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Tags Current Affairs

Sea Level rise to impact credit ratings

Date: 17 January 2020 Tags: Reports & Indices

Issue

Economic shocks emerging from rising sea levels pose a long-term risk to the sovereign credit ratings of dozens of countries that have large areas at risk of submersion, including Vietnam, Egypt, Suriname, and the Bahamas, Moody’s said.

 

Background

Climate science suggests that sea levels will continue to rise for decades, contributing to increasingly frequent natural disasters such as storm surges, floods, and cyclones.

 

Details

  • The economic and social repercussions of lost income, damage to assets, a loss of life, health issues and forced migration from the sudden events related to sea-level rise are immediate.

  • Farming, tourism, and trade are all threatened by rising sea levels, especially in countries with a large proportion of land and people at risk of submersion, including island states like the Philippines, Fiji and the Maldives.

  • While high-income economies, such as Japan and the Netherlands, are also exposed, they have countermeasures in place that mean their credit ratings are unlikely to be materially impacted.

  • Moody’s said, the largest populations exposed are in Asia, including Bangladesh (Ba3 stable), China (A1 stable), Indonesia (Baa2 stable), and India (Baa2 negative).

  • The credit implications are wide-ranging, including economic and social repercussions of lost income, damage to assets, loss of life, health issues and forced migration from the sudden events related to sea level rise are immediate.

  • The extent of risk will be determined by the pace of increase in the frequency and severity of natural disasters related to sea level rise, which is currently highly uncertain.

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