Climate risks and adaptation in Asian coastal megacities: A synthesis

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prices and the same prices are applied to 2050 damages.The Manila study assumes a 5 percent annualgrowth in the value of goods and services lost fromfloods; that is, damages grow annually at 5 percentup to 2050. However, for comparison, the Manilastudy deflates its 2050 values and presents the 2008values of all damages whether they occur in 2008 or2050. The HCMC study uses a macro approach toestimating costs and examines current land valuesas well as annual income loss based on annuallyprojected GDP. 28The interest rate is an important price variablefor assessing adaption investments. The case studiesuse discount rates that are normally used to discountpublic investments in each city. The Bangkokstudy presents results using 8 percent, 10 percent,and 12 percent rates. The Manila study uses a 15percent discount rate and the HCMC study uses a10 percent rate.Conclusion:Methodological Limitationsand Uncertainties inInterpreting Resultsof the StudyDifficulties with 2050 projectionsWhile the studies attempt to establish some understandingof how the cities may look in 40 or so yearsfrom now as is discussed in the following chapters,this is really very difficult to do. Hydrologicalmodels in all three studies incorporate flood controlinfrastructure and the type of land use that may existin the future. Future transportation networks areincorporated into damage assessments undertakenby Manila and Bangkok, and official populationprojections are used. Yet there are numerous assumptionsunderlying each of these projections andthe future may look different from what is assumed.The road networks may not be built, new land useplans may be put in place, and exogenous shockscould change the population distribution. We canimagine a situation where flood-prone areas aremade into wetlands or parks and set aside for someform of recreation. In these circumstances, the costsof flooding may be very different.Impacts on populations working in floodedareas are another area of concern. It is hard to establishwhat categories of people may actually inhabitflood-prone areas in 2050. While the studies incorporatetrends in population distribution, it is notclear that these trends will remain unchanged in thenext forty years. It is rational to consider a scenariowhere increased flooding will lead to commercialestablishments moving away from flood-proneareas. Thus, these areas could become recreationalareas as previously discussed, or they could becomea refuge for the poor and vulnerable because of lowland values. These complex issues cannot be teasedout in the damage costs framework that is used.There are two confounding issues to considerin examining health impacts: (a) climate change islikely to change the incidence and geographic rangeof different diseases such as dengue or malaria, forexample, and it is difficult to predict changes in thegeneral prevalence of these diseases in the three citiesin 2050; and (b) economic growth and increasededucation will potentially reduce the prevalenceof certain diseases such as diarrhea. Each city hasmade its own assumptions about health impactsand provides qualitative and some quantitativeinformation on costs, but this information is subjectto significant uncertainty.Estimating physical damages requires avariety of assumptionsEstablishing exactly how and what will be affectedby natural disasters is not easy. The Bangkok andManila studies examine a variety of impacts onbuildings and income, but a series of assumptionsunderlie this analysis. In order to estimate incomelosses, for example, both case studies have to makeassumptions about the number of households andfirms residing in flood-affected buildings. Without acareful survey of each flood-affected area, it would28In order to examine adaptation-related investments, someadditional assumptions are made. The Bangkok study estimatesnet benefits under two scenarios: (a) prices stay thesame, and (b) net benefits grow at an annual rate of 3 percent .The Manila study uses a 5 percent annual rate of growth.20 | Climate Risks and Adaptation in Asian Coastal Megacities: A Synthesis Report
e very difficult to know how accurate these assumptionsare.Valuation considerationsThere are numerous challenges to valuing floodimpacts that have to do with current and future dataavailability. Flooding damages to building stocksand machinery, for instance, are best valued at theirdepreciated replacement cost. In practical terms,the valuation exercise was carried out in differentways in each study depending on data availability.For example, in Bangkok the value of an entire assetor building was assessed and a percentage ofthe value was treated as the damage cost. Further,in Manila and Bangkok, buildings are evaluated atbook-values, or the cost of the buildings when theywere initially established. In HCMC, land is evaluatedat government-established prices, but in somecases the market value of this land may be higher.Also, the cost of repairing flooded components of abuilding may be very different from the value obtainedby applying a damage rate to the entire valueof the building. Another issue is how losses relatedto electricity and water supply have been evaluatedbecause of lack of appropriate information. The costsof supply disruptions should be assessed by estimatingthe economic value of public water/electricitysupply, or, for example, by estimating the coststo water consumers of securing alternative waterwhen service is interrupted. In Bangkok, water andenergy-related flood costs, however, are estimatedby examining revenue losses to the government.Another important issue is the role of prices.It is very difficult to estimate the value of assetsand incomes damaged by flooding in 2050. Givendifficulties in predicting prices, most prices areheld constant or in some cases some reasonablegrowth rates are assumed. However, urban realestate prices and the prices of a variety of goodsand services damaged by floods can change significantlyand this would affect the evaluation in 2050.There are also difficulties in estimating income orproductivity losses as a result of floods. The Manilastudy and Bangkok (for low income households)estimate the number of households affected byfloods and multiply this by an average value ofhousehold income based on the type of housesthese families live in. However, average valuesused may not apply for flood-prone areas. Further,the families may have a way of earning incomeeven under flood circumstances if they can leavethe area for work. In the HCMC study, a macroapproach is applied and GDP per capita is usedas the value of productivity lost in flooded areas.However, if these areas may not be producing the“average GDP per capita,” this could lead to anoverestimation of impacts. These uncertainties andlimitations need to be borne in mind in interpretingthe results of this study.Methodologies for Downscaling, Hydrological Mapping, and Assessing Damage Costs | 21
Page 4 and 5: © 2010 The International Bank for
Page 7 and 8: Figure 4.6 Damage Costs Associated
Page 9: AcknowledgmentsThis synthesis repor
Page 13 and 14: Executive SummaryIntroduction and R
Page 15 and 16: For each city, complex hydrometeoro
Page 17 and 18: infrastructure but a high emission
Page 19: these include strategies that focus
Page 23 and 24: policy implications have broader re
Page 25: 2Methodologies forDownscaling, Hydr
Page 28 and 29: Table 2.1 ■ Climate Change Foreca
Page 30 and 31: Return periods considered 18In this
Page 32 and 33: Figure 2.2 ■ Manila Rainfall-Runo
Page 34 and 35: Figure 2.3 ■ Estimation of Damage
Page 36 and 37: sion and distribution lines, and en
Page 38 and 39: Figure 2.5 ■ Possible Relationshi
Page 43 and 44: 3Estimating Flood Impactsand Vulner
Page 45 and 46: Table 3.2 ■ Bangkok Monthly Avera
Page 47 and 48: Estimation of storm surge in the ca
Page 49 and 50: Climate Change Impact and Adaptatio
Page 51 and 52: Figure 3.5a ■ Affected Condensed
Page 53 and 54: Manila’s current climate—Tropic
Page 55 and 56: Table 3.6 ■ Manila Climate Change
Page 57 and 58: Figure 3.10 ■ Areas of High Popul
Page 59 and 60: is also a key economic and financia
Page 61 and 62: Box 3.3 ■ HCMC in 2050Future land
Page 63 and 64: original swamp land on which the ci
Page 65 and 66: from 68 percent to 71 percent; that
Page 67 and 68: Table 3.15 ■ Districts Affected b
Page 69 and 70: Table 3.16 ■ Effects of Flooding
Page 71 and 72: 4Assessing Damage Costsand Prioriti
Page 73 and 74: Table 4.2 ■ Summary of Flood and
Page 75 and 76: uilt outside the cities and are not
Page 77 and 78: ■■■■■■For the eastern p
Page 79 and 80: Table 4.6 ■ Flood Damage Costs Wi
Page 81 and 82: Table 4.8 ■ Flood Damage Costs in
Page 83 and 84: Figure 4.5 ■ Loss Exceedance Curv
Page 85 and 86: Box 4.3 ■ Increased Time Costs an
Page 87 and 88: Table 4.11 ■ Adaptation Investmen
Page 89 and 90: Marikina River areas through a dam,
Page 91 and 92:
Table 4.14 ■ Present Value of the
Page 93 and 94:
of reducing vulnerability of the po
Page 95 and 96:
5Conclusions andPolicy Implications
Page 97 and 98:
open land use is expected to be flo
Page 99 and 100:
hydrometeorological data, yielding
Page 101 and 102:
BibliographyAllen, M. R., and W. J.
Page 103:
Reduction: Inventory and Prospect.
Page 106 and 107:
a paper commissioned by JICA (Sugiy
Page 108 and 109:
mercial and industrial establishmen
Page 110 and 111:
ADB. The selection and prioritizati
Page 113 and 114:
AnnexCAdaptation to IncreasedFloodi
Page 115:
of people and institutions to manag
Page 120:
THE WORLD BANK1818 H Street, NWWash
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Climate risks and adaptation in Asian coastal megacities: A synthesis

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