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Decision and Policy Analysis Research Area – DAPA

CIAT working with the CCRIF to research potential damage caused by hurricanes and climate change

Our climate change team has recently been working in collaboration with the Caribbean Risk Insurance Facility (CCRIF).This initiative has been created to assist governments in the Caribbean region, to better adapt strategies for dealing with the economic impact of natural disasters.

Our team has been helping with the recently launched technical assistance program, in the Economics of Climate Adaption (ECA) department, carrying out analytical crop suitability work with Mckinsley and Company.

http://www.mckinsey.com/

The CCRIF is a form of risk pooling facility, owned, operated and registered in the Caribbean. To date, it is the world’s first and only regional fund utilizing parametric insurance. Historically, the discussion around Climate change has mainly been focused on mitigating climate change, however in line with increasing funds, the consensus has been shifting towards adaption.

While ECA studies were carried out in 8 countries to select the key hazards on different economic sectors, ranging from housing infrastructure, to tourism and travel, CIAT crop suitability work focused in Belize and Jamaica. Given that the ECA analysis on the agricultural sector is subject to higher uncertainties (e.g. market price volatility for crops), the results from the analysis here were handled separately.

Climate change zones for sugarcane in Belize

The impact assessment of climate change focused on 2 drivers of agriculture production, gradual change in climatic conditions (climate zone shift), but also the impact of climate change on the damage potential of extreme event  particularly hurricanes and earthquakes. For each of the selected crops, Banana, Sugarcane, Orange and Papaya, the climate change team performed two analytical steps. Our teams used CIAT crop suitability maps to determine climate zone shift impact on crop yields. They used current crop yields with different climate scenarios as key inputs, applied to calculate the yield changes in each production location. In the second step, ‘damage functions’ were used to analyze the potential increase in hurricane- induced damage to plantations, as a result of climate change.

Our analysis show that change in yields as a result of climate zone shift is the main driver of the change in production volume. The analysis showed that potential changes in net production volume 2030 vs. 2009 rang from -45% (sugar cane in Belize) to +10% Banana in Belize. Yet crop yields are not set to change uniformly across countries- while some regions get significantly less suitable for specific crop types, others might not be affected as much.

Comparative analysis showed that although hurricanes damaging yield production ratios remains a threat, the comparative effect of ‘shifting climate zones’ on production has been forecasted as significantly more dangerous.

The link to this paper can be found at  http://www.ccrif.org/sites/default/files/publications/ECABrochureFinalAugust182010.pdf

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