Economics of Climate Change Adaptation: Regional Consultation on Capacity Building Needs in Asia

24-26 Four Seasons Hotel, Bangkok Thailand

ECONOMICS OF CLIMATE CHANGE ADAPTATION – A CASE OF KHULNA CITY WATER SECTOR PROJECTS

Professor A.K. Enamul Haque PhDDepartment of EconomicsUnited International UniversityDhaka, Bangladesh

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Climate Change Impact Pathways

Sequences of change - GHGs emission Global warming Changes in the climateClimate Events

rapid onset events or climate extremes Cyclone, major flood, flash flood, GLOF

Slow onset events Salinity, SLR, flood, storm surges, seasonal

change, seasonal temperature fluctuations, etc.

How climate change affect us?

Climate Events Causes

Mortality and Morbidity impacts DAMAGE to assets and properties LOSS of ecological services

Provisional services Regulating services Cultural services Supporting services

These events eventually affect people.

How to understand the loss and damage?

Events loss and damage because of Exposure of people and their asset to the event Intensity of the event Vulnerability due to socio-economic status

As such climate evens trigger additional risks Development Projects should be planned to

be robust enough to withstand these risks Need adaptation

How to study economics of adaptation?

Understand the impacts of climate events (arising due to climate change) on people Define the specific climate events in question. Find the extent (probable) of loss and damage the

event might cause if it occursDesign adaptation strategies

Adaptation means building resilience to withstand climate events

Both soft and hard strategies needs to be understood Find the costs

This means that the cost of adaptation is now defined.

Climate Change and Public Expenditure

Khulna City is a case study on understanding climate change impact on the city people and design appropriate adaptation strategies

Issues at hand Define the climate events related to water

infrastructure of the city due to climate change Design adaptation strategies to reduce or remove

impacts Separate cost of adaptation from other project costs? Objective is to claim the ‘additional costs’ from climate

funds/climate resilient fund/climate adaptation funds/climate trust fund?

Khulna City Water Sector

Khulna is a south-western metropolitan city with a population of about a million

It is a major city of the countrySalinity in water is risingWater-logging is increasingCity is planning to upgrade its water

infrastructure – Water supply and Drainage system

This study is designed to understand the CC impact on this plan.

Khulna City

31 Wards1,000,000 Population (approx.)

RiversEast – Rupsha and BhairabWest – Mayur

Drainage through Mayur

Land elevation 2.5m from the mean sea level

Climate Induced Threats-Water logging-Salinity Intrusion-Cyclone/Storms

Socio-economic team

Study Method

Climate Scenarios

Data Collection

Optimistic, Pessimistic and Realistic Scenarios

How to assess ‘future’ damage and loss?

We needed appropriate counterfactual scenarios for future situations1.Look at super cyclones or major flooding occurred in recent past2.Look at highly saline regions3.Look at past coping and adaptive behavior of people of Khulna

Climate model results

Sea level rise in Bangladesh

Integrate local environment from GCM resluts

Now results are used in Regional Hydraulic Model and in Urban Drainage Model.

Calibration and modeling

Local conditions Rivers Canals Wetlands Drainage system Sea water level

rise Rainfall Socio-economic

variations Future city

expansion plan

Changes in land use-2030 and 2050

2050 water-logging by Ward

Measuring climate change impacts

Economy in 2030 and 2050?

Changes in socio-economic variables

Adaptation options

Issues at hand for CBA

Damage estimates due to climate events per episode (average of 10 years value)

Damage function

Estimation of avoided damages (benefits)

2050 water logging

Impact of Adaptation

Damage estimates …

Elements of BCA

Benefit cost ratio

Benefit cost ratio

Learning

CC adaptation study Requires multi-disciplinary team Needs to understand climate events, climate risks Use future climate scenarios Needs to develop socio-economic scenarios for the

future Identify additional costs in project Justify which adaptation measures make sense. Access international finance mechanism to pay for

climate related adaptation costs.