The World’s Fantasy Destination Has an Answer to Climate Oblivion

Ross Urken
·11 min read

(Bloomberg) -- Lanky palms dip over white beaches of powder-fine sand. Decadent villas hover above impossibly warm shallows. All around, sea and air merge into a uniform shade of blue.

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These are the Fari Islands, the apex of tropical perfection situated near the northern end of the archipelago that makes up the Maldives, one of the ultimate vacation destinations for the world’s wealthiest. Made up of 1,200 specks of land sprinkled over hundreds of miles of Indian Ocean, the Maldives are in fact a series of 55 million-year-old limestone outcroppings perched atop a submerged volcanic plateau.

But these islands, and many others like them, are dying. They are on the front lines of a losing battle with global warming, one in which paradise has been transformed into a sun-drenched dystopia as whole nations face a watery obliteration. Indeed, the climate prognosis for the Maldives is bleak: According to NASA and the US Geological Survey, by 2050 some 80% of the country could be uninhabitable. Even if the world’s nations suddenly pivoted away from fossil fuels, this country’s fate seems unavoidable.

Except for the Fari islands, that is. These four delicately shaped piles of sand are where the Maldives is making its stand. They sit almost two meters higher than their sister islands to the south, boasting a distinct advantage over the rising waters.

That advantage, as it turns out, was by design.

The Fari Islands were made of sand dredged from the ocean floor. Artificial island building, or land reclamation, is seen by some as the best strategy to delay the death of island nations. In recent years, many such islands have risen from the waters around the Maldives.

“Most of our islands are just a meter above sea level,” said Shauna Aminath, the Maldives’ Minister of Environment, Climate Change and Technology. “With the rate of increase in climate change and with the rate of increase in sea-level rise, we will need to build a higher ground.”

But the process is hugely expensive and environmentally destructive. The more than $1 billion price-tag for the overall effort has been paid by developers and with government borrowing, some of it from state-owned banks in China and India. And most of that new land has been given over to resort brands with names like Waldorf Astoria and the Hard Rock Hotel. Three of the Fari Islands are also reserved for high-end resorts—while the fourth is for the staff.

The Maldives government says revenue from such projects and more tourism will fund more artificial islands—ones that will provide homes to a population threatened by rising seas. But Young Rae Choi, an assistant professor at Florida International University, contends hugely profitable reclamation projects are being falsely cloaked with climate altruism. “They are actively adopting climate crisis as their rationale to justify such projects,” she said.

Zita Sebesvari, deputy director of the United Nations’ Institute for Environment and Human Security, expressed doubt that exquisite holiday retreats for the global elite will necessarily translate into climate protections for everyone else. “The private sector will likely not focus on the vulnerable population,” she said. “Regulatory interventions are needed to protect them and to ensure equity and justice.”

Other atoll nations—Kiribati, Tuvalu and the Marshall Islands—face the same looming catastrophe as the Maldives. At the most recent UN General Assembly, these nations and others like them inaugurated the Rising Nations Initiative, aimed at protecting countries whose existence is threatened by the climate crisis. It’s a topic certain to come up at next week’s global climate summit in Egypt.

Efforts by these island countries to adapt to rising seas vary. Tuvalu and the Marshall Islands have weighed the possibility of building artificial islands. Kiribati has focused on nature-based solutions, like growing mangroves. Fiji created Denarau Island from reclaimed mangrove swamps.

On a sunny day last December about 14 miles north of the Maldives capital of Malé, workers were landscaping a beach on an island that until recently hadn’t existed. Here would be one of four Fari islands, which means “beautiful” in Dhivehi, the language of the Maldives. With the exception of workers, their inhabitants will be almost exclusively rich tourists.

Tourism is the largest sector of the Maldives’ economy, with 1.3 million annual visitors contributing more than 28% of GDP. By expanding its status as a luxury destination, the government contends the extra revenue will pay for projects to protect its 555,000 citizens. But not everyone is happy with the costs to the environment that come with this promise.

“The idea that destroying the natural wealth of the Maldives, with its natural coral reef foundations and the marine biodiversity which sustain these ecosystems, can contribute to any notion of vitality makes no sense,” said Humay Abdulghafoor, an activist for local NGO Save Maldives Campaign.

Moreover, it may not work as advertised. Reclamation, typically undertaken in shallow seas, isn’t just damaging to coral reefs and fauna. An Imperial College London study found the process changed tidal dynamics, sediment movement and sediment grain size in the North Malé atoll to such an extent that, rather than protect inhabitants, there’s an increased risk of floods and erosion.

As every year passes, more of the Maldives ceases to be habitable—and the capital Malé, with 193,000 people living on less than a square mile, becomes more crowded. The government has been betting on Hulhumalé, a 1,000-acre island under development for 25 years, to provide some breathing room. At 6.5 feet above sea level—it’s three feet higher than most of the country’s natural islands.

Hulhumalé already has 100,000 residents and, along with Malé, could potentially house two-thirds of the country’s population. But it’s the exception: most of the reclamation projects in the Maldives are on behalf of the hospitality sector.

Mark Lynas is climate adviser to former Maldives’ President Mohammed Nasheed, who famously held an underwater summit in scuba-gear to highlight the danger of rising seas. Rather than development, Nasheed—now speaker of the Maldives parliament—has proposed a massive migration of climate refugees from the Maldives to Australia.

Lynas said he’s “very skeptical of large-scale land reclamation, because it is hugely disturbing to the marine ecosystem. Sediment is disturbed by dredging, reefs are dumped on or destroyed, and so on. Like any development anywhere, this can be mitigated or offset, but the benefits need to be both very clear and widely shared to offset the negatives.”

André Droxler, a marine geologist and oceanographer, cautioned though that any cost-benefit analysis of land reclamation is “not a black and white exercise.” He points to what he called the “extreme optimism of the current government in accepting indebtedness to finance those colossal land reclamation projects,” which he calls “short-term solutions to the immediate threats of sea level rise.”

The destruction that accompanies land reclamation, Droxler warned, will have the ironic effect of damaging the Maldives’ status as a luxury destination. “If the reef isn’t there, are they going to come?” he said. “If you think you’re doing this land reclamation mostly for tourists, and you’re destroying the area around these resorts—I guess [you think] they want to go to their little island with their little villa and their little pool.”

Island building is far from new. The Maldives has been doing it in some form since the 1970s. But only recently has the strategy been floated as part of a broader initiative to protect vulnerable populations.

James Ellsmoor, chief executive of Island Innovation, a consultancy focused on enhancing sustainability among island communities, said the ethical calculus pits preservation against national disintegration.

“You must make choices for your survival,” Ellsmoor said. “And sometimes that involves choosing the lesser of two evils.”

But the nations most in need of such a radical solution are often ones that can least afford it. The first Intergovernmental Panel on Climate Change report in 1991 sounded the alarm on the threat to Small Island Developing States, or SIDS. At the 2009 climate conference in Copenhagen, wealthy nations pledged $100 billion to help developing countries adapt. But so far, the funding has fallen short.

“The inaction of global governments means [SIDS] are forced to fund their adaptation themselves—despite having little to no impact on global carbon emissions,” Ellsmoor said. Insufficient support from the world’s biggest polluters has forced them to seek other funding methods—such as tourism. The Maldives reportedly spends more than 30% of GDP on climate change mitigation, including land reclamation. For tourism-intensive nations, Ellsmoor said, “it is absolutely necessary for them to tap into tourism and future-proof that industry and their communities.”Funding for reclamation in the Maldives has come from a range of sources, with developers paying to build tourist-island projects. For the Gulhifalhu Port Development project, however, slated to be one of the largest such initiatives in the nation’s history, the government in June reportedly obtained a $107 million loan from several European banks.

Hulhumalé is being financed by the Saudi Fund for Development, which gave about $80 million in 2015, and India’s EXIM Bank, which signed a letter of intent last year to provide $130 million. Singha Estate Public Company Ltd., a Bangkok-based property and investment company, and Singapore-based Pontiac Land Group have also funded development elsewhere in the island chain.

The largest Indian-backed project is a reclamation effort in the Addu atoll, a $147.1 million initiative funded by India’s EXIM Bank with Dutch marine contractor Van Oord. They are dredging millions of tons of sand to create 480 acres of land for five high-end resorts. At risk, critics contend, is an abundance of mangroves and seagrasses in the area, which was granted UNESCO Reserve status in 2020.

“This is exactly the kind of corporate impunity, facilitated by weak policy, governance and practice, which is undermining the natural wealth of the Maldives,” Abdulghafoor of the Save the Maldives said. “Artificial resorts and widespread reclamation are indicators of the country’s governance weaknesses. Such weakness is easily exploited by foreign investors and global corporations.”

Marjolein Boer, a spokesperson for Van Oord, acknowledged the Addu Atoll has a wide variety of ecosystems. “Part of the project scope is putting effort into relocation of coral and associated species from the reclamation area prior to project execution,” she said.

The Maldives has seen an acute increase in public and publicly guaranteed debt over the last decade or so, rising from 52% of GDP in 2009 to 77% in 2019, according to a recent IMF report. With its debt load growing, Nasheed appealed to the IMF and World Bank in October to forgive the combined $685 billion owed by the 20 countries most vulnerable to climate change, which includes the Maldives.

Among the newest of the Maldives’ projects is the Fari Islands. At $400 million, developer Pontiac Land Group said the 217-acre project is an investment in the nation’s future. The privately-held development firm is run by Singapore’s wealthy Kwee family, which also owns the Patina and Capella-brand resorts slated for two of the four new islands.

“With careful, thoughtful approaches to preserving the Maldives, the ecosystem, all working hand-in-hand with Maldivians, the Fari Islands and the Maldives will be here for future generations of Maldivians and travelers to enjoy,” said Evan Kwee, head of design and hospitality. Kwee contends reclamation prevents developers from encroaching on the country’s valuable, increasingly scarce natural land. Residents, he said, can continue sustainable livelihoods in agriculture, fish processing and forestry on existing islands while working good jobs on the artificial ones.

This year, tourist traffic in the Maldives is on pace to reach 1.6 million. In anticipation of more demand, Velana International Airport in Malé is undergoing an $800 million expansion that includes a new runway, passenger terminal, seaplane terminal and an already unveiled VIP complex.

Expanding the volume of tourism in the Maldives will be essential to its long-term viability, said Jochen Hinkel, an institutional economist at the Berlin-based research association Global Climate Forum. It’s important for reclamation projects to be as environmentally friendly as possible, but, Hinkel said, “some land reclamation is simply a necessity for survival.”

“The tourism sector makes up the largest part of Maldivian GDP, and hence pays for a lot of coastal protection and land reclamation the public sector is currently carrying out,” he said. “Without this revenue, things would look very different in the Maldives.”

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