14.2% 3.4% 18.1% 4 138 33 175$
Trinidad&Tobago 12,610$ 0.0% 1.0% 15.0% 16.0% 0 127 1,892 2,020$
Guadeloupe 8,623$ 1.2% 0.6% 7.7% 9.5% 101 52 667 820$
Martinique 9,896$ 1.4% 0.7% 6.0% 8.1% 137 67 596 800$
PuertoRico 86,726$ 1.2% 1.1% 3.7% 6.0% 1,055 970 3,202 5,227$
TOTALCARIBBEAN 212,397$ 3.7% 3.0% 15.0% 21.7% 7,899$ 6,418$ 31,876$ 46,193$
%ofGDP $Million
CaribbeanCostofInaction‐‐by%TourismImpactin2100
(millions of 2007 dollars; percentages based on 2004 GDP)
GDP Storms Tourism Infrastr. Total Storms Tourism Infrastr. Total
Turks&Caicos 181$ 0.0% 52.3% 23.6% 75.9%  95 43 137$
Anguilla 120$ 0.0% 25.5% 15.9% 41.4% 0 31 19 50$
Antigua&Barbuda 750$ 22.7% 16.4% 19.3% 58.4% 170 123 145 438$
BritishVirginIslands 967$ 0.4% 14.2% 3.4% 18.1% 4 138 33 175$
Aruba 2,347$ 0.0% 13.8% 6.3% 20.1%  323 149 472$
U.S.VirginIslands 3,104$ 13.3% 13.6% 5.5% 32.4% 414 422 170 1,005$
SaintLucia 699$ 1.6% 12.1% 35.4% 49.1% 11 85 247 343$
Barbados 2,538$ 0.1% 11.0% 16.6% 27.7% 1 280 422 704$
NetherlandsAntilles 2,705$ 12.6% 11.0% 12.5% 36.0% 341 296 338 975$
Bahamas 5,786$ 12.9% 10.8% 7.9% 31.7% 748 627 458 1,833$
SaintVincent&theGrenadines 371$ 0.0% 9.5% 37.7% 47.2%  35 140 175$
SaintKitts&Nevis 359$ 60.5% 8.5% 20.3% 89.3% 217 31 73 321$
Montserrat 34$ 20.2% 8.0% 21.3% 49.5% 7 3 7 17$
Grenada 391$ 63.0% 7.8% 40.7% 111.5% 247 31 159 436$
Jamaica 8,773$ 3.3% 6.8% 46.8% 56.9% 292 593 4,106 4,991$
CaymanIslands 2,204$ 43.7% 6.3% 3.5% 53.4% 963 138 76 1,178$
DominicanRepublic 20,519$ 4.0% 5.6% 30.8% 40.3% 814 1,144 6,318 8,276$
Dominica 249$ 28.8% 5.0% 43.5% 77.3% 72 12 108 193$
Cuba 38,065$ 5.8% 2.0% 19.1% 26.8% 2,197 761 7,256 10,214$
PuertoRico 86,726$ 1.2% 1.1% 3.7% 6.0% 1,055 970 3,202 5,227$
Trinidad&Tobago 12,610$ 0.0% 1.0% 15.0% 16.0% 0 127 1,892 2,020$
Haiti 4,378$ 2.4% 0.8% 120.0% 123.2% 107
 36 5,252 5,394$
Martinique 9,896$ 1.4% 0.7% 6.0% 8.1% 137 67 596 800$
Guadeloupe 8,623$ 1.2% 0.6% 7.7% 9.5% 101 52 667 820$
$
TOTALCARIBBEAN 212,397$ 3.7% 3.0% 15.0% 21.7% 7,899$ 6,418$ 31,876$ 46,193$
%ofGDP $Million
“For just these four categories — loss of tourism revenue, increased
hurricane damages, at-risk residential real estate, and increased
electricity costs — the annual costs of inaction are projected to total $92
billion by 2050 and $345 billion by 2100, figures that respectively would
constitute 2.8 percent and 5.0 percent of the state’s projected Gross
State Product “ - Stanton and Ackerman, November 2007
For the United States the cost of climate inaction in four cost
categories – increased hurricane damages, residential real
estate losses due to sea level rise, increased energy costs,
and water supply costs – will add up to $1.6 trillion (in today’s
dollars), more 1.5 percent, of U.S. output per year by 2100.
-Ackerman and Stanton, May 2008
Costs of Inaction: Florida, USA
Cost of Inaction in Perspective
Costs of Inaction *
2050 2100
Percent of United States GDP 1.20% 1.55%
Percent of Florida GSP 2.8% 5.0%
Percent of Caribbean GDP ** 10.3% 21.7%
* Not an exact accounting of similar categories of losses and damages
** Based partly on a different methodology
Leading the Way
Good costs: innovation, efficiency and growth
Good costs: innovation, efficiency and growth
Avoid damages
Avoid damages and
and enable development
enable development
Climate action is
Climate action is life insurance for the planet!
life insurance for the planet!
Stockholm Environment Institute
Independent international research organization working on sustainable
development.
HQ in Stockholm, Sweden with centers in the US, UK, Estonia, and
Thailand.
Applied scientific research: bringing science to policy makers.
170 staff (25 in the U.S.).
Funders: Swedish and US Governments, UNDP, UNEP, UNFCCC,
foundations, national & local governments and NGOs
US Center of SEI is an independent non-profit research institute affiliated
with Tufts University in Massachusetts.
Web sites: www.sei-us.org and www.sei.se
... Along the optimal trajectory though, and provided that the endowment in natural capital and its contribution to production is important enough, adaptation actions will be undertaken in conjonction with, or substitution for, migration in order to impede this degradation process. In the second part of the analysis, we calibrate the general model for Caribbean SIDS, the only region for which we have data to evaluate the rate of degradation of natural capital (Bueno et al., 2008). ...
... In particular, we found no paper in the literature attempting to estimate the cost and benefit of adaptation for SIDS. 19 In order to calibrate degradation rates, we will make use of estimates of climate damages taken from Bueno et al. (2008). In this report, the authors focus on Caribbean SIDS. ...
... Table 3 summarizes these parameter values that are country-specific. 27 Last but not least, we calibrate the rate of degradation of natural capital, δ, using the technical report by Bueno et al. (2008). In their study, they consider two time horizons, 2050 and 2100, and the two emission scenarios discussed above. ...
Article
This paper examines the adaptation policy of Small Island Developing States (SIDS) facing climate change. We consider a dynamic economy with the following ingredients: (i) natural capital is an input in local production that is degraded as a result of climate change; (ii) the government has two instruments to cope with climate-related damages: it can adjust the population size thanks to migration policies and/or it can undertake adaptation measures in order to slow the degradation of natural assets; (iii) expatriates send remittances back home. We identify two critical conditions on the fundamentals of the economy that helps understand the features of the optimal policy. We especially show that in most situations, the migration policy is a valuable instrument. Calibrating the model for Caribbean SIDS, we find that the optimal policy of the Caribbean region displays heterogeneity, that is explained by the different degradation rate, population size, and endowment in natural capital. We also highlight that the higher the climate damages, the higher the incentives to conduct an active adaptation policy, combining conventional adaptation actions and migration.
... Therefore, seismic hazards are not a major concern for the island population. In contrast, anthropogenically driven global warming caused by the release of CO 2 from fossil fuel combustion and methane release primarily related to the mass production of meat and unfreezing of permafrost soils, starts showing its effects throughout the Caribbean through a combination of processes (e.g., Bueno et al., 2008;Catarious and Espach, 2009;OECD 2014). As it is widely accepted by now, global warming causes the melting of mountain glaciers, the Greenland ice sheet, and the Antarctic ice sheet, which in turn causes eustatic sea level rise (Nerem et al., 2018). ...
... Global warming has an important impact on the islands in the Caribbean (Bueno et al., 2008), because sea level is rising (Nerem et al., 2018;Orejarena-Rondón et al., 2019) and SST are increasing (Schmidt et al., 2006;Glenn et al., 2015). As shown in Figure 9a, SST increased at least by~0.5°C ...
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The Colombian island of San Andrés is a popular tourist destination located about 195 km offshore of the east coast of Nicaragua in the southwestern Caribbean Sea. Together with Providencia and Santa Catalina, San Andrés is part of the UNESCO Seaflower Biosphere Reserve. With a 26 km ² surface area and 78 000 inhabitants, San Andrés is one of the most densely populated islands in the Caribbean with on average ∼ 3000 inhabitants/km ² . The majority of the population and the mass tourism are concentrated in the low-elevation (0.5–6 m) areas, particularly in the north and along the east coast of the island. These areas are prone to flooding during storm events such as hurricanes Eta and Iota in 2020. A review of the geological, environmental and the socio-economic situation of the island, and the record of tropical cyclones since 1911, shows why the local population has become increasingly vulnerable to storm events and rising sea level. Tropical cyclones may form locally in the southwestern Caribbean or originate in the eastern Caribbean/Atlantic Ocean. The latter tend to be stronger and cause more damage when they reach San Andrés. The HURDAT2 dataset shows that the frequency of storm events affecting San Andrés has increased in recent decades, with six storms over the past 20 years, including three category 4-5 hurricanes since 2007. Increasing storm frequency and intensity may be linked to increasing sea surface temperatures caused by anthropogenic global warming, although the changes described here may be limited to a relatively small geographical region, as opposed to representing basin wide tropical cyclone behavior. The growing population density since the 1950s has augmented the potential for disaster.
... While geographic concentration enables lenders to overcome imperfect information problems, banks may face substantial bank losses if they serve an affected community (Collier et al. 2011). Banks from such countries also face higher counterparty risks because less households and firms are insured against damages caused by extreme weather shocks, lower quality of infrastructure and smaller social safety nets compared to advanced and large countries (Lashley 2012, Bueno et al. 2008, Pelham et al. 2011). ...
... Como resultado de este incremento en las emisiones de GEI especialmente las basadas en carbono, se espera que los impactos socioeconómicos negativos sean mayores en las áreas más vulnerables debido a su exposición a los riesgos climáticos (Bueno et al., 2008) o bien, causado a su incapacidad para abordar los riesgos de adaptarse a estas situaciones cambiantes en las economías tanto desarrollados como emergentes (Hallegatte et al., 2018;Hsiang et al., 2017). ...
Thesis
Full-text available
Las empresas han iniciado en la última década la implementación de distintas prácticas hacía la mejora de su desempeño de carbono para atenuar su impacto en el cambio climático. Sin embargo, la efectividad de estas prácticas en la reducción de las emisiones de carbono continúa siendo debatible. Esta investigación explora el efecto que tiene cinco prácticas de gobernanza climática, i.e. la supervisión de la junta, la ejecución eficaz, la divulgación pública, la contabilidad de emisiones, y la planeación estratégica sobre el desempeño de carbono en las empresas de la Bolsa Mexicana de Valores del 2014-2018. Basado en la perspectiva de los grupos de interés, así como en la lógica institucional, se argumenta teóricamente que las presiones por una mejora en el desempeño climático de las empresas promueven una transición de lógica económica hacia una sustentable, la cual contribuya a la reducción de las emisiones de carbono e incrementar la legitimidad de sus operaciones. Para comprobar las hipótesis de investigación, se realiza un análisis longitudinal mediante Mínimos Cuadrados Generalizados Factibles (FGLS) con datos recabados de Bloomberg, Thomson Reuters, y los reportes de sustentabilidad. Los hallazgos sugieren que sólo la divulgación pública tiene un efecto positivo en la reducción de las emisiones de carbono, mientras que la supervisión de la junta, la ejecución eficaz, y la planeación estratégica incrementan dichos gases. Esta evidencia sugiere la necesidad de integrar de manera substantiva las prácticas de gestión climáticas por parte de los responsables de la toma de decisión, evitando así la impostura verde (greenwashing) para una efectiva implementación. De esta forma se contribuye a la identificación de aquellos mecanismos que coadyuven a la reducción de las emisiones de carbono dentro de la literatura de la gestión ambiental.
... El Caribe es especialmente vulnerable ante estos cambios, pues más del 50% de su población vive a lo largo de la costa y aproximadamente el 70% en ciudades costeras (Reyer et al., 2017). Se estima que ante el incremento del nivel del mar (excluyendo los daños asociados a fenómenos meteorológicos), y la falta de accionar por parte de los gobiernos a fin de mitigar los efectos del cambio climático, los países que conforman esta subregión registrarían pérdidas anuales en infraestructura de aproximadamente 22.000 y 46.000 millones de dólares para 2050 y 2100, respectivamente (Bueno et al., 2008). ...
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La presente investigación analiza el impacto del cambio climático en el PIB de la región de América Latina y el Caribe. El análisis se hace a través de un modelo estadístico de regresión multivariable considerando las variables climatológicas de temperatura, precipitación y superficie forestal. Asimismo, a fin de evaluar el comportamiento del modelo respecto al crecimiento poblacional, se incluye el indicador de población total del Banco Mundial. Para realizar el modelo de regresión se utilizaron los datos históricos comprendidos entre los años 2000 y 2020. Los resultados obtenidos permiten concluir que existe una alta correlación entre las variables climatológicas escogidas y el crecimiento económico de la región.
... Barker [31], argued that an increase in Atlantic hurricane activity and the potential threat of intense tropical hurricanes in the future, poses a severe threat to the Caribbean region and its development. Forecast models show climate change would be responsible for a doubling of cyclone losses from US$26 billion per year to $53 billion by 2100 [32,33]. ...
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Caribbean Small Island Developing States (SIDS) is one of the most vulnerable regions in the world to the impacts of climate change. The region has prioritized adaptation to climate change and has implemented many adaptation actions over the past 20 years. However, the region is becoming increasingly vulnerable to the impacts of tropical cyclones (TC). This paper analyses the impacts of TC on the region between 1980 to 2019. It aims to examine the economic loss and damage sustained by the region, identify the sectors most impacted, and ascertain the perspectives of key stakeholders on the factors that hinder building resilience. Statistical analysis techniques and semi-structured interviews were to unpack and understand the dataset. The paper finds that economic loss and damage has gradually increasing between 1980 to 2009 with a drastic increase between 2010 to 2019. The paper highlights the agriculture, housing, transport, and utility sectors as the most impacted. The findings also call to attention the need for increased access to adaptation financing for SIDS, the disadvantages of the income status that hinders building resilience, and the need for increased Early Warning Systems. The paper recommends revising the per capita national income as an eligibility criterion for accessing concessional development finance assistance, a comprehensive EWS for the countries in the region, and consideration of debt relief for countries affected by TC.
... Tal necesidad de gasto revela la vulnerabilidad de la infraestructura de transporte de México, una situación probablemente similar a la de otros países en desarrollo. La inversión en infraestructura resiliente al cambio climático es importante, porque se proyecta que el costo anual de la inacción con respecto a la infraestructura será de US$16 millardos para el Caribe en el año 2050 (Bueno et al. 2008 (Reyer et al., 2017). Se espera que el cambio climático tenga un profundo impacto en un amplio espectro de sistemas de infraestructura (IPCC, 2014), así como en los servicios de atención médica y emergencias y el entorno edificado. ...
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There is a dearth of studies characterizing historical sea level variability at the local scale for the islands in the Caribbean. This is due to the lack of reliable long term tide gauge data. There is, however, a significant need for such studies given that small islands are under increasing threat from rising sea levels, storm surges, and coastal flooding due to global warming. The growing length of satellite altimetry records provides a useful alternative to undertake sea level analyses. Altimetry data, spanning 1993–2019, are used herein to explore multi-timescale sea level variability near the south coast of Jamaica, in the northwest Caribbean. Caribbean basin dynamics and largescale forcing mechanisms, which could account for the variability, are also investigated. The results show that the average annual amplitude off the south coast of Jamaica is approximately 10 cm with a seasonal peak during the summer (July–August). The highest annual sea levels occur within the Caribbean storm season, adding to the annual risk. The annual trend over the 27 years is 3.3 ± 0.4 mm/yr when adjusted for Glacial Isostatic Adjustment (GIA), instrumental drift, and accounting for uncertainties. This is comparable to mean global sea level rise, but almost twice the prior estimates for the Caribbean which used altimetry data up to 2010. This suggests an accelerated rate of rise in the Caribbean over the last decade. Empirical Orthogonal Function (EOF) and correlation analyses show the long-term trend to be a basin-wide characteristic and linked to warming Caribbean sea surface temperatures (SSTs) over the period. When the altimetry data are detrended and deseasoned, the leading EOF mode has maximum loadings over the northwest Caribbean, including Jamaica, and exhibits interannual variability which correlates significantly with a tropical Pacific-tropical Atlantic SST gradient index, local wind strength, and the Caribbean Low Level Jet (CLLJ). Correlations with the El Niño Southern Oscillation (ENSO) in summer, seen in this and other studies, likely arise through the contribution of the ENSO to the SST gradient index and the ENSO’s modulation of the CLLJ peak strength in July. The results demonstrate the usefulness of altimetry data for characterizing sea level risk on various timescales for small islands. They also suggest the potential for developing predictive models geared towards reducing those risks.
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India's distinctive monsoon weather system, which is dominated by the rainy season, is influenced by the Himalayan hills, the center of plateau, the Ghats of west and east, and the ocean that surrounds the country. The finer regional aspects, as well as climate changes occurring on sub-seasonal and lower geographical scales, cannot, however, be simulated by the global models. The Hadley Centre in the UK developed PRECIS, a regional climate model with a resolution of 50 km x 50 km, for the study and describes the simulations and projections of the climate for the year 2030 while keeping these constraints in mind. Utilizing a hierarchy of models also entails combining global circulation models with regional models with a greater level of detail for a specific location. The General Circulation Models (GCMs) that are currently being used worldwide to estimate future climate change are briefly described in this work. Climate change will have an impact on aquatic life, such as fish, as well as their ecosystems. The abundance, movement patterns, and mortality rates of wild fish stocks will all be impacted by higher temperatures, as well as the species that can be farmed in particular locations. These climate consequences on fish will have social and economic repercussions for those who depend on fisheries and aquaculture, such as workers, coastal communities, and fish eaters. Mumbai, Chennai, Kolkata, and other coastal cities have all participated in the current study. Studies on longer timescales, such as glacial to interglacial cycles, have made use of Earth Models of Intermediate Complexity. It takes numerous phases to generate regional climatic scenarios for climate impact studies, and each step is accompanied by a variety of modelling uncertainties. Global climate models often referred to as generation circulation models and usually, a geographical resolution in the range of 250 km to 300 km, are the primary tools for assessing climate change.
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Although it has contributed very little to global air pollution, Martinique - like the Caribbean micro-island territories - will be hard hit by climate change in general and sea level rise in particular.Optimistic forecasts predict that Martinique will lose 5% of its area by the end of this century, while pessimistic forecasts indicate that it will lose 9 to 10%. Whatever the situation, it will be necessary to set up a real policy of protection of the populations living on the coastal margins, even of the displacement of the latter. The example of the commune of Prêcheur (North of Martinique), a precursor in this field, will be deciphered, because it is likely to become a real model.
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