OECD Environment Working Papers
This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.
- Forthcoming titles
- ISSN: 19970900 (online)
- https://doi.org/10.1787/19970900
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
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.
Keywords: flood management, global warming, urban planning, climate change, natural disasters, adaptation, insurance, government policy, sustainable development
JEL:
O18: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure;
R52: Urban, Rural, Regional, Real Estate, and Transportation Economics / Regional Government Analysis / Regional Government Analysis: Land Use and Other Regulations;
Q01: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / General / Sustainable Development;
E20: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General;
R11: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Regional Economic Activity: Growth, Development, Environmental Issues, and Changes;
Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming
- Click to access:
-
Click to download PDF - 1.42MBPDF