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Rising seas, rising costs: Climate impacts on Cook Islands economy

Monday 2 September 2024 | Written by Losirene Lacanivalu | Published in Economy, Environment, National

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Rising seas, rising costs: Climate impacts on Cook Islands economy
Pictured is the scene of destruction on the island of Aitutaki after Cyclone Pat in 2010. Tropical Cyclone Pat affected 12 per cent of the country’s total population and 78 per cent of the population on the affected island. The recovery costs were equivalent to 3 per cent of GDP. 24090106

Cook Islands’ topography and remoteness make it highly vulnerable to the impacts of climate change, states the latest Pacific Economic Monitor – August 2024: Building Resilience the Pacific Way report.

According to the report, under Building Climate and Disaster Resilience in the South Pacific, the lead authors Lily-Anne Homasi, Ana Isabel Jimenez, Cara Tinio, and Jennifer Umlas state that the country’s topography and remoteness make it highly vulnerable to the impacts of climate change.

“Disasters include weather extremes such as cyclones and coastal flooding, excessive rainfall, landslides, and droughts, all exacerbated by climate change and sea level rise,” they said.

The report also showed that the impact of disaster events on gross domestic product (GDP) could be staggeringly high, offsetting development gains.

It stated that in 2010, Tropical Cyclone Pat affected 12 per cent of the country’s total population and 78 per cent of the population on the affected island. The recovery costs were equivalent to 3 per cent of GDP.

The Pacific Catastrophe Risk Assessment and Financing Initiative indicates that average annual losses from tropical cyclones, earthquakes and tsunamis were equivalent to 2 per cent of GDP in the Cook Islands.

The probable maximum losses for an event occurring once in 50 years are estimated at $56.8 million for the Cook Islands, it adds. It also emphasised that Northern Cook Islands are low-lying atolls, and the southern group composed of volcanic islands with low-lying coastal areas and shallow lagoons.

Cook Islands News has contacted Wayne King, director of Climate Change Cook Islands, for comments on this report.

The report further stated that strategies to grow the economy and build people’s resilience to climate change and disasters have been at the forefront of the Cook Islands development agenda.

To mitigate these risks and strengthen the resilience of the Cook Islands to climate change, the government – with support from its development partners –spearheaded policy initiatives such as establishing a legal framework to guide climate change interventions.

They are in line with Te Kaveinga Nui – National Sustainable Development Plan, the proposed Sovereign Wealth Fund, investing in critical infrastructure, supporting Public Financial Management (PFM) reforms and building an agile public service.

In terms of building an agile public service, the report explains that the country has an acute labour shortage issue where Cook Islanders who are New Zealand passport holders have the tendency to move to New Zealand and Australia for work is common and could hinder the government’s ability to deliver services to the public.

“In recognition of this, the government (with support from development partners) conducted a functional review in 2023. The review emphasised the need to realign similar functions to reduce duplication and support efficiency in government services to the public – for instance, merging climate-related functions and legal and information and communication technology services. This exercise will position the Cook Islands’ public workforce to meet current and future challenges and emergencies.”

The report concluded that small island developing states of the South Pacific face various challenges due to their remote locations, small and narrow economic bases, and high vulnerability to shocks. These challenges contribute to higher production and public service delivery costs and help limit institutional capacity development and private sector growth.

It added that South Pacific governments are pursuing measures on multiple fronts to bolster resilience.

“Programmatic approaches are necessary to prioritise and coordinate multiple activities and resources in the same policy area; for instance, risk assessments can inform infrastructure investment programming and gender-responsive policy frameworks”.