Climate risks and adaptation in Asian coastal megacities: A synthesis

Marikina River areas through a dam, embankments,and storm surge barriers. While adaptation to climatechange would require significant investments, in thecase of Metro Manila, these are investments that arealready planned. Thus, climate change adaptationwould require the government to commit to implementingplans that are currently on the books.Analysis of Damage Costs inHCMCHCMC has a long history of extreme weather events.Between 1997 and 2007, almost all of the districts ofHo Chi Minh City have been directly affected bynatural disasters to some extent. The total value ofdamage to property from natural disasters over thelast 10 years is estimated at over $12.6 million (202billion VND). Most impacts have been concentratedin the predominantly rural Can Gio and Nha Bedistricts. However, with increased levels of floodingand extreme events due to climate change, urbanareas are likely to suffer increasing levels of damage.This is likely to increase costs significantly.The HCMC study used a different approachfrom Bangkok and Manila to estimate the aggregatecosts of climate change impacts to 2050. It does nottake a sectoral approach and estimate in detail thecosts that will be incurred as a result of climatechange. While areas of vulnerability and risks areclear, there has been no attempt to value specificrisks directly. Rather, a first approximation of thelikely costs of climate change is undertaken basedon macro data. Further, the HCMC study estimatesthe present value of flooding from the current periodup to 2050. Thus, it presents cost estimates todaythat reflect repeated flooding over a long period oftime. In contrast, the Manila and Bangkok studiesestimate the costs of specific single events of floodingin different scenarios.As discussed in chapter 2, the HCMC studyuses two approaches to estimate the costs of climatechange: (1) cost estimates based on expected lostland values; and (2) cost estimates based on aggregateGDP loss. To recap briefly, the land valuemethod estimates how climate change may affectthe value of the land stock in HCMC. The first stepin the analysis was to determine land prices. Thearea subject to flooding both in extreme eventsand regular flooding was then determined underfuture scenarios using HydroGIS modeling. Onceaverage land price and flooding extent and durationwere estimated, the relationship between theflooding and the decline in the economic value ofthe flooded land was determined to calculate thecost of flooding due to climate change. The valueof land affected by flooding is assessed assuminglinear and quadratic relationships between floodduration and land values. The second approachused by HCMC is to calculate costs on the basis ofexpected losses in production (proxied by GDP) dueto climate-change-induced flooding. For each districtand for each year (2006 to 2050), the annual costof flooding was calculated and the discounted costssummed for the whole period to find the presentvalue of expected lost GDP. In the following pagesand the rest of this report, an average exchange ratefor 2008 of 1 USD = 16302.25 VND is used to convertVietnamese dong to U.S. dollars.Macro level analyses suggest that there willbe significant costs as a result of climatechangeThe study estimates that the losses in the economicvalue of land affected by 2050 climate change wouldrange from VND 100,358 billion ($6.15 billion) forregular flooding to VND 6,905 billion ($0.42 billion)for extreme flooding, assuming a quadraticrelationship between flood duration and land value(Table 4.13). 56 The HCMC study also reports climatechange costs assuming a linear relationshipbetween flood duration and land values. In thiscontext, the cost of climate change is estimated tobe VND 369,377 billion ($22.7 billion) for regularfloods and VND 111,678 billion ($6.9 billion) forextreme events. The highest costs (using either method)are borne by Binh Chanh district, district 9, Can Gio,and Nha Be district.56In all estimates, the costs of extreme events are muchsmaller than those of regular flooding because (a) floodingdue to extreme events lasts for a smaller number of daysthan that for regular flooding; and (b) the calculation offlooding assumes a return period of 30 years for extremeflooding. The expected value in any given year is therefore1/30th of the cost of an extreme event.Assessing Damage Costs and Prioritizing Adaptation Options | 69