infrastructure to make it more resilient to climate change, which obviously increases the unit costs on infrastructure. This implies that the adaption costs will be related to the overall infrastructure investment requirements of a country (sometimes referred to as closing the infrastructure gap) and the magnitude of these overall investment requirements differ between countries.

IMF (2021A) reports estimates of the annual adaptation costs up to 2030 in three categories: retrofitting existing physical assets to make them resilient to climate change hazards, constructing new assets so that they are resilient to these hazards and the annual investment and maintenance costs of coastal protection infrastructure for countries in the Asia Pacific region. The average total annual costs of public investment across all countries in the region are 3.3 percent of GDP, but some SIDS have much higher costs, notably Kiribati (around 25 percent of GDP), Tuvalu (15 – 20 percent of GDP), Vanuatu (almost 15 percent of GDP), Marshall Islands (5 percent of GDP), and Tonga and Timor Leste (almost 5 percent of GDP). By far the largest component of these total costs are those for the investment and maintenance of coastal protection infrastructure, which is not surprising given how vulnerable many of the SIDS in the Asia-Pacific region are to sea level rises, as discussed in section two.

World Bank (2021, table 15.2) reports estimates of annual capital investment and maintenance costs of coastal protection systems for Caribbean countries over 2020 – 2050, with lower and upper bounds. The average for all Caribbean countries for which estimates are available are between 0.4 percent and 0.9 percent of GDP, but some countries have much larger costs, notably Guyana (4.8-10.3 percent of GDP), Suriname (2.1-5.6 percent of GDP) and Dominica (1.8-4.9 percent of GDP).<sup>15</sup> The Government of Grenada has prepared a disaster resilience strategy (DRS) to build resilience to climate change hazards, especially storms and sea level rise. The estimated average annual cost of implementing the DRS over 2024 to 2035 is 5.6 percent of GDP, of which 3.9 percent of GDP comprises the direct costs of physical infrastructure, 0.5 percent of GDP comprises the costs of financial resilience, including accumulating insurance cover, such as self-insurance through a public savings fund, against natural disasters and one percent of GDP comprises the costs of post disaster relief and social resilience (IMF, 2022B). Similarly, the Government of Dominica has prepared a DRS to transform the country into a disaster resilient state. The costs are estimated over a 20-year implementation period and amount to an average of 13 percent of GDP per annum for investments in physical infrastructure, one percent of GDP for the costs of financial resistance and two percent of GDP for post disaster relief and social resilience (IMF, 2021B).

Tiedemann et al (2021) focus on a sample of 25 climate vulnerable small developing states (SDS)<sup>16</sup> and use an input-output approach to estimate the country specific additional costs of achieving sustainable development goals (SDGs) by 2030 in five sectors. This includes three infrastructure sectors (roads, energy/electricity and water, sanitation and hygiene [WASH]) and two social sectors (health and education), taking account of country specific vulnerabilities to climate change. For the three infrastructure sectors, the estimated costs are those needed to close the gap between the level of infrastructure provision in 2019 and the SDG target for 2030 in

> 15 The costs are estimated for the climate change associated with RCP 4.5. The costs as a share of GDP are expressed in terms of 2019 GDP.

> 16 Of the 25 SDS countries in the sample, only two (Bhutan and Djibouti) are not SIDS.

15