* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download economic vulnerability and resilience in small island developing state
Climate governance wikipedia , lookup
Media coverage of global warming wikipedia , lookup
Scientific opinion on climate change wikipedia , lookup
Climate change in Tuvalu wikipedia , lookup
Climate change and agriculture wikipedia , lookup
Economics of global warming wikipedia , lookup
Citizens' Climate Lobby wikipedia , lookup
Public opinion on global warming wikipedia , lookup
Carbon Pollution Reduction Scheme wikipedia , lookup
IPCC Fourth Assessment Report wikipedia , lookup
Climate resilience wikipedia , lookup
Surveys of scientists' views on climate change wikipedia , lookup
Years of Living Dangerously wikipedia , lookup
Climate change adaptation wikipedia , lookup
Effects of global warming on humans wikipedia , lookup
Climate change, industry and society wikipedia , lookup
ECONOMIC VULNERABILITY AND RESILIENCE IN SMALL ISLAND DEVELOPING STATE By Professor Robert Read GLOBAL PLATFORM ON CLIMATE CHANGE, TRADE & SUSTAINABLE ENERGY February 2010 EXECUTIVE SUMMARY The economy of many developing countries, and in particular of Small Islands Developing States (SIDS) is usually characterized by thin markets, a lack of diversification in production, a high degree of economic openness and an excessive dependence on a narrow range of exports and strategic imports. Furthermore, these countries often face the challenges of a rapidly growing population, susceptibility to natural disasters, lack of economies of scale, remoteness, high transportation and communication costs and costly public administration and infrastructure. For these reasons, the economies of SIDS are usually highly vulnerable to exogenous shocks such as; fluctuation of commodity and energy prices, the erosion of preferential market access, the introduction of more stringent non-tariff barriers (including rules of origins and sanitary and phyto-sanitary conditions), and international fluctuations of interest rates. Moreover, SIDS are particularly vulnerable to the physical impacts of climate change. Indeed, their key economic sectors such as agriculture, fisheries and tourism are among the most susceptible to the impacts of climate change. Therefore, climate change threatens to exacerbate existing vulnerabilities and be an obstacle to their socio-economic development. ICTSD In this situation, SIDS have to build their economic resilience to cope with external shocks. Economic resilience is the “ability of an economy to recover from or adjust to the negative impacts of adverse exogenous shocks and to benefit from positive shocks”. In order to build their economic resilience, SIDS need to implement actions to improve their competitiveness and enhance their supply-side capacities, while targeting environmental and social goals. Trade, trade policy and rules can play an important role in enhancing and/or limiting the capacity to build economic resilience and adaptive capacities in SIDS. Indeed, through trade policy, countries could stop subsidising polluting activities and provide incentives for innovation and diffusion of green technologies, such as nonrenewable energies. Currently, however, many countries are largely subsidising highly inefficient and polluting sources of energy generation and/or “bad” agricultural practices (from an environmental and/or social perspective). Moreover, intellectual property rights could play an important role in stimulating innovation, especially in lowincome countries. Although deeper analysis needs to be conducted, some research highlights that for vulnerable developing countries to diversify their production and move up the value chain, certain IP rules will need to become more flexible. Furthermore, to prevent and respond to financial shocks, the chapters on investment in the free-trade www.ictsd.org ECONOMIC VULNERABILITY AND RESILIENCE IN SMALL ISLAND DEVELOPING STATE By Professor Robert Read agreements could contain precautionary rules (e.g. Basel rules) and specific safeguard clauses that could be activated when there are serious indications of risk. The aim of this issue paper is to explore how trade policies and rules can contribute to reduce the economic vulnerability of SIDS and make them more resilient to external shocks, through the enhancement of their supply-side capacities and capacity to adapt to climate change. The paper first defines the concept of economic resilience and climate change adaptation and identifies the major characteristics and challenges of SIDS with regard to international trade and climate change. The paper then sets up the links between economic resilience, climate change adaptation and trade policy. Finally, it discusses the role of trade policy in facilitating and/or limiting economic resilience and adaptation to climate change in SIDS. Professor Robert Read is Senior Lecturer at the Department of Economics, Lancaster University Management, UK. ICTSD Programme on Competitiveness and Sustainable Development, Issue paper No. 11, February 2010. The full study will be available at http://ictsd. org/climate-change/adaptation/ Through trade policy, countries could stop subsidising polluting activities and provide incentives for innovation and diffusion of green technologies, such as non-renewable energies. 1. Briguglio, Lino, Cordina, Gordon, Farrugia, Nadia, and Vella Stephanie (May 2008). Economic Vulnerability and Resilience. Concept and Measurements. P.5, Research Paper No. 2008/55 United Nations University, World Institute for Development Economic Research. ISSN: 1816-6970 ICTSD www.ictsd.org