Climate risks and adaptation in Asian coastal megacities: A synthesis

AnnexDComparison of Costsacross CitiesAn interesting question to ask is how climatechange costs compare across the different cities.The figure below provides a comparisonbetween the Manila and Bangkok case studies inthe context of a 1-in-30-year flood. HCMC is notincluded in this analysis because the methods forassessing damage costs were very different. Thefigure below shows that in Bangkok, for instance,the damages from a 1-in-30-year flood wouldincrease by almost 50 percent going from currentclimate to an A1FI climate change scenario, while asimilar flood in Manila will have a larger effect andincrease costs by some 79 percent. However, whilethe Bangkok damage costs account for land subsidence,the Manila costs do not. Thus, accounting forland subsidence may make the increase in costs inthe two cities rather similar.The costs of climate change are accuratelymeasured as the costs in similar scenarios with andwithout climate change. Thus for Manila, the costsof climate change are represented by the differencebetween the 30-A1FI-EX and 30-SQ-EX scenarios.The costs for Manila from a 1-in-30-year flood are$0.67 billion, which amounts to 6 percent of its2008 GRDP. Similarly, the costs for Bangkok—thedifference between 2050-LS-SR-SS-A1FI and 2050-LS scenarios—amount to $1.47 billion, or 2 percentof Bangkok’s 2008 GRDP. Given that Bangkok is amuch wealthier city than Manila, these numbersare credible.How does HCMC stand in relation to the twocities? As previously noted, the costs to HCMC,because they are in present value terms and becauseof the different methodology used, are notcomparable to the estimates from Bangkok andManila. However, to get a rough understanding ofComparing Damage Costs in Bangkokand Manila80%70%60%50%40%30%20%10%0%72%49%Percent increasein costs of 1/30flood due toclimate change15%9% 3% 5% 6% 2%Costs of 1/30flood as a % ofGRDP (withoutclimate change)Costs of 1/30flood as a % ofGRDP (with A1FIclimate change)Manila 2008 Bangkok 2008Additional costs ofclimate change asa % of GRDPwhether they are in the same order of magnitude,we annualize these costs. We find that annualequivalent of the damage costs to HCMC fallsbetween $0.67 and $5 billion, 62 which on the lowerend is comparable to the costs borne by Bangkokand Manila.62These numbers are the equal annual equivalents (EAE)(using a 10 percent discount rate and time period of 42years) of the present value of total costs from regular andextreme flooding. The range reflects the minimum andmaximum present values of the two land and GDP-basedestimations of climate change costs. EAE = NPV [(i(1 + i)n] / [(1 + i)n − 1)] where i=interest rate and n=time period.97