Economic Analysis of Climate Change Adaptation Strategies in Selected Coastal Areas in Indonesia, Philippines and Vietnam

by Maripaz L. Perez , Asa Jose U. Sajise, Jaimie Kim B. Arias, Paul Joseph B. Ramirez, Agus Heri Purnomo, Shaneil R. Dipasupil, Patrick A. Regoniel, Kim Anh T. Nguyen and Glaiza J. Zamora

This report is an account of a cross-country study that covered  Vietnam, Indonesia and the Philippines. Covering four sites (one  each in Indonesia and Vietnam) and two sites in the Philippines,  the study documented the impacts of three climate hazards  affecting coastal communities, namely typhoon/flooding, coastal  erosion and saltwater intrusion. It also analyzed planned  adaptation options, which communities and local governments  can implement, as well as autonomous responses of households  to protect and insure themselves from these hazards. It employed  a variety of techniques, ranging from participatory based  approaches such as community hazard mapping and Focus  Group Discussions (FGDs) to regression techniques, to analyze  the impact of climate change and the behavior of affected  communities and households.

Results show that households in coastal communities face a  confluence of risks and often adapt simultaneously to these risks.  These risks have the most impact on the sources and types of  livelihoods of households. Foregone income due to these risks  was in fact found to be higher than the value of damages from  loss of assets including damage to houses. Foregone income in  the end affected consumption patterns. Using the Vulnerability  as Expected Poverty (VEP) as a measure, it was found that the  incidence of vulnerable households is highest in Palawan,  Philippines (56%), followed by Vietnam (46%), Batangas,  Philippines (42%) and then Indonesia (35%). The mean  vulnerability estimate for Palawan is 0.51, which means that  on average the probability that households will fall below the  minimum consumption level (at which they will be considered  poor) is 51%. For Vietnam, the mean vulnerability is 0.43, while  Batangas and Indonesia have mean estimates of 0.38 and 0.37,  respectively.

Various planned adaptation options, which communities and  local governments can implement, were studied using cost  effectiveness analysis. A consistent and common result across  three sites is that ecosystem-based approaches (or natural  barriers such as mangroves) are more cost effective than hard  infrastructure investments. There also seem to be a preponderance of protective measures when, in fact, the main impact or risk from  these hazards is really on the livelihoods of coastal-based  communities. In Batangas, for example, it was found that  livelihood diversification is a viable planned adaptation measure. Factors that determine autonomous or private responses to  climate hazards were also assessed. It was found that there are  geographical and spatial differences in adaptation patterns,  suggesting that households react rationally to the degree of  threats from the hazards. For instance, households near riverbanks  are more likely to employ autonomous adaptation strategies  against flooding. Evidence was also found that planned adaptation  “crowds out” private or autonomous adaptation. Presence of  natural barriers such as mangroves and riverbank rehabilitation  schemes result in less likelihood of autonomous adaptation to  flooding and saltwater intrusion being pursued. Income from  external sources, such as disaster relief, also tends to crowd out  autonomous adaptation. Social capital, which was represented  by the number of people from whom the respondents can turn  to for loans with some level of certainty, had a positive effect on  the likelihood of autonomous adaptation. There was also some  gender dimension in adaptation. In particular, households with  more female members have lower likelihood of pursuing  autonomous adaptation to flooding and typhoon, but higher  adaptation to saltwater intrusion. Unfortunately the study did  not assess the reasons for this behavior in more detail, as this  was not part of the original design.

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Economy and Environment Program for Southeast Asia