A recent report surrounding the effects that a country’s vulnerability to climate change can have on the economy was released by Moody with Belize as one of the most vulnerable. The report noted, quote, “Countries’ creditworthiness could be increasingly affected by climate change, with African and South Asian sovereigns most susceptible to the economic effects of global warming; by contrast, Western Europe, North America and Australia as well as the huge landmasses of Russia and China were least vulnerable.

Climate change is expected to become an increasingly dominant factor in our analysis of the credit profiles of those sovereigns that are most susceptible to its effects over the coming decades. Jamaica and Belize, small countries with high debt and Caa2 ratings, are seen as the next two most vulnerable, while India is also seen as highly at risk from climate change, with 48 percent of its workforce in the agricultural sector.” End of quote.

Moody’s measured sovereigns’ vulnerability by their “exposure” and “resilience” to climate change. Exposure was determined by a country’s geographic location and economic diversification, while resilience was measured by its adaptive capacity, fiscal flexibility and income levels. Countries with large economies and landmasses like Russia and China experienced a higher frequency of natural disasters in the past decade but were also better insulated from their impact on GDP.

The report added that more susceptible countries meanwhile tended to be lower rated already, an overlap which also reflects higher reliance on agriculture in the economy and weaker infrastructure quality.