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Flood risks, climate change impacts and adaptation benefits in Mumbai: an initial assessment of socio-economic consequences of present and climate change induced flood risks and of possible adaptation options

Hallegatte, Stéphane, Henriet, Fanny, Patwardhan, Anand, Narayanan, K., Ghosh, Subimal, Karmakar, Subhankar, Patnaik, Unmesh, Abhayankar, Abhijat, Pohit, Sanjib, Corfee-Morlot, Jan, Herweijer, Celine, Ranger, Nicola, Bhattacharya, Sumana, Bachu, Murthy, Priya, Satya, Dhore, K., Rafique, Farhat, Mathur, P. and Naville, Nicolas (2010) Flood risks, climate change impacts and adaptation benefits in Mumbai: an initial assessment of socio-economic consequences of present and climate change induced flood risks and of possible adaptation options. OECD Environment Working Papers, No. 27. OECD.

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Abstract

Managing risks from extreme events will be a crucial component of climate change adaptation. In this study, we demonstrate an approach to assess future risks and quantify the benefits of adaptation options at a city-scale, with application to flood risk in Mumbai. In 2005, Mumbai experienced unprecedented flooding, causing direct economic damages estimated at almost two billion USD and 500 fatalities. Our findings suggest that by the 2080s, in a SRES A2 scenario, an ‘upper bound’ climate scenario could see the likelihood of a 2005-like event more than double. We estimate that total losses (direct plus indirect) associated with a 1-in-100 year event could triple compared with current situation (to $690 – $1890 million USD), due to climate change alone. Continued rapid urbanisation could further increase the risk level. Moreover, a survey on the consequences of the 2005 floods on the marginalized population reveals the special vulnerability of the poorest, which is not apparent when looking only through a window of quantitative analysis and aggregate figures. For instance, the survey suggests that total losses to the marginalized population from the 2005 floods could lie around $250 million, which represents a limited share of total losses but a large shock for poor households. The analysis also demonstrates that adaptation could significantly reduce future losses; for example, estimates suggest that by improving the drainage system in Mumbai, losses associated with a 1-in-100 year flood event today could be reduced by as much as 70%. We show that assessing the indirect costs of extreme events is an important component of an adaptation assessment, both in ensuring the analysis captures the full economic benefits of adaptation and also identifying options that can help to manage indirect risks of disasters. For example, we show that by extending insurance to 100% penetration, the indirect effects of flooding could be almost halved. As shown by the survey, the marginalized population has little access to financial support in disaster aftermaths, and targeting this population could make the benefits of such measures even larger. While this study explores only the upper-bound climate scenario and is insufficient to design an adaptation strategy, it does demonstrate the value of risk-assessment as an important quantitative tool in developing city-scale adaptation strategies. We conclude with a discussion of sources of uncertainty, and of risk-based tools that could be linked with decision-making approaches to inform adaptation plans that are robust to climate change.

Item Type: Monograph (Working Paper)
Official URL: http://www.oecd.org/home/
Additional Information: © 2010 OECD
Library of Congress subject classification: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
J Political Science > JA Political science (General)
Journal of Economic Literature Classification System: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E20 - General
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O20 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: No. 27
Date Deposited: 07 Dec 2011 15:36
URL: http://eprints.lse.ac.uk/39983/

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