IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v8y2020i1p16-d324703.html
   My bibliography  Save this article

A Climate-Economy Policy Model for Barbados

Author

Listed:
  • Eric Kemp-Benedict

    (Stockholm Environment Institute, Somerville, MA 02144, USA)

  • Crystal Drakes

    (BlueGreen Initiative Inc., Peterkin Road, Bank Hall, St. Michael, Bridgetown BB11059, Barbados)

  • Nella Canales

    (Stockholm Environment Institute (SEI Latinoamérica), Calle 71, #11-10, Edificio Corecol, Oficina 801, Bogotá, Colombia)

Abstract

Small island developing states (SIDS), such as Barbados, must continually adapt in the face of uncertain external drivers. These include demand for exports, tourism demand, and extreme weather events. Climate change introduces further uncertainty into the external drivers. To address the challenge, we present a policy-oriented simulation model that builds upon prior work by the authors and their collaborators. Intended for policy analysis, it follows a robust decision making (RDM) philosophy of identifying policies that lead to positive outcomes across a wide range of external changes. While the model can benefit from further development, it illustrates the importance for SIDS of incorporating climate change into national planning. Even without climate change, normal variation in export and tourism demand drive divergent trajectories for the economy and external debt. With climate change, increasing storm damage adds to external debt as the loss of productive capital and need to rebuild drives imports.

Suggested Citation

  • Eric Kemp-Benedict & Crystal Drakes & Nella Canales, 2020. "A Climate-Economy Policy Model for Barbados," Economies, MDPI, vol. 8(1), pages 1-21, February.
    • Handle: RePEc:gam:jecomi:v:8:y:2020:i:1:p:16-:d:324703
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/8/1/16/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/8/1/16/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fankhauser, Samuel & S.J. Tol, Richard, 2005. "On climate change and economic growth," Resource and Energy Economics, Elsevier, vol. 27(1), pages 1-17, January.
    2. Mario Cimoli & Gabriel Porcile, 2014. "Technology, structural change and BOP-constrained growth: a structuralist toolbox," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(1), pages 215-237.
    3. Johanna Forster & Peter Schuhmann & Iain Lake & Andrew Watkinson & Jennifer Gill, 2012. "The influence of hurricane risk on tourist destination choice in the Caribbean," Climatic Change, Springer, vol. 114(3), pages 745-768, October.
    4. Ms. Nicole Laframboise & Miss Nkunde Mwase & Mr. Joonkyu Park & Yingke Zhou, 2014. "Revisiting Tourism Flows to the Caribbean: What is Driving Arrivals?," IMF Working Papers 2014/229, International Monetary Fund.
    5. S. Kuznets, 1960. "Economic Growth Of Small Nations," International Economic Association Series, in: E. A. G. Robinson (ed.), Economic Consequences of the Size of Nations, chapter 0, pages 14-32, Palgrave Macmillan.
    6. A. Casanueva & M. Frías & S. Herrera & D. San-Martín & K. Zaninovic & J. Gutiérrez, 2014. "Statistical downscaling of climate impact indices: testing the direct approach," Climatic Change, Springer, vol. 127(3), pages 547-560, December.
    7. Charley Granvorka & Eric Strobl, 2013. "The Impact of Hurricane Strikes on Tourist Arrivals in the Caribbean," Tourism Economics, , vol. 19(6), pages 1401-1409, December.
    8. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(4), pages 668-669, October.
    9. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    10. Douglass C. North, 1955. "Location Theory and Regional Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 63, pages 243-243.
    11. Ackerman, Frank & Stanton, Elizabeth A., 2012. "Climate risks and carbon prices: Revising the social cost of carbon," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-25.
    12. Luiz Carlos Bresser-Pereira, 2012. "Structuralist macroeconomics and the new developmentalism," Brazilian Journal of Political Economy, Center of Political Economy, vol. 32(3), pages 347-366.
    13. Streeten, Paul, 1993. "The special problems of small countries," World Development, Elsevier, vol. 21(2), pages 197-202, February.
    14. Rezai, Armon & Taylor, Lance & Mechler, Reinhard, 2013. "Ecological macroeconomics: An application to climate change," Ecological Economics, Elsevier, vol. 85(C), pages 69-76.
    15. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(2), pages 337-338, April.
    16. Jesus Felipe & Norio Usui & Arnelyn Abdon, 2011. "Rethinking The Growth Diagnostics Approach: Questions From The Practitioners," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 251-276.
    17. Nordhaus, William D., 1993. "Rolling the 'DICE': an optimal transition path for controlling greenhouse gases," Resource and Energy Economics, Elsevier, vol. 15(1), pages 27-50, March.
    18. Council on Food Agricultural and Resource Economics, C-FARE, 2014. "2013 Annual Report," C-FARE Reports 260836, Council on Food, Agricultural, and Resource Economics (C-FARE).
    19. Chenery, Hollis B, 1975. "The Structuralist Approach to Development Policy," American Economic Review, American Economic Association, vol. 65(2), pages 310-316, May.
    20. Eric Kemp-Benedict & Crystal Drakes & Timothy J. Laing, 2018. "Export-Led Growth, Global Integration, and the External Balance of Small Island Developing States," Economies, MDPI, vol. 6(2), pages 1-25, June.
    21. Holder, Carlos & Worrell, DeLisle, 1985. "A model of price formation for small economies : Three Caribbean examples," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 411-428, August.
    22. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(1), pages 210-211, January.
    23. Anthony Philip Thirlwall, 2012. "Balance of Payments Constrained Growth Models: History and Overview," Palgrave Macmillan Books, in: Elias Soukiazis & Pedro A. Cerqueira (ed.), Models of Balance of Payments Constrained Growth, chapter 1, pages 11-49, Palgrave Macmillan.
    24. Gabriele Villarini & Gabriel A. Vecchi, 2012. "Twenty-first-century projections of North Atlantic tropical storms from CMIP5 models," Nature Climate Change, Nature, vol. 2(8), pages 604-607, August.
    25. Amitava Krishna Dutt (ed.), 2003. "Development Economics and Structuralist Macroeconomics," Books, Edward Elgar Publishing, number 2658.
    26. Martin L. Weitzman, 2011. "Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 275-292, Summer.
    27. Eric Kemp-Benedict & Jonathan Lamontagne & Timothy Laing & Crystal Drakes, 2019. "Climate Impacts on Capital Accumulation in the Small Island State of Barbados," Sustainability, MDPI, vol. 11(11), pages 1-23, June.
    28. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(3), pages 468-472, January.
    29. Colin Read, 2011. "The Management of Risk," Palgrave Macmillan Books, in: BP and the Macondo Spill, chapter 16, pages 143-150, Palgrave Macmillan.
    30. Briguglio, Lino, 1995. "Small island developing states and their economic vulnerabilities," World Development, Elsevier, vol. 23(9), pages 1615-1632, September.
    31. Pentelow, Laurel & Scott, Daniel J., 2011. "Aviation’s inclusion in international climate policy regimes: Implications for the Caribbean tourism industry," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 199-205.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Kemp-Benedict & Crystal Drakes & Timothy J. Laing, 2018. "Export-Led Growth, Global Integration, and the External Balance of Small Island Developing States," Economies, MDPI, vol. 6(2), pages 1-25, June.
    2. Eric Kemp-Benedict & Jonathan Lamontagne & Timothy Laing & Crystal Drakes, 2019. "Climate Impacts on Capital Accumulation in the Small Island State of Barbados," Sustainability, MDPI, vol. 11(11), pages 1-23, June.
    3. Limam Ould Mohamed Mahmoud, 2015. "Consumer price index and economic growth: A case study of Mauritania 1990 - 2013," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 5(2), pages 16-23, February.
    4. Gennaro Zezza & Michalis Nikiforos, 2017. "Stock-flow Consistent Macroeconomic Models: A Survey," EcoMod2017 10762, EcoMod.
    5. Akin Serife Nuray, 2012. "Immigration, Fiscal Policy, and Welfare in an Aging Population," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-45, July.
    6. Mr. Andrea Bubula & Ms. Inci Ötker, 2002. "The Evolution of Exchange Rate Regimes Since 1990: Evidence From De Facto Policies," IMF Working Papers 2002/155, International Monetary Fund.
    7. Manuel Jr. Pastor, 1988. "Ascenso y caída de la heterodoxia peruana: un modelo simple de del nuevo estructuralismo," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 15(23), pages 41-71.
    8. Tochukwu Timothy Okoli & Ajibola Rhoda Oluwafisayomi, 2019. "Investigating the Banking Sector Development Transmission Mechanism of Financial Development to Growth: Evidence from Sub-Saharan Africa (SSA)," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 120-131.
    9. Kose, M. Ayhan & Sugawara, Naotaka & Terrones, Marco E., 2020. "Global Recessions," MPRA Paper 98608, University Library of Munich, Germany.
    10. Mohelsky, Lukas, 2010. "Eastern Europe shifts second gear," MPRA Paper 33148, University Library of Munich, Germany.
    11. Mar Delgado-Téllez & Esther Gordo & Iván Kataryniuk & Javier J. Pérez, 2022. "The decline in public investment: ``social dominance’’ or too-rigid fiscal rules?," Applied Economics, Taylor & Francis Journals, vol. 54(10), pages 1123-1136, February.
    12. André Roncaglia De Carvalho & - André M. Marques, 2018. "Economic Development And Inflation: A Theoretical And Empirical Analysis," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 41, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. Ms. Dalia S Hakura, 2007. "Output Volatility and Large Output Drops in Emerging Market and Developing Countries," IMF Working Papers 2007/114, International Monetary Fund.
    14. Richard J. Cebula, 2014. "An exploratory analysis of the impact of budget deficits and other factors on the ex post real interest rate yield on tax-free municipal bonds in the United States," Applied Financial Economics, Taylor & Francis Journals, vol. 24(19), pages 1297-1302, October.
    15. Nicholas Stern, 2013. "The Structure of Economic Modeling of the Potential Impacts of Climate Change: Grafting Gross Underestimation of Risk onto Already Narrow Science Models," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 838-859, September.
    16. Victor Argy & Erich SpitÄller, 1980. "The joint determination of changes in output and prices in the seven main industrial countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(1), pages 87-113, March.
    17. Mérette, Marcel & Georges, Patrick & Dissou, Yazid, 2008. "Liberalizing Foreign Direct Investment Restrictions in Canada: A Multi-Country Computable General Equilibrium Analysis," Conference papers 331743, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Maxwell J. Fry, 1981. "Inflation and economic growth in Pacific Basin developing economies," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 8-18.
    19. Michael D. Bordo, 1993. "The gold standard, Bretton Woods and other monetary regimes: a historical appraisal," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 123-191.
    20. Gomes, Pedro & Pouget, Francois, 2008. "Corporate tax competition and the decline of public investment," Working Paper Series 928, European Central Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:8:y:2020:i:1:p:16-:d:324703. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.