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Simulations of Sustainable Financing for Disasters in Pacific Atoll Islands: Evidence from Tuvalu and Kiribati

Taupo, Tauisi (2018) Simulations of Sustainable Financing for Disasters in Pacific Atoll Islands: Evidence from Tuvalu and Kiribati. USP School of Economics Working Paper Series, Suva, Fiji. (Unpublished)

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    Abstract

    This paper examines the financing of disaster risk management. Future climate and disaster risks are predicted to impose increasing financial pressure on the governments of low-lying atoll nations. The aftermath of a disaster, such as a cyclone, requires financial means for quick response and recovery. We quantify the appropriate levels of financial support for expected disasters in Tuvalu and Kiribati by building on the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) calculated likely costs for disasters. To these, we add estimates of the potential effects of distant cyclones, droughts, sea level rise, and climate change, as they are predicted to affect low-lying atoll islands. This paper focuses on the potential contribution of the sovereign wealth funds (SWFs) of Tuvalu and Kiribati in reducing reliance on foreign aid for ex-post disaster risk management. We forecast the future size of SWFs using Monte Carlo simulations. We examine the long-term sustainability of SWFs, and the feasibility of extending their mandate for disaster recovery.

    Item Type: Other
    Subjects: H Social Sciences > H Social Sciences (General)
    H Social Sciences > HG Finance
    Divisions: Faculty of Business and Economics (FBE) > School of Economics
    Depositing User: Tauisi Taupo
    Date Deposited: 05 Mar 2019 11:37
    Last Modified: 05 Mar 2019 11:37
    URI: http://repository.usp.ac.fj/id/eprint/11268
    UNSPECIFIED

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