Source: http://www.wri.org/blog/2015/02/numbers-economic-impacts-climate-changelower-mekong-basin-0, Accessed 30 May 2015
Published on World Resources Institute (http://www.wri.org)
By the Numbers: Economic Impacts of
Climate Change in the Lower Mekong
Basin
by John Talberth [1] - February 24, 2015
The Lower Mekong River Basin (LMB) spans Laos, Cambodia, Thailand and Vietnam,
and supports 60 million people. The region is also widely recognized as highly
vulnerable to the impacts of climate change. Photo credit: William Cho, Flickr
The Lower Mekong River Basin (LMB) spans Laos, Cambodia, Thailand and Vietnam,
and supports 60 million people. The region is also widely recognized as highly
vulnerable to the impacts of climate change.
As the world continues to warm, what will be the economic toll of climate change
impacts in the Mekong region? New research [2]shows that climate change could
damage $18 billion worth of infrastructure and decrease economic productivity
by $16 billion annually by 2050.
In a new report [2] completed for USAID’s Mekong Adaptation and Resilience to
Climate Change project (MARCC [3]), my colleagues and I used a methodology
known as values at risk (VAR) to assess the value of existing urban and rural
infrastructure vulnerable to increased flooding and sea level rise, as well as the annual
value of economic activity that will be exposed to increased heat, drought, storms
and shifts in vegetation. In the LMB, these include worker productivity, infrastructure
services (the annual GDP generated by infrastructure at risk), hydroelectric power
generation, ecosystem services and agricultural output.
The results of our preliminary analysis provide a sobering assessment of what’s at
stake in the LMB. In particular, we found that:

The annual value of worker productivity, infrastructure services, agricultural output,
hydroelectric power and ecosystem services at risk from climate change in the LMB is
at least $16 billion per year.

Worker productivity represents the largest share of annual economic values at
risk (52 percent). This is because so much of the LMB’s economy depends on
outdoor workers engaged in construction, agriculture, fisheries and collection of nontimber forest products. These workers are vulnerable to a range of climate risks (e.g.
changing flood, drought, and storm patterns), but our research points especially
toward the risk of greater incidence and severity of heat-induced health disorders.
Rash, fatigue, cramps, exhaustion and heat stroke could take a significant toll on
these workers’ lives and livelihoods if nothing is done to protect them.

A conservative estimate of infrastructure at risk of inundation in areas exposed to
sea level rise and inland flooding is at least $18 billion. This includes more than
$11 billion in rural infrastructure and nearly $7 billion in cities.

To put these values into perspective, the $16 billion annual VAR translates into
roughly 7 – 30 percent of rural GDP in the LMB.
What Do We Do Now?
The VAR approach does not generate precise estimates of how climate change costs
will unfold over time, or where such costs are likely to manifest at a fine spatial scale.
However, it does provide useful information to guide overarching policy directions
that could improve climate resilience in the sectors likely to experience a high
economic toll.
For example, adaptation strategies to reduce the economic costs of lost worker
productivity include measures such as guidelines for workplace heat assessment and
protection, strengthening national health systems to respond to the specific needs of
working populations, and changes in work practices such as increased rest periods
during the heat of the day. Some current climate adaptation strategies—such as
Cambodia’s national plan— do not incorporate these or any other measures related
to worker productivity.
Other important steps include:

City leaders need to reduce the amount of pavement so as to combat the “urban
heat island effect,” a phenomenon induced by human activities that causes
metropolitan areas to be significantly warmer than its surrounding rural areas. This
will require redirecting subsidies away from conventional urban growth towards
green, more compact and connected cities that can make life more habitable as
temperatures soar.

Governments should refrain from building out new urban infrastructure in areas with
anticipated increases in freshwater flooding and sea level rise.

To protect ecosystem services and the livelihoods that depend on them, governments
must reverse the decades-long policy of converting natural ecosystems to commercial
crops and support robust ecological restoration programs.
Our VAR assessment helps document the economic benefits of taking these steps
towards a climate-resilient economy.
As the world continues to warm, so must national and local leaders develop plans to
mitigate and adapt. Quantifying the economic impacts of drought, sea level rise,
flooding and more are a good place to start.
Learn more:

USAID: Final Three Sectoral Reports Released to Complete the Project Climate
Study [4]

USAID: Values at Risk from Climate Change in the Lower Mekong Basin: Interview
with WRI Senior Economist and VAR Report Author [5]
Source URL: http://www.wri.org/blog/2015/02/numbers-economic-impacts-climatechange-lower-mekong-basin-0
Links
[1] http://www.wri.org/profile/john-talberth
[2] http://mekongarcc.net/sites/default/files/usaid_marcc_values_at_risk_report_with_exesum-
revised.pdf
[3] http://www.mekongarcc.net/
[4] http://mekongarcc.net/news/final-three-sectoral-reports-released-complete-project-climatestudy#sthash.44gDOqkB.dpuf
[5] http://mekongarcc.net/blog/interview-john-talberth-wri-senior-economist-values-risk-reportclimate-impacts-lower-mekong-ba#sthash.8PFDjEwP.dpuf