The World Bank. Impacts of Climate Change in the Tourism Sector in Mexico. Biol. Julia Martínez. Coordinator of the Climate Change Program

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1 The World Bank Impacts of Climate Change in the Tourism Sector in Mexico Coordinator of the Climate Change Program National Institute of Ecology-SEMARNAT April

2 INTRODUCTION Scientific evidence indicates that climate change is caused by man-made emissions of greenhouse gases and is emerging, with the loss of biodiversity and degradation of ecosystems and their environmental services, as the most important environmental problem in the twenty-first century and one of the biggest global challenges that humanity is facing. For its adverse effects predictable, climate change transcends the environment field and represents a growing threat to many development processes. On the whole, requires a multilateral approach, since any country can deal with it alone. For its temporal dimension, requiring long-term planning.

3 INTRODUCTION Climate change is an issue of strategic security, national and global, there is an urgent need to increase the efforts of mitigation (reduction of GHG emissions), and develop their ability to adapt to adverse predictable impacts. Based on scientific evidence, the latest economic data indicated that inaction in the present will rise exponentially costs of adaptation in the future. The international political response to climate change began with the adoption of the United Nations Framework on Convention on Climate Change (UNFCCC) in This Convention provides a framework for action which aims to stabilize the concentration of greenhouse gases in the atmosphere, to avoid that human activity interferes dangerously with the climate system.

4 INTRODUCTION The United Nations declared Tourism as the largest industry in the world1. Tourism is a source of wealth, employment and stability in Mexico, is the third generator of foreign currency (INE- SEMARNAT, 2006). Changes in climate due to climate change could have very adverse consequences in the Tourism sector in Mexico. Services and related sectors could be affected (INE- SEMARNAT, 2006). 1.

5 Relevance of Tourism for Mexico 12, % participation in the National GDP Third activity in attracting foreign currency 5.4% of the P.O. National Millions of USD 10, , , , , Source: CENAPRED

6 Major destinations for arrivals and receipts Position Country Million of arrivals 1 France Spain United States of America China Italy United Kingdom Hong Kong Mexico Germany Austria 19.4 Position Country Billions of dollars 1 United States of America Spain France Italy Germany United Kingdom China Turkey Austria Australia Greece Canada Japan Mexico 1/ Switzerland 10.3 SOURCE: World Tourism Organization. World Tourism Barometer, Vol. 3, no. 2, June 2005

7 Economic importance of Cancun It is the most important tourist resort in Mexico It is the first tourist destination in the Caribbean Every year is visited by 3 million tourists It provides more than one-third of tourist revenue in the country (3,280 USD millions) Source: CENAPRED

8 Impacts of climate change in Cancun Tourism

9 Impacts of climate change Climate change: a development problem Predictable effects of climate change: mostly negative, especially for developing countries by the lack of ability to adapt and by be located in vulnerable regions to climate change.

10 The Formation of Hurricanes In areas near Mexico, tropical cyclones are developed in the Atlantic Ocean, which has an average of about 11 tropical cyclones per season, of which 6 reach hurricane status, whereas in the northeast Pacific Ocean the average is of 15 tropical cyclones per season, of which 8 reach hurricane status.

11 Temperature Anomalies observed in the Atlantic Ocean Source: Presented in the workshop of outputs of the study impacts of climate change in the Mexican tourism sector, INE-IMTA, 2006

12 Historical Records: Temperature Anomalies in the Atlantic Ocean and number of Hurricane with Categories 3, 4 and 5 # cat-3,4,5 Number Source: Presented in the workshop of outputs of the study impacts of climate change in the Mexican tourism sector, INE-IMTA, 2006

13 Considerations During Hurricane Wilma, the surface temperature anomalies in the Caribbean Sea were lower than 1.5 C. In climate change scenarios, average temperatures in the Caribbean Sea are expected to be up to 2 C higher (with respect to the current climate) during the decade of 2020s and up to 3 C higher during the decade of 2050s (INE-SEMARNAT, 2006).

14 Hurricane Wilma Wave height: WVHT (m), Wind speed: WSPD (m/s) WVHT WSPD ESTACIÓN 42056, LAT 19 52'27'', LON 85 03'33'' 18/10/21Z-23/10/16Z /10/18/ /10/19/3 2005/10/19/9 2005/10/19/ /10/19/ /10/20/3 2005/10/20/9 2005/10/20/ /10/20/ /10/21/3 2005/10/21/9 2005/10/21/ /10/21/ /10/22/3 2005/10/22/9 2005/10/22/ /10/22/ /10/23/3 2005/10/23/9 2005/10/23/15 WVHT WSPD FECHA Maximum wind speed, 30 m/s Maximum wave height, 10.5 m Source: Presented in the workshop of outputs of the study impacts of climate change in the Mexican tourism sector, INE-IMTA, 2006

15 The impacts of wave and tide from Hurricane Wilma Source:

16 The impacts of Hurricane Wilma Rain Source:

17 Severe damage Erosion of beaches Massive Evacuations Source: IMTA

18 Other Effects for the Tourism Sector are: INDIRECT IMPACTS Tourists Withdrawal Source: IMTA Reduction of the demand of tourism services

19 Other effects Source: CENAPRED

20 Other Effects Source: CENAPRED

21 Vulnerable regions from Cancun Waves: Coastal area, tourist area (less than 7 meters above sea level). Wind: Central area, communications, airport. Rain: centre area, roads, highways, roadways. (INE-SEMARNAT, 2006) Source: IMTA

22 Summary of Economic Damage Concept Social infrastructure Direct damage (millions of pesos) Damage indirect (millions of pesos) Total (millions of pesos) Percentage of total Housing Education Health Hydraulic infrastructure - CONAGUA Subtotal Economic Infrastructure Communications and Transport Electrical sector Subtotal Productive sectors and the environment Agricultural and fisheries sectors Tourism Sector 3, , , Subtotal 3, , , Environment and natural resources Environment and natural resources Subtotal Attention to the emergency Grand Total 4, , , Source: CENAPRED

23 Impact on Tourism Concept Direct damage Damages and indirect effects T O T A L Millions of dollars Millions of pesos Millions of dollars Millions of pesos Millions of dollars Millions of pesos Infrastructure Hotel , ,454.5 Revenue lost perceive - - 1, , , ,316.1 Recovery beaches Tourist Promotion Lower tax collections hosting T O T A L , , , , ,187.6 Source: CENAPRED

24 Impact on Tourism Destination Number of rooms damaged Estimated value of rooms damaged (Thousands of dollars) Evaluated Estimated Totals Evaluated Estimated Totals Cancún ,328 12, ,560 Rivera Maya ,060 12, ,281 Cozumel ,924 5,148 28,072 Isla Mujeres , ,280 Holbox ,226-6,226 Puerto Morelos ,260 1,287 19,547 Total ,484 31, ,966 Source: CENAPRED

25 Number of hotel rooms which stopped operating due to the Hurricane Locality Rooms destroyed or damaged by Hurricane Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Cancún Cozumel Isla Mujeres Holbox Pto. Morelos Riviera Maya Source: CENAPRED

26 Estimated monthly losses per unoccupied room Locality Revenue left to perceive, in thousands of dollars Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Cumulative losses oct.2005/ jul Cancún 7 119, ,811 89,881 74,837 60,023 45,094 30,050 15, ,417 Cozumel 28,901 25,686 22,470 19,255 16,039 12,823 9,608 6,393 3, ,352 Isla Mujeres 3,062 2,722 2,381 2,041 1,701 1,361 1, ,309 Holbox 3,209 2,857 2,506 2,155 1,803 1,451 1, ,226 Pto. Morelos 10,738 9,548 8,357 7,167 5,976 4,785 3,595 2,404 1, ,783 Riviera Maya 121,367 97,097 72,828 48,558 24, ,139 Total 301, , , , ,645 80,443 60,418 40,275 20, ,268,226 Source: CENAPRED

27 OCCUPIED ROOMS PER MONTH. CANCUN, 2000 to 2005 CUARTOS OCUPADOS, CANCUN, 2000 A ENERO FEBRERO MARZO ABRIL MAYO JUNIO JULIO AGOSTO SEPTIEMBRE OCTUBRE NOVIEMBRE DICIEMBRE MES SOURCE: SECTUR based on information generated by the National System of Tourist Information (SNIT) and State Tourist Information Systems (SITE).

28 Summary of Affectations in Tourism 287 hotels affected rooms damaged. 60% availability. 1,268.2 million dollars. In lost revenues. 160 million dollars lost by month. Source: CENAPRED

29 Charging principles in the insurance industry The hydrometeorological threats are: - High frequency and - Catastrophic exposure For its catastrophic nature, the INSURED community in Mexico contributes as a whole with raw material to maintain affordable fees in the areas most exposed. The tariff must be sufficient to absorb variations in frequency and severity from the disasters. It is desirable to recharge the tariff with margins to build up reserves to level the catastrophic cost at the time. Source: Mexican Association of Insurances Institutions (AMIS) (February )

30 Adaptation of the Insurance tariff after Wilma The previous tariff was based on experience of almost 6 years. A catastrophic risk can not be based only on experience. Increased exposure by concentration, changes in the patterns of construction, hotel rooms equipment, and so on. Insufficient premiums. There wasn t properly valued the risk. Increased frequency and severity recognized. Adequacy of international models. Costs of optional coverages. It is not adequately considered the costs of retrocession. Source: Mexican Association of Insurances Institutions (AMIS)

31 Insurance: Rates of hydrometeorological risk coverage A typical insurance policy for a restaurant in Cancun covers : Increases Fire 0% Hydrometeorological risk 150% - 600% Civil Liability 0% Activities 0% Parking 0% Products 0% Theft of property and inventories 0% Accidental breakage of glasses and Announcements 0% Machinery 0% Electronic Equipment 0% GLOBAL 50% - 400% Source: Mexican Association of Insurances Institutions (AMIS)

32 New fees Source: Mexican Association of Insurances Institutions (AMIS)

33 Some recommendations for adapting the tourism sector to climate change (INE-SEMARNAT, 2006) Improve the rules of construction: non-structural elements (coatings) are very fragile to strong winds. "Curtains" for the protection of extreme winds. Overcome deficiencies in the specific procedures for the operation of all systems (ex. telecommunications) in the event of hurricanes. Improve the coordination of emergency actions among institutions and hotels. Reduce the vulnerability of access roads (roads, highways, airport). Establish a center for emergency management, sufficiently equipped and tough. Establish a system to support decision making, rather than access to specific or local information.

34 Dean, first hurricane Category 5 of the Season Dean caused devastation in agriculture in Veracruz. Félix was the second hurricane Category 5 that hit the meteorological region IV, being the first time that two hurricanes 5 have touched land in a season, according to NOAA since they started registering them in Hurricanes that impacted Mexico Pacific 1.- Bárbara 2.- Henriette 3.- Ivo Atlantic 1.- Dean 2.- Lorenzo

35 Protection of windows, doors and balconies Source: IMTA

36 Hotel raised, Galveston, Texas Source: IMTA

37 Wall protection, Galveston, Texas Source: IMTA

38 ACTIONS THAT THE MEXICAN GOVERNMENT IS DOING FOR ADAPTING TO CLIMATE CHANGE

39 Inter-Ministerial Commission on Climate Change (CICC) Commission structure Established on 25 April Its aim is to coordinate the actions of the agencies of the Federal Public Administration, concerning mitigation and adaptation to climate change.

40 Working Group for Strategy and Policy of Adaptation, GT-ADAPT, from CICC The GT-ADAPT, was constituted on March 12, The presidency and coordination is in charge of the National Institute of Ecology. It aims to support the formulation of policies and strategies for adapting at the sectoral, regional and national levels. It consists of the seven Secretariats members of the CICC, plus delegates from: SECTUR SSA (Cofepris) INEGI SEGOB (Cenapred) Also participating delegates from Ine, Conagua, Smn, Conabio and Conafor (SEMARNAT bodies).

41 Working Group for Strategy and Policy of Adaptation, GT-ADAPT, from CICC A workshop was conducted in August 2007, in which it was agreed how to work in the GT-ADAPT, through a matrix of impacts and adaptation to climate change. The matrix takes into account six broad considered key systems and in turn constituted by subsystems: Agriculture, livestock, forestry and fishing Water Ecosystems Energy, industry and services (TOURISM) Transport and communications infrastructures Population and human settlements As a result of the work done, framed in the National Strategy on Climate Change from Mexico, in 2008 will be presented the Special Programme on Climate Change.

42 Climate Change in Mexico. Information by State and Sector

43 Climate Change in Mexico. Information by State and Sector Sector example: Tourism

44 Conclusions (1) Tourist areas of Cancun and other parts of Mexico are vulnerable to the effects produced by intense weather phenomena. In particular wave-tide storm, wind and rain produced by more intense hurricanes. The history of tropical cyclones in the Atlantic Ocean, the theory of Maximum Potential Intensity and climate models show that increases in sea surface temperatures are accompanied by more intense hurricanes. The assessment of the magnitude and direction of impact on tourism as a consequence of global climate change is a first step towards generating adaptation measures to face the impacts of a changing climate.

45 Conclusions (2) Faced with global warming foresee by the IPCC, we can expect more intense hurricanes than those registered so far. Even if it global warming doesn t occur, we can expect economic damage higher in the future due to increasing of population, constructions and communication roads in high-risk areas of Mexico, particularly in coastal areas. Temperature of the sea surface in the Caribbean, Gulf of Mexico and Mexican Pacific could rise between 1 and 2 C, favoring the probability of tropical cyclone reaching higher level in the Saffir- Simpson scale. It requires adaptive measures to avoid future losses in the tourism sector. Much of these measures can be design, redesign and engineering.

46 Source: Presented in the workshop of outputs of the study impacts of climate change in the Mexican tourism sector, INE-IMTA, 2006

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