## Assessing Climate Change Risks: Potential Output Losses and Gains from Strengthening Resilience, Bahamas

_Selected Issues Papers, April 11, 2025_

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**Canonical URL:** [Assessing Climate Change Risks: Potential Output Losses and Gains from Strengthening Resilience, Bahamas](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/10/assessing-climate-change-risks-potential-output-losses-and-gains-from-strengthening-566025)

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## Bibliographic details
- Authors: Zamid Aligishiev
- Published: April 11, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229006712.018

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### Summary and Key Findings
- The Bahamas is highly vulnerable to the effects of climate change, including gradual sea level rise, biodiversity loss, and intensifying hurricanes.
- These climate challenges threaten to undermine the country’s potential output over the long term by inflicting damages to physical assets and eroding natural capital, which is vital to its tourism-driven economy.
- Risks are unevenly distributed: smaller islands are more exposed and sensitive than larger, more developed islands.
- Addressing disparities and closing economy-wide adaptation needs through investments in structural resilience can unlock large potential output gains.

### Vulnerabilities and Channels of Impact
- Sea level rise, biodiversity loss, and intensifying hurricanes are identified as major climate risks for The Bahamas.
- Physical asset damages and erosion of natural capital are the primary channels through which potential output is threatened.
- Tourism dependence amplifies the economic importance of preserving natural capital.

### Distributional Considerations
- Smaller islands are more exposed and sensitive compared with larger, more developed islands.
- Uneven distribution of risks implies targeted resilience measures are needed to address island-specific exposure and sensitivity.

### Potential Output Losses and Gains
- Long-term potential output is at risk due to cumulative damages to physical assets and natural capital.
- Investments in structural resilience and closing adaptation gaps are presented as pathways to unlock “large potential output gains.”

### Policy Implications and Recommendations
- Invest in structural resilience across the economy to close adaptation needs.
- Address island-level disparities in exposure and sensitivity through targeted interventions.
- Preserve and restore natural capital critical to the tourism sector to reduce long-term output losses.

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/10/assessing-climate-change-risks-potential-output-losses-and-gains-from-strengthening-566025_