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ECONOMICS OF CLIMATE
CHANGE ADAPTATION – A
CASE OF KHULNA CITY
WATER SECTOR PROJECTS
Professor A.K. Enamul Haque PhD
Department of Economics
United International University
Dhaka, Bangladesh
Economics of Climate Change Adaptation: Regional Consultation on
Capacity Building Needs in Asia
24-26
Seasons
Hotel, Bangkok
Thailand
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Climate Change Impact Pathways
Sequences of change  GHGs emission  Global warming
 Changes in the climate
Climate Events
 rapid
onset events or climate extremes
Cyclone, major flood, flash flood, GLOF
 Slow onset events
Salinity, SLR, flood, storm surges, seasonal
change, seasonal temperature fluctuations, etc.
How climate change affect us?
 Climate Events
 Causes
Mortality and Morbidity impacts
 DAMAGE to assets and properties
 LOSS of ecological services
 Provisional services
 Regulating services
 Cultural services
 Supporting services

 These events eventually affect people.
How to understand the loss and damage?
 Events  loss and damage because of
 Exposure of people and their asset to the event
 Intensity of the event
 Vulnerability due to socio-economic status
 As such climate evens trigger additional risks
 Development Projects should be planned to be
robust enough to withstand these risks

Need adaptation
How to study economics of adaptation?
 Understand the impacts of climate events (arising
due to climate change) on people

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Define the specific climate events in question.
Find the extent (probable) of loss and damage the event might
cause if it occurs
 Design adaptation strategies
 Adaptation means building resilience to withstand climate
events
 Both soft and hard strategies needs to be understood
 Find the costs
 This means that the cost of adaptation is now
defined.
Climate Change and Public Expenditure
 Khulna City is a case study on understanding climate
change impact on the city people and design
appropriate adaptation strategies
 Issues at hand
 Define the climate events related to water infrastructure of the
city due to climate change
 Design adaptation strategies to reduce or remove impacts
 Separate cost of adaptation from other project costs?
 Objective is to claim the ‘additional costs’ from climate
funds/climate resilient fund/climate adaptation funds/climate
trust fund?
Khulna City Water Sector
 Khulna is a south-western metropolitan city with a
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population of about a million
It is a major city of the country
Salinity in water is rising
Water-logging is increasing
City is planning to upgrade its water infrastructure –
Water supply and Drainage system
This study is designed to understand the CC impact
on this plan.
Khulna City
31 Wards
1,000,000 Population (approx.)
Rivers
East – Rupsha and Bhairab
West – Mayur
Drainage through Mayur
Land elevation 2.5m from the mean
sea level
Climate Induced Threats
-Water logging
-Salinity Intrusion
-Cyclone/Storms
Socio-economic team
Study Method
Climate Scenarios
Data Collection
Optimistic, Pessimistic and Realistic Scenarios
How to assess ‘future’ damage and loss?
We needed appropriate counterfactual scenarios for future situations
1. Look at super cyclones or major flooding occurred in recent past
2. Look at highly saline regions
3. Look at past coping and adaptive behavior of people of Khulna
Climate model results
Sea level rise in Bangladesh
Integrate local environment from GCM resluts
 Now results are used in Regional Hydraulic Model
and in Urban Drainage Model.
Calibration and modeling
 Local conditions
 Rivers
 Canals
 Wetlands
 Drainage system
 Sea water level rise
 Rainfall
 Socio-economic
variations
 Future city
expansion plan
Changes in land use2030 and 2050
2050 water-logging by Ward
Measuring climate change impacts
Economy in 2030 and 2050?
Changes in socio-economic variables
Adaptation options
Issues at hand for CBA
Damage estimates due to climate events per
episode (average of 10 years value)
Damage function
Estimation of avoided damages (benefits)
2050 water logging
Impact of Adaptation
Damage estimates …
Elements of BCA
Benefit cost ratio
Benefit cost ratio
Learning
 CC adaptation study
 Requires multi-disciplinary team
 Needs to understand climate events, climate risks
 Use future climate scenarios
 Needs to develop socio-economic scenarios for the future
 Identify additional costs in project
 Justify which adaptation measures make sense.
 Access international finance mechanism to pay for climate
related adaptation costs.