Enhancing Resilience to Climate Change in the Maldives

April 23, 2021

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Format: Chicago

Giovanni Melina, and Marika Santoro. Enhancing Resilience to Climate Change in the Maldives, (USA: International Monetary Fund, 2021) accessed November 14, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The increased likelihood of adverse climate-change-related shocks calls for building resilient infrastructure in the Maldives. Fulfilling these infrastructure needs requires a comprehensive analysis of investment plans, including with respect to their degree of climate resilience, their impact on future economic prospects, and their funding costs and sources. This paper analyzes these challenges, through calibrating a general equilibrium model. The main finding is that there is a significant dividend associated with building resilient infrastructure. Under worsened climate conditions, the cumulative output gain from investing in more resilient technologies increases up to a factor of two. However, given the Maldives’ limited fiscal space, particularly after COVID-19, the international community should also step up cooperation efforts. We also show that it is financially convenient for donors to help build resilience prior to the occurrence of a natural disasters rather than helping finance the reconstruction ex-post.

Subject: Environment, Expenditure, Infrastructure, National accounts, Natural disasters, Private investment, Public investment spending

Keywords: Adaptation infrastructure, Climate condition, Climate resilience, Disaster shock, IMF working paper Asia-Pacific, Infrastructure, Natural disasters, Private investment, Public investment spending, South Asia

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/096
Stock No:

WPIEA2021096
ISBN:

9781513582443
ISSN:

1018-5941

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