World Bank (2021) reports estimates of the annual average losses (AALs) in Caribbean countries from four different types of natural disaster, made by the United Nations Office for Disaster Risk Reduction, using estimates of exposure to hazards and assumptions of asset vulnerability. Hurricanes are the largest source of risk for most Caribbean countries, with the Bahamas facing AALs from hurricanes of 4.8 percent of GDP, Antigua and Barbuda 3.8 percent of GDP and Dominica 2.7 percent of GDP. Detailed country risk profiles prepared by the World Bank for four Caribbean countries provide estimates of both the AAL and Probable Maximum Loss (PML)<sup>7</sup> for each country. Single family buildings are the category of asset which suffers the largest losses in each country—between 20 percent and 30 percent of AALs (World Bank, 2021, p46).

Damages caused by tropical cyclones are likely to increase over the course of the 21<sup>st</sup> century because of global warming. Walsh et al (2016) review research on tropical cyclones and climate change. They argue that, while we still lack a generally accepted theory of climate and tropical cyclone formation, there is a well-established theory of how climate affects the maximum intensity and potential intensity of tropical cyclones. In general, models predict that, with global warming over the course of the 21<sup>st</sup> century, there will be a reduction in the global numbers of tropical cyclones by 5-30 percent, but an increase in category four and five (high intensity) tropical cyclones by 0 to 25 percent and increases in maximum intensity and rainfall of tropical cyclones, although the numerical predictions are subject to a high degree of uncertainty. There is also a predicted increase in storm surges caused by the combination of sea level rises and more high intensity tropical cyclones.

The most intense tropical cyclones cause the most damage. Acevedo (2016) estimates wind speed damage elasticity for hurricanes in the Caribbean, which is between two and three depending upon whether the storm makes landfall. His findings suggests that damages have historically been underestimated. Average annual damages from storms in the Caribbean are estimated at 1.6 percent of GDP but, given the underestimation, could be as high as 5.7 percent of GDP. Acevedo also makes estimates of how much storm damages will increase with warmer temperatures. This involves three parameters: i) how much a rise in global temperature (GT) translates into a rise in sea surface temperature (SST); ii) how much a rise on SST translates into higher maximum wind speeds of tropical cyclones; and iii) the wind speed damage elasticity. In the RCP 6.0 scenario,<sup>8</sup> storm damages increase by between 11 and 46 percent over the course of this century, although these predictions are highly uncertain.

Some of SIDS are highly exposed to damage from sea level rises (SLR) caused by global warming. Across the globe, sea levels are already rising by an average of around 3.4 millimeters (mm) per annum, and SLR will continue as the planet gets warmer. SIDS have extensive coastal areas, some of which lie below the future high tide water level, and hence will be exposed to permanent inundation from SLR and the associated higher tides as well as episodic flooding from extreme sea level (ESL) events. Modelling indicates that the expected annual flooded area (EAFA) of all SIDS will more than triple by 2050 under all global warming scenarios and will

> 7 The Probable Maximum Loss is the largest losses that might be expected to occur for a given return period. The return period is the inverse of the annual probability that a disaster will occur; i.e. the length of time over which a specific disaster would be expected to occur once.

> 8 This is a Representative Concentration Pathway modelled by the Intergovernmental Panel on Climate Change (IPCC). The RCP 6.0 is an intermediate pathway in terms of the rise in global temperatures and regarded by the IPCC as the baseline scenario, in which global temperatures rise by 2.5<sup>0</sup> C with a range of 1.6<sup>0</sup> C to 3.6<sup>0</sup> C.

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