What if the Maldives disappeared?

Saad (0:01)

Hello folks, you're tuned in to Finshots Daily. I'm Saad. If you're new here, welcome. If you're returning, welcome back. In today's episode, we look at the UN's declaration on sea level rise, which explains how a country may have to function if rising seas swallow its physical land.

Before we head to the story, here's a quick word from Team Ditto. We're hosting a free two-day insurance masterclass that helps you build real financial security by understanding health and life insurance the right way. Right from understanding how to protect your family, choosing the right cover amount, and knowing what truly matters during a claim, to how hospitals process claims, the mistakes bios usually make, and how to choose a policy that won't disappoint you when you need it the most. We will explain it all in plain language. Head to the link in the description and save your spot. Now to the story.

The Maldives is one of the world's most popular and preferred luxury tourist destinations. It's Asia's smallest country with 99% water and just 1% land. But soon, the over 2 million people visiting it on vacation may not be able to go there anymore.

Because the Maldives may not exist at all in a few years. Yes, we're not making this up. Rising sea levels thanks to warmer ocean surfaces and melting glaciers could actually swallow whole island nations or coastal regions of larger countries. And the Maldives could be at the highest risk because it's the lowest-lying country in the world. With an elevation of just 1.5 meters above sea level.

This could mean that an entire nation could disappear from the world map. And along with that could disappear its contribution to the global economy, its culture, and of course its people. This could happen as early as 2050 Tuvalu, an archipelago of nine small islands, for instance, could lose half of its capital city, Fongavale, to tidal flooding by 2050 Now, we know that we said that the Maldives is the lowest-lying country, but Tuvalu's surrounding water levels are rising faster than in the Maldives. It's also a tiny island nation, spanning just 25-26 square kilometers, and a majority of its population lives in the capital. So flooding there threatens most of Tuvalu at once. And this crisis was seriously recognized by the United Nations General Assembly last week, when it adopted a draft of the world's first UN Declaration on Sea Level Rise. This declaration recognizes rising sea levels as an existential threat. Because you see, when a country or region disappears because of climate change, you have to be prepared for what happens after. What should countries actually do about this? To understand that, we will first have to understand what's actually at risk. To begin with, around 50 cm of sea level rise by 2100 is already unavoidable because the oceans have absorbed so much of the excess heat caused by global warming. This will continue driving sea level rise even if emissions fall. That means that extreme floods that occur once in a hundred years could become a routine.

So folks living on coastlines are at acute risk much earlier than 2100 For context, nearly 770 million people or approximately 10% of the world's population live in coastal areas less than 5 meters above the high tide line. And if that isn't enough to scare you, cities such as Kolkata and Mumbai are also included, with more than 14 million people at immediate risk of losing their homes. This undoubtedly means massive economic challenges and costs. If there's land loss and infrastructure damage, living will naturally become more expensive because displaced people will have to move elsewhere, and that will create a sort of domino effect. For instance, imagine what could happen to the world's ports. More than 80% of global trade in goods is carried by sea.

But if ports shut down because of flooding or permanent land loss, countries like India can't import or export goods normally. Factories may not get the inputs they need on time, production could slow down and businesses could lose money.

Tourism, coastal transport, and fishing could face similar disruptions. The Caribbean is a good example. Even under a low-emission scenario, it could lose 39% of its sandy beaches, which could translate into losing 17% of its tourism revenue by 2050 And then there's another strange business problem we don't think of much. Insurance. As the risk of floods and storm rises, insurers have to pay out more. So they may respond by increasing premiums, reducing coverage, or refusing to insure properties altogether. The US is already seeing this. Average homeowners' insurance premiums rose from $1,902 in 2020 to $2,530 in 2023 In areas facing greater disaster risks, insurance costs were much higher. And homes in these areas gained about $40,000 less in value than homes in less exposed areas. Now, once insurance becomes too expensive or unavailable, the problem spreads. Banks may become more cautious about lending against risky properties, property values can fall, and governments may eventually have to step in and pay for recovery. And when you talk about losing a landmass or an entire country, you can't just talk about the money, right? It's also loss of culture, heritage, and identity.