An increased risk of extreme weather events due to climate change could cost some Caribbean countries up to 9% of annual GDP by 2030.

A Swiss Re study estimates annual losses from wind, storm surge and inland flooding in the Caribbean could rise by 1%-3% of GDP by 2030 under the worst-case scenario.

Some countries in the region already incur annual losses of up to 6% of GDP, leaving them particularly vulnerable to increased costs.

Swiss Re Senior Climate Change Adviser Andreas Spiegel says the study into the economics of climate adaptation shows a range of measures can be taken to address the effects of climate change.

“Developing countries can reduce local climate risks by combining prevention and risk transfer measures,” he said. “Climate risks can be transferred away from public budgets to the commercial insurance market, thus pre-financing disaster recovery efforts.”

The study indicates the Cayman Islands could cost-effectively avoid up to 90% of expected losses by implementing risk mitigation initiatives such as constructing sea walls and enforcing building codes.

But for other countries such as Dominica, only 2% of the calculated loss could be averted cost-effectively using risk mitigation measures and it would be more economically effective to purchase insurance.