Routledge Handbook of the Economics of Climate Change Adaptation

462 Pages·2014·4.55 MB·English

by  Anil Markandya

ROUTLEDGE HANDBOOK OF THE
ECONOMICS OF CLIMATE CHANGE
ADAPTATION
Climate change is one of the greatest challenges facing humankind owing to the great uncer-
tainty regarding future impacts, which affect all regions and many ecosystems. Many publica-
tions deal with economic issues relating to mitigation policies, but the economics of adaptation
to climate change has received comparatively little attention. However, this area is critical, and
a central pillar of any adaptation strategy or plan, which therefore merits the increase in atten-
tion it is receiving.
This book deals with the difficulties that face the economics of adaptation. Critical issues
include: uncertainty; baselines; reversibility, flexibility and adaptive management; distributional
impacts; discount rates and time horizons; mixing monetary and non-monetary evaluations and
limits to the use of cost-benefit analysis; and economy-wide impacts and cross-sectoral link-
ages. All of these are addressed in the book from the perspective of economics of adaptation.
Other dimensions of adaptation are also included, such as the role of low- and middle-income
countries, technology and the impacts of extreme events.
This timely book will prove essential reading for international researchers and policy makers
in the fields of natural resources, environmental economics and climate change.
Anil Markandya is Scientific Director of the Basque Centre for Climate Change (BC3),
an Ikerbasque Research Professor and an affiliate of the University of the Basque Country
(UPV/EHU).
Ibon Galarraga is Deputy Director and Research Professor at the Basque Centre for Climate
Change (BC3) and an affiliate of the University of the Basque Country (UPV/EHU).
Elisa Sainz de Murieta is a junior researcher at the Basque Centre for Climate Change
(BC3) and the University of the Basque Country (UPV/EHU).
‘Anil Markandya, one of the world’s experts on the economics of climate change, has assembled
a group of his peers to analyze the complex, under-researched issues involved in deciding how
best to adapt to the now unavoidable changes in climate. Adaptation to a warmer world is a
very critical item on our policy agenda, one that does not have nearly the prominence that it
merits. This volume is a step in redressing that imbalance.’
Geoffrey Heal, Donald C. Waite III Professor of Social Enterprise,
Columbia Business School, USA; Coordinating Lead Author,
IPCC WGII Fifth Assessment
‘In future years, this edited volume will be seen as a landmark for its timely and important
contribution to our understanding of the economics of climate change adaptation.’
Edward B. Barbier , John S. Bugas Professor of Economics,
Department of Economics and Finance, University of Wyoming, USA
‘This book represents a state of the art on the economics of adaptation and will be of great use
to all those working in this field.’
Martin Parry, Visiting Professor at Grantham Institute and Centre
for Environmental Policy, Imperial College London;
Co-Chair of IPCC WGII Fourth Assessment
ROUTLEDGE HANDBOOK OF
THE ECONOMICS OF CLIMATE
CHANGE ADAPTATION
Edited by
Anil Markandya, Ibon Galarraga
and Elisa Sainz de Murieta
First published 2014
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
711 3rd Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2014 selection and editorial material, Anil Markandya, Ibon Galarraga and Elisa Sainz de
Murieta; individual chapters, the contributors
The right of Anil Markandya, Ibon Galarraga and Elisa Sainz de Murieta to be identified
as authors of the editorial material, and of the individual authors as authors of their
contributions, has been asserted by them in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Routledge handbook of the economics of climate change adaptation /
[edited by] Anil Markandya, Ibon Galarraga, Elisa Sainz de Murieta.
pages cm — (Routledge international handbooks)
Includes bibliographical references and index.
1. Climate change mitigation—Economic aspects—Handbooks, manuals, etc.
2. Climatic changes—Economic aspects—Handbooks, manuals, etc. 3. Environmental
economics—Handbooks, manuals, etc. I. Markandya, Anil, 1945– II. Galarraga, Ibon.
QC903.R695 2013
363.738ʹ74—dc23
2013026363
ISBN: 978-0-415-63311-6 (hbk)
ISBN: 978-0-203-09520-1 (ebk)
Typeset in Bembo
by Apex CoVantage, LLC
CONTENTS
List of figures, tables and boxes viii
PART I
Economics and adaptation 1
1 An introduction to the economics of adaptation to climate change 3
Elisa Sainz de Murieta, Ibon Galarraga and Anil Markandya
2 State of the art on the economics of adaptation 27
Clemens Heuson , Erik Gawel and Paul Lehmann
3 International cooperation on adaptation to climate change 56
Jonathan Pickering and Dirk Rübbelke
PART II
Uncertainty, equity, valuation and efficiency 77
4 Synergies between adaptation and mitigation and the complexity
of REDD+ 79
Asbjørn Aaheim and Jorge H. García
5 Incorporating climate change into adaptation programmes and
project appraisal: Strategies for uncertainty 97
Anil Markandya
v
Contents
6 Distributional impacts: Intra-national, international and
inter-temporal aspects of equity in adaptation 120
Alistair Hunt and Julia Ferguson
7 Discounting 138
Ben Groom
8 The role of economic modelling for climate change mitigation
and adaptation strategies 169
Francesco Bosello
9 Ecosystem-based adaptation 193
Elena Ojea
PART III
Adaptation in activity sectors 211
10 Climate change and the energy sector: Impacts and adaptation 213
Alberto Ansuategi
11 Water for agriculture: Some thoughts on adaptation to climate
change from a policy perspective 228
Luis Garrote , Ana Iglesias and Alberto Garrido
12 Adaptation in agriculture 244
Doan Nainggolan , Mette Termansen and Marianne Zandersen
13 Adaptation in coastal areas 261
Iñigo J. Losada and Pedro Díaz-Simal
14 Climate change adaptation and human health 273
Aline Chiabai and Joseph V. Spadaro
15 Multi-sectoral perspective in modelling of climate impacts
and adaptation 301
Miles Perry and Juan Carlos Ciscar
16 Flood risk management: Assessment for prevention with
hydro-economic approaches 317
Sébastien Foudi and Nuria Osés-Eraso
vi
Contents
PART IV
Other dimensions of adaptation 335
17 Fast-growing countries and adaptation 337
Yan Zheng and Jiahua Pan
18 Economics of adaptation in low-income countries 360
Rodney Lunduka , Saleemul Huq , Muyeye Chambwera ,
Mintewab Bezabih and Corinne Baulcomb
19 Regional and local climate change adaptation policies in
developed countries 380
Valentine van Gameren
20 The role of technology in adaptation 395
John M. Callaway
21 Disaster risk management and adaptation to extreme events:
Placing disaster risk management at the heart of national
economic and fiscal policy 417
Tom Mitchell , Reinhard Mechler and Katie Peters
Index 437
vii
FIGURES, TABLES AND BOXES
Figures
1.1 M ain methodological issues to be considered in economics
of adaptation 6
2.1 F ramework for analysing adaptation as actions 30
2.2 D imensions of ‘optimal adaptation’ 34
2.3 T wo ways to determine the regional costs and benefits of adaptation 38
2.4 C riteria for evaluating adaptation measures 44
2.5 V ariables influencing government decision-making on adaptation 47
3.1 F unding pledged to dedicated multilateral adaptation funds 64
4.1 C arbon uptake paths with different discount rates 85
4.2 C oncentrations of constant kerosene emissions from charcoal
replacement, and the resulting added storage of carbon in forests 89
4.3 C onsumption composites and yields at farms with increasing size
under expected rate of earnings = 1 (black curves) and expected rate
of earnings = 0.8 (grey curves) 92
5.1 L evels of uncertainty according to van der Keur et al. (2008) 99
5.2 S tructural elements in the assessment of climate change impacts
and adaptation illustrating the uncertainty cascade 101
5.3 O verlaying climate change in the standard project cycle 106
6.1 E xamples of regional impacts of climate change in the
twenty-first century 124
6.2 N ational Adaptation Assessment Framework 128
7.1a T he UK government social discount rate term structure 140
7.1b T he French government social discount rate term structure 140
7.1c T he Norwegian government social discount rate schedule
(for risk-free projects) 141
viii
Figures, tables and boxes
7.2 T he Gamma Discounting and the UK term structures 153
7.3 P ositively Gamma Discounting vs. normative discounting 155
7.4 E mpirical term structures for the certainty equivalent
discount rate in the U.S. 158
7.5 D amages from the marginal ton of carbon from the DICE model 159
11.1 P rojected water demand changes aggregated at the country level
for the average A1B, E1 and RCP 8 scenarios for the 2080s 231
11.2 C omponents of the adaptive capacity for selected agro-climatic regions 233
11.3 S chematic of demand reliability analysis in the control and climate
change scenarios. 235
11.4 S pecific values of water availability for irrigation (in m3/ha.yr) in
European Mediterranean basins for the control period (left) and
the climate change period (right) 236
11.5 R elative change of water availability for irrigation in European
Mediterranean basins between the control and climate change
period in four hypotheses: (1) Upper left: A1B scenario KNMI model;
(2) Upper right: A1B scenario ETHZ model; (3) Lower left:
A1B scenario CRNM model; and (4) Lower right: E1 scenario
CRNM model 236
11.6 R elative change of water availability for irrigation in European
Mediterranean basins with respect to the climate change period
(2070–2100) in four policy hypotheses: (1) Upper left: Improvement
of water resources systems management; (2) Upper right: Allocation
of hydropower reservoirs for regulation; (3) Lower left: Reduction of
environmental flow requirements and (4) Lower right: Improvement
of urban water use efficiency. Results are computed for the A1B
emission scenario and the KNMI model 238
12.1 O ptimal level of adaptation given future climatic outcome and
level of mitigation effort 254
14.1 H ealth burdens of climate change 274
14.2 G lobal costs of climate change in billions USD per year 288
14.3 A nnual estimates of adaptation costs to climate change, billion
USD per year. UNDP estimates include costs for disaster response
systems (2 B$) and poverty reduction programs (40 B$) 290
14.4 P rojected adaptation costs by region and decade
(billion $ 2005 per year, undiscounted) 292
16.1 F lood risk assessment: Hazard, exposure, vulnerability and risk 322
16.2 F lood risk assessment in Amurrio: Hazard, exposure,
vulnerability and risk 324
16.3 D amage-probability curves and expected annual damage in the
Urola river basin 325
16.4 D erivation of the annual average damages avoided 330
ix