Cedric Stephens | Economic losses mounting from climate impact

ADVISORY COLUMN: INSURANCE

Climate change, the condition of the island’s roads, government’s strategic priorities and legislative agenda, its response to citizens’ road complaints and small and medium enterprises were among the main points of last week’s post-Cabinet press briefing.

Minister of Education, Skills, Youth and Information, Senator Dana Morris Dixon used Hurricane Beryl to connect the first two dots. None of the two other government officials who spoke attempted to link these seemingly discrete topics.

SMEs, and other businesses, for example, face significant climate change challenges. Egg farmers report that the hurricane significantly disrupted their operations, leading to an imbalance between demand and supply that will persist for several months.

Fifteen per cent of the non-sport articles in last Wednesday’s Gleaner were directly connected to climate change. Whether this occurred because of editorial policy or by chance is unknown.

Rochelle Clayton’s reporting on transport operators’ protests about the state of the Maroon Town main road was excluded from the count. The community is located about 20 miles southwest of Montego Bay. A St Andrew non-profit’s ad for a manager to “address pressing environmental and societal challenges through the implementation of a nature-based climate solution” was also omitted. Do these cases capture the same attention as comments in traditional and social media like protests about the poor state of our roads? Of course not.

Road conditions do not exist in a vacuum. They are affected by geography, changes in the environment, design, and quality considerations. An 1812 hurricane and complaints about excessive amounts of rain and dampness by troops who used buildings in Maroon Town as barracks, for example, taught the colonial government an important lesson after two wars with the Trelawny Maroons. The environment is challenging and probably contributed to the abandonment of the location by enslavers during the mid-19th century.

The still-raging Los Angeles fires, from which some experts have tallied economic losses as high as US$250 billion, more information about the impacts of climate change and additional research, have led me to return to this subject. The threats posed by climate change must get the same level of attention as COVID-19. Barbados Prime Minister Mia Mottley clearly understands the risks that the phenomenon poses globally and to SIDS or small island developing states.

Last week’s article discussed the impacts that climate change is likely to have on the local property insurance market for 2025. Today’s will examine some of the broader impacts. It expands my May 2, 2021 article that was inspired by a Buff Bay sea wall project. The wall was designed and built to protect the shoreline of a town that many readers know.

SIDS, such as Jamaica, are disproportionately affected by climate change. They face a multitude of challenges that threaten their environmental, economic, and social stability. The impacts of climate change on SIDS are profound, encompassing rising sea levels, increased frequency and intensity of extreme weather events, and significant alterations in ecosystems and public health.

One of the most pressing concerns for SIDS is the rise in sea levels. This poses threats to many low-lying islands and coastal areas like Buff Bay.

Projections indicate that even small increases in sea levels can lead to severe coastal erosion, loss of land, and increased salinity of freshwater resources, which are critical for drinking and agriculture. The Alliance of Small Island States has advocated for limiting global temperature rise to 1.5o Celsius to mitigate these impacts, highlighting the urgent need for international action.

Average global temperatures last year, according to The New York Times, crept past the 1.5oC threshold, a key goal for climate diplomacy, raising questions how nations can stop the planet from heating up further.

Scientists say that 2024 was the warmest ever, edging out 2023, which was the warmest on record and “perhaps in the last 100,000 years”. Exceptional warm weather is driven in a large part by the continued emissions of heat trapping gases, mainly from the burning of fossil fuels.

Coral reefs, which serve as natural barriers against storm surges, are jeopardised by rising temperatures and ocean acidification, that increase the vulnerability of islands to hurricanes. SIDS in the Caribbean and other parts of the world are experiencing an increase in the frequency and intensity of extreme weather events, such as hurricanes and tropical storms.

Historical data indicates that hurricanes have already depressed GDP growth in the Caribbean by an average of 0.83 percentage point, and as climate change progresses, these impacts are expected to worsen. The economic reliance of many SIDS on tourism and agriculture makes them particularly susceptible to these climate-induced disruptions, as both sectors are heavily dependent on stable environmental conditions.

The tourism sector, which is a major source of foreign exchange for many SIDS, faces threats from extreme weather events and changing climate patterns that can deter visitors and damage infrastructure.

Public health is another critical area affected by climate change in SIDS. Changes in climate can exacerbate health vulnerabilities, leading to increased incidences of food-borne and communicable diseases, as well as mental health issues related to climate anxiety and displacement. The health systems in many SIDS are already underfunded and face significant challenges in adapting to these new health threats, further complicating their ability to respond effectively.

The impacts of climate change on SIDS, in summary, are multifaceted and severe, affecting their physical environment, economic stability, and public health. The unique geographical and socio-economic characteristics of SIDS render them particularly vulnerable, necessitating urgent local and global attention and action to mitigate the risks and support adaptation efforts and foster reliance.

The Planning Institute of Jamaica (PIOJ) reported on November 20 that the country’s economy contracted by “2.8 per cent in real value added” during the July-September 2024 quarter, relative to the corresponding quarter of 2023. The estimated out-turn for the review quarter largely reflected the adverse impact of Hurricane Beryl and other hydrological events, the PIOJ said.

The sectors mostly affected were agriculture and fisheries, mining, hotels and restaurants, electricity and water production, and transport and communication. The analysis omitted to say that Jamaica did not suffer a direct hit from Hurricane Beryl. The storm system passed to the south of the island.

If the predictions of climate scientists are accurate, it is reasonable to expect more – and worse – events like that hurricane in future years. It remains to be seen whether this subject will be discussed in the manifestoes of the political parties that will be competing for votes during the general elections scheduled for later this year.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com