Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific

Cabezon, Ezequiel; Hunter, Leni; Tumbarello, Patrizia; Washimi, Kazuaki; Wu, Yiqun

doi:10.2139/ssrn.2625426

Cited by 20 publications

(25 citation statements)

References 13 publications

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“…Using detailed expenditure survey data encompassing one-third of the nation's population, the study is able to take a micro-perspective of the household, presenting empirical evidence of hardship and vulnerability to shocks that complements the macroeconomic analysis done elsewhere (e.g. Noy 2015Noy , 2016Cabezon et al 2015). The work sheds further light on how households are facing and coping with disasters currently.…”

Section: Introductionmentioning

confidence: 99%

Household vulnerability on the frontline of climate change: the Pacific atoll nation of Tuvalu

Taupo

Cuffe

2018

Environ Econ Policy Stud

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This paper investigates the vulnerability of households to climatic disasters in the low-lying atoll nation of Tuvalu. Small Island Developing States, particularly the atoll nations, are the most vulnerable to climatic change, and in particular to sea-level rise and its associated risks. Using the most recent household surveys available, we construct poverty and hardship profiles for households on the different islands of Tuvalu, and combine these with geographic and topographic information to assess the exposure differentials among different groups using spatial econometric models. Besides the observation that poor households are more vulnerable to negative shocks because they lack the resources to respond, we also find that they are also more likely to reside in areas highly exposed to disasters (closer to the coasts and at lower elevation) and have less ability to migrate (between and within the islands).

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Section: Introductionmentioning

confidence: 99%

Household vulnerability on the frontline of climate change: the Pacific atoll nation of Tuvalu

Taupo

Cuffe

2018

Environ Econ Policy Stud

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“…Acevedo (2014)'s VAR model finds that public debt increases following major floods, but this only applies to a subset of the storms they study. Cabezon et al (2015) uses a panel VAR model to detect a worsening of the fiscal balance (solely in the first year) for small pacific island states. Melecky and Raddatz (2011) also uses a panel VAR framework and discover that on average budget deficits increase only after climatic disasters, but for lower-middle income countries the increase in deficits occurs across all types of events.…”

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confidence: 99%

Climate Vulnerability and the Cost of Debt

Kling

Lo²,

Murinde

et al. 2018

SSRN Journal

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We use indices from the Notre Dame Global Adaptation Initiative to investigate the impact of climate vulnerability on bond yields. Our methodology invokes panel ordinary least squares with robust standard errors and principal component analysis. The latter serves to address the multicollinearity between a set of vulnerability measures. We find that countries with higher exposure to climate vulnerability, such as the member countries of the V20 climate vulnerable forum, exhibit 1.174 percent higher cost of debt on average. This effect is significant after accounting for a set of macroeconomic controls. Specifically, we estimate the incremental debt cost due to higher climate vulnerability, for the V20 countries, to have exceeded USD 62 billion over the last ten years. In other words, for every ten dollars they pay in interest cost, they pay another dollar for being climate vulnerable. We also find that a measure of social readiness, which includes education and infrastructure, has a negative and significant effect on bond yields, implying that social and physical investments can mitigate climate risk related debt costs and help to stabilize the cost of debt for vulnerable countries.JEL Classification: G12, H63, Q51

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“…Longer-term impacts depend on a range of variables, but major disasters typically constitute significant economic shocks, knocking economies off course and potentially forcing them onto lower long-term growth trajectories. For example, disasters experienced in the Pacific over the period 1980-2014 reduced average trend growth in GDP from 3.3% to 2.6%, according to analysis by the International Monetary Fund (Cabezon et al 2015).…”

Section: B Disaster Risks and Development In Asia And The Pacificmentioning

confidence: 99%

Quick Guide: Disaster Risk Management and Country Partnership Strategies

2017

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Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific

Cited by 20 publications

References 13 publications

Household vulnerability on the frontline of climate change: the Pacific atoll nation of Tuvalu

Household vulnerability on the frontline of climate change: the Pacific atoll nation of Tuvalu

Climate Vulnerability and the Cost of Debt

Quick Guide: Disaster Risk Management and Country Partnership Strategies

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