Editing IPCC:AR6/WGII/Chapter-15 (section)

==== 15.3.4.5 Economies ====

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Small island economies vary greatly in their nature, history/trends and viability under a changed climate. As elsewhere, few small island economies are overseen by governments that are adequately prepared for the economic impacts of climate change over the next few decades ( [[#Connell--2013|Connell, 2013]] ; [[#Hay--2013|Hay, 2013]] ). In particular, the lack of diversity that characterises most small island economies means they are especially vulnerable to global (climate-driven) shocks (Cross-Chapter Box DEEP in Chapter 17), be these the impacts of extreme events or more gradual longer-term change, which makes the maintenance of traditional mechanisms for coping with such shocks in many island societies all the more important ( [[#Granderson--2017|Granderson, 2017]] ; [[#Wilson--2018|Wilson and Forsyth, 2018]] ; [[#Nunn--2019b|Nunn and Kumar, 2019b]] ). As a result, the risk from climate change to economies constitutes a key risk (KR7 in Figure 15.5) in small islands.

Many island environments have been commercially exploited by external interests for much of their recent history. This is especially common for timber, the wholesale removal of forests, especially on tropical islands, exposing land to heavy rain that leads to denudation and increases lowland sedimentation ( [[#Wairiu--2017|Wairiu, 2017]] ; [[#Eppinga--2018|Eppinga and Pucko, 2018]] ). Negative aspects of both processes will be exacerbated by climate change, demonstrating the practical need for reforestation in many island contexts ( [[#Thomson--2016|Thomson et al., 2016]] ). Some small island economies are sustained by extractive industries such as mining, creating dependencies that lead to their environmental impacts being downplayed ( [[#Tserkezis--2016|Tserkezis and Tsakanikas, 2016]] ; [[#Shepherd--2018|Shepherd et al., 2018]] ). It is important to address these impacts as they will add to negative impacts of climate change ( [[#Clifford--2019|Clifford et al., 2019]] ).

Many small island economies are sustained by tourism and have invested heavily in associated infrastructure and capacity building ( [[#Cannonier--2018|Cannonier and Burke, 2018]] ). Some rural island communities have become dependent on tourism to the point that it would be difficult to revert to subsistence living ( [[#Lasso--2018|Lasso and Dahles, 2018]] ). Coast-focused (beach-sea) tourism in island contexts is already being impacted by beach erosion, elevated high SST causing coral bleaching, and associated marine-biodiversity loss, as well as more intense TCs ( [[#Tapsuwan--2015|Tapsuwan and Rongrongmuang, 2015]] ; [[#Parsons--2018|Parsons et al., 2018]] ; [[#Wabnitz--2018|Wabnitz et al., 2018]] ). The COVID-19 pandemic travel disruption significantly affected the tourism sector of Caribbean islands by reducing incomes that would have been used to enhance climate resilience ( [[#Sheller--2020|Sheller, 2020]] ). Many tourism interests downplay the impacts and future risks from climate change ( [[#Shakeela--2015|Shakeela and Becken, 2015]] ), a position that may be borne out by sustained/rising demand for small island vacationing in some locales ( [[#Katircioglu--2019|Katircioglu et al., 2019]] ). A way forward is for island tourism to emphasize its low-carbon and sustainable attributes, and to encourage smaller-scale eco-friendly holiday opportunities ( [[#Lee--2018|Lee et al., 2018]] ), in other words for island nations to embrace a ‘blue economy’ in line with SDG14 to conserve and utilise their oceans for sustainable futures ( [[#Hampton--2020|Hampton and Jeyacheya, 2020]] ; [[#Hassanali--2020|Hassanali, 2020]] ).

Given the high cost of imported goods, especially foodstuffs, larger island jurisdictions are striving to transform their economies to favour locally produced or locally constituted materials that employ local people and reduce their cost of living. The exposure of this component of island economies varies, yet manufacturing/commercial operations are usually found in the lowest-lying areas, often on reclaimed lands. This makes them especially vulnerable to rising sea level, part of a larger issue around the disproportionate exposure of infrastructure on small islands to climate change ( [[#Fakhruddin--2015|Fakhruddin et al., 2015]] ; [[#Kumar--2015|Kumar and Taylor, 2015]] ).

It is challenging to disentangle the role of climate change from that of globalisation and development in recent changes to human livelihoods on small islands, given that the latter have characterised many—especially SIDS—within the last few decades. However, recent climate change is clearly implicated in livelihood deterioration in many island contexts ( [[#Hernandez-Delgado--2015|Hernandez-Delgado, 2015]] ; [[#Nunn--2018|Nunn and Kumar, 2018]] ). For example, livelihood impacts of climate-driven stressors (including shoreline/riverbank erosion, flooding and erratic rainfall) in three Mahishkhocha island chars (river-mouth sand islands of Bangladesh) have been amplified by inadequate/misguided policy ( [[#Saha--2017|Saha, 2017]] ).The subordination of IKLK in favour of external adaptation strategies has accelerated livelihood decline in many island contexts ( [[#Wilson--2018|Wilson and Forsyth, 2018]] ). Although economic and financial development has the potential to reduce environmental (and livelihood) degradation in SIDS ( [[#Seetanah--2019|Seetanah et al., 2019]] ), it is also clear that uneven development can steepen core–periphery disparities, especially in archipelagic contexts, resulting in deteriorating rural/peripheral livelihoods at the expense of improving urban ones ( [[#Wilson--2013|Wilson, 2013]] ; [[#Sofer--2015|Sofer, 2015]] ) and increased rural–urban migration ( [[#Birk--2014|Birk and Rasmussen, 2014]] ; [[#Connell--2015|Connell, 2015]] ).

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