A survey of relevant literature identifies a direct link between anthropogenic climate change and increased hurricane intensity, notably through a 10% increase in rainfall and associated damages. Caribbean countries are particularly vulnerable, as severe hurricanes lead to notable increases in public debt, compounded by climate change impacts. The study underscores the urgency of integrating climate change considerations into economic and fiscal policies because the impact of climate change is pronounced and immediate.
The study's main results focus on the short-term and medium-term effects of the top 10, 20, 30, and 40 storms with the highest intensity on sovereign debt stocks in the Caribbean region. The findings have profound policy implications, particularly for developing countries, which face challenges like underdeveloped risk-sharing markets and political resistance to investing in risk mitigation.