Stijn Schep

Reef Degradation and Tourism The macroeconomic costs of climate change on Bonaire

Part of the larger The impacts of climate change on Bonaire (2022-present) report available here 

 

Summary

This paper studies the macroeconomic consequences of climate-induced reef degradation for Bonaire. Bonaire’s coral reefs progressively face the unavoidable reality of climate change, with its effects increasing in severity. Degradation of the island’s reef ecosystems may affect annual tourism arrivals as the reefs form one of the main attractions for visitors to Bonaire. Consequently, the industries that rely on tourist expenditures will suffer and thus the local economy. Coral reef-based tourism creates a unique opportunity to investigate the impacts of global warming on the macroeconomic performance of Bonaire. This paper employs the emission scenarios SSP1-1.9, SSP2-4.5, SSP3-7.0, and SSP5-8.5 of the AR6 IPCC 2021 to study the effects of coral reef degradation on the social carrying capacity of the coral reefs. Subsequently, the potential effects of reduced dive tourism and the induced effects of a change in tourism demand are translated into changes in sectoral outputs by employing input-output analysis. Coral reef degradation is expected under all scenarios, except the SSP1-1.9 scenario where a slight recovery of coral reefs is possible.

This study finds a contraction in GDP between 25 USDm and 173 USDm by 2050 (between 2 to 18 percent of GDP in 2050), depending on the applied climate scenario. Moreover, a tourism income multiplier of 0.85x is found, which indicates a strong interlinkage between tourism income and the local economy, as from every dollar of tourism income 85% enters the local economy. This indicates that any losses in tourism demand will significantly result in macroeconomic damages for Bonaire. It can thus be expected that climate change will have a substantial impact on coral reefs as a vital tourism asset on Bonaire, with more extreme emission scenarios leading to stronger negative effects on the local economy.

Date
2022
Data type
Research report
Theme
Education and outreach
Research and monitoring
Geographic location
Bonaire

The Impacts of Climate Change on Bonaire - Synthesis Report

Part of the larger report available here.

 

Executive summary

Small islands are particularly vulnerable to climate change because of their fragile ecosystems, small economies, and often extensive, low-lying coastal areas. Therefore, small islands, such as present in the Caribbean Netherlands, are expected to suffer excessively from rising temperatures, changes in precipitation, sea-level rise, coral bleaching, cyclones, droughts and floods. Despite this widespread conviction, scientific evidence of these effects in the Caribbean Netherlands is scarce, and as a result, limited adaptation strategies are developed or implemented by local and Dutch governments. 

In this study, an analysis is conducted assessing the impacts of climate change for the island of Bonaire. Given the uncertainty regarding the actual level of climate change in the future, four universally recognised scenarios are simulated, ranging from an optimistic scenario “SSP1-1.9” (corresponding to a mean temperature rise of 1.4°C at the end of the 21st century relative to pre-industrial levels), which assumes climate change will  modestly increase relative to current levels, to a pessimistic scenario “SSP5-8.5” (corresponding to a mean temperature rise of 4.4°C at the end of the 21st century relative to pre-industrial levels), which suggests very high levels of climate change. Impacts are measured and reported at different moments in time, mainly looking at the years 2050 and 2150, representing short-term and long-term effects of climate change, respectively. A mix of methods from various scientific disciplines are used to estimate the impacts of climate change, including climate and flood models, ecological-economic models, as well as social-science methods such as social media analysis, participatory mapping and key-informant interviews. Although the subcomponents of the study are systematically aligned and integrated, four topics can be distinguished: the estimation of the biophysical impacts, the modelling of economic effects, the identification of socio-cultural effects, and the exploration for potential adaptation options. 

First, we analyse the expected bio-physical and environmental changes associated with different climate projections. The applied flood model simulations reveal that, already by 2050, sea-level rise will cause permanent inundation of parts of the low-lying nature reserves of the saliñas, Lac Bay and Klein Bonaire, thereby altering the extent and dynamics of these areas. Increasing storms are expected to double this inundated area, with an estimated surface of around 8 km2 comprising both permanently and temporarily flooded areas. With climate change increasing over time, sea-level rise and coastal storm inundation will further expand the flooded surface area of Bonaire by 2150, ranging from 14.3 km2 to 32.2 km2, depending on the climate scenario. These flood simulations clearly identify Bonaire's high-risk built-up areas: Belnem and other areas in Kralendijk. But this is not the complete picture; coral reefs are extremely vulnerable to temperature increase, acidification and extreme storms, and our study predicts significant declines of the reef health index of the coral reefs of Bonaire in three of the four climate scenarios already by 2050. Since coral reefs currently act as a natural buffer against waves on Bonaire, the loss of this important ecosystem will further amplify the flooding caused by climate change. 

Second, we estimate the expected economic effects associated with climate change, including impacts on economic development, the built environment and infrastructure. The economic impact is mainly felt through damage costs caused by floods as well as negative effects on tourism caused by the loss of corals. Storms are expected to largely affect Kralendijk and Belnem under the worst climate scenario, resulting in estimated damage costs of US$317 million by 2050. Since permanently inundated buildings are not included in the damage costs projections, these costs are likely to be on the conservative side. As a large part of the damaged structures are in key areas, and numerous coastal and southern roads on the island will be unusable, flood hazards will not only disrupt entire neighbourhoods but also make it impossible for emergency services to reach these areas and buildings. Moreover, we estimate that the economy will be negatively affected by the loss of coral reefs since numerous valuable dive sites will be severely degraded. In the worst climate scenario, coral reef degradation may lead to a reduction of quality dive sites from 86 to 12 and a subsequent reduction in dive tourist arrivals of more than 100 thousand visitors by 2050, causing a contraction in Bonaire’s economy of roughly 25%.

Third, we identified the expected socio-cultural effects associated with the climate change in terms of loss of cultural heritage and health impacts. The tangible cultural impact is felt through the permanent flooding of key locations with cultural significance for Bonaireans, such as the slave huts and the house at Boca Slagbaai. Loss of cultural heritage may have severe impacts on society, as it may lead to a decline in cultural identity and social cohesion. The intangible cultural impact of extreme weather events and rising temperatures includes pressures on the traditional ways of life of Bonaire, including fishing, agriculture, and festivities. Additionally, numerous experts on Bonaire reported that the effects of climate change on Bonaireans’ health, such as changes in vector-borne disease incidence and heat-related stress, are already observed and are likely to increase with climate change. This impact is further magnified with the ageing of the population on Bonaire, making the people even more susceptible to heat-related stress disorders. 

Fourth, we evaluate several adaptation measures to understand which management alternatives Bonaire could implement to cope with the negative consequences of climate change. Potential adaptation strategies include nature-based solutions such as the conservation of coral reefs and the restoration of coastal vegetation, which contribute to the prevention of flooding. Moreover, decision-makers should consider investing in various heat mitigation strategies, such as climate-sensitive building designs, artificial and natural shading, as well as information programmes to educate the population on how to protect themselves from high-temperature exposure. We conclude that, although the impacts of climate change necessitate immediate action, decision-makers should also focus on the longer term, such as 2150 and beyond, as the effects of climate change will worsen significantly over time. 

Since our study did not address all effects of climate change and since climate research with regional and local precision is still in development, the impacts presented in our study can be regarded as preliminary lower-bound estimates. In other words, additional research may generate estimates of even more severe impacts of climate change in Bonaire. In addition, we like to emphasise that there is little knowledge about the effects of climate change in the Dutch Caribbean at the present time. This study is the first attempt to map and quantify a broad range of climate change effects for Bonaire, which is only one of the six islands in the Caribbean Netherlands. Because the research results are unique for Bonaire, we recommend conducting similar studies for the other Caribbean islands in the Kingdom of the Netherlands. 

 

Date
2022
Data type
Other resources
Theme
Education and outreach
Research and monitoring
Geographic location
Bonaire