V I E T N A M CO U N T RY ST U DY i Economics of Adaptation to Climate Change VIETNAM
ii E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G EEACC Publications and Reports1. Economics of Adaptation to Climate Change: Synthesis Report2. Economics of Adaptation to Climate Change: Social Synthesis Report3. The Cost to Developing Countries of Adapting to Climate Change: New Methods and EstimatesCountry Case Studies:1. Bangladesh: Economics of Adaptation to Climate Change2. Bolivia: Adaptation to Climate Change: Vulnerability Assessment and Economic Aspects3. Ethiopia : Economics of Adaptation to Climate Change4. Ghana: Economics of Adaptation to Climate Change5. Mozambique: Economics of Adaptation to Climate Change6. Samoa: Economics of Adaptation to Climate Change7. Vietnam: Economics of Adaptation to Climate ChangeDiscussion Papers:1. Economics of Adaptation to Extreme Weather Events in Developing Countries2. The Costs of Adapting to Climate Change for Infrastructure3. Adaptation of Forests to Climate Change4. Costs of Agriculture Adaptation to Climate Change5. Cost of Adapting Fisheries to Climate Change6. Costs of Adaptation Related to Industrial and Municipal Water Supply and Riverine Flood Protection7. Economics of Adaptation to Climate Change-Ecosystem Services8. Modeling the Impact of Climate Change on Global Hydrology and Water Availability9. Climate Change Scenarios and Climate Data10. Economics of Coastal Zone Adaptation to Climate Change11. Costs of Adapting to Climate Change for Human Health in Developing Countries12. Social Dimensions of Adaptation to Climate Change in Bangladesh13. Social Dimensions of Adaptation to Climate Change in Bolivia14. Social Dimensions of Adaptation to Climate Change in Ethiopia15. Social Dimensions of Adaptation to Climate Change in Ghana16. Social Dimensions of Adaptation to Climate Change in Mozambique17. Social Dimensions of Adaptation to Climate Change in Vietnam18. Participatory Scenario Development Approaches for Identifying Pro-Poor Adaptation Options19. Participatory Scenario Development Approaches for Pro-Poor Adaptation: Capacity Development Manual
V I E T N A M CO U N T RY ST U DY iEconomics of Adaptationto Climate ChangeVI ETNAM Ministry of Foreign Affairs Government of the Netherlands
V I E T N A M CO U N T RY ST U DY iiiContentsAcronyms viiAcknowledgments ixExecutive Summary xi1 Introduction 12 Projections of Climate Change and Sea Level Rise 5Regional Projections 5National Projections 6Climate Scenarios 93 Agriculture 11The Impact of Climate Change on Crop Production 15The Macroeconomic Consequences of Climate Change 19Adaptation to Climate Change 22Macroeconomic Effects of Adaptation 264 Aquaculture 29The Growth of Aquaculture in Vietnam 29The Impact of Climate Change on Aquaculture 32Economic Analysis of Adaptation 375 Forestry 43The Impact of Climate Change on Forests 44Adaptation Measures in the Forestry Sector 516 Adaptation at the Local Level: Social Analysis 55Social Vulnerability to Climate Change 55Adaptation to Climate Change at the Local Level: A Social Analysis 66
iv E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E7 Coastal Ports 73Coastal Ports and Sea Level Rise 73Adaptation Costs and Options 758 Lessons Learned 77References 80Annexes (available on line at www.worldbank.org/eacc)TablesES-1. Regional Vulnerability to Climate Change xiiES-2. Change in Crop Production in 2050 due to Climate Change with No Adaptation xivES-3. Macroeconomic Effects of Climate Change Without/with Adaptation in 2050 xv1. Projected Climate Change for Southeast Asia, 2080–99 against 1980–99 52. Projected Increases in Annual Average Temperatures relative to 1980–99 73. Projected Changes in Annual Rainfall relative to 1980–99 74. Projected Sea Level Rise in Vietnam 75. Increases in Annual Average Temperatures by Climate Scenario and Zone 86. Increases in Annual Precipitation by Climate Scenario and Zone 87. Possible Impacts of Climate Change on Agriculture 118. Exposure to Hydro-climatic Risks by Agroecological Zone 129. Harvested Areas and Crop Yields by Agroecological Zones, 2007 1310. Percentage Shares of Crop Production by Agroecological Zone, 2007 1311. Typical Seasonal Crop Rotations by Agroecological Zone 1412. Potential Impacts of Climate Change on Crop Yields 1713. Impact of Yield Changes on Production by Scenario in 2030 and 2050 1814. Total Impact of Climate Change on Production by Scenario in 2050 1815. Population, GDP and Employment Projections, 2005–50 2016. Changes in Baseline GDP and Aggregate Consumption due to Climate Change 2117. Changes in Value-Added by Sector due to Climate Change 2118. Changes in Household Consumption by Income Group due to Climate Change 2219. Expansion in Crop Irrigation by 2050 2520. Changes in Real GDP and Aggregate Consumption Without/with Adaptation 2521. Present Values of Changes in Aggregate Consumption 2722. Adaptation Results by Sector and Region, 2050 2723. Changes in Household Consumption by Income Group Without/with Adaptation 27
V I E T N A M CO U N T RY ST U DY v24. Aquaculture Development Targets up to 2020 3225. Main Salinity and Temperature Requirements for Catfish and Shrimp 3426. Estimates of Catfish Pond Area (ha) that will be Subjected to Increments 36 of Maximum Flooding Depths in the Rainy Season under 50-cm SLR Scenario 3727. Land Use Types that will be Subjected to > 4 ppt Maximum Salinity Intrusion 43 in the Dry Season under 50-cm SLR Scenario28. Forest Area and Cover by Region, 2006 4429. Classification of Forest Types by Location and Climate Characteristics 4830. Impact of Climate Change on Stand Volumes of 7-year Acacia mangium 4831. Estimated Areas Climatically Suited to some Forest Types 4932. Dependency on Different Income Streams by Region 5833. Regional Distribution of Minority Populations 5934. Statistics on Female Status by Region 6035. Literacy and Education Rates, 2001 6336. Household Access to Water, 2005 6437. Drivers and Impacts of Climate Change on Coastal Ports 75Figures1. Framework for Analysis of the Impacts of Climate Change 152. Flood Inundation with 30 cm Sea Level Rise in the Mekong Delta 163. Value of Production from Capture Fisheries and Aquaculture 294. Aquaculture Area and Production in Vietnam’s Southern Provinces, 2009 305. Value of (a) Brackish Water and (b) Catfish Produced in the Mekong River Delta 316. Global Warming and Fisheries/Aquaculture: Potential Impacts 337. Areas in An Giang, Dong Thap and Can Tho Provinces Subjected to Increments 35 of Maximum Flooding Depths for 50-cm SLR Scenario8. Areas Subjected to Increments of Maximum Water Salinity for 50-cm SLR scenario 369. Steps in the Economic Analysis 3810. Reduction in Net Income from Catfish Farming due to Climate Change 39 without Adaptation 11. Reduction in Net Income from Shrimp Farming due to Climate Change 39 without Adaptation 12. Poverty Map of Vietnam at District Level 5713. Survey Location 6714. Most Important Seaports 7415. Volume and Distribution of Cargo Throughput 74Boxes1. CGE Modeling 19
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V I E T N A M CO U N T RY ST U DY viiAcronymsADB Asian Development Bank MoLISA Ministry of Labor, Invalids, andAEZ Agroecological Zone Social AffairsCGE Computable general equilibrium MoNRE Ministry of Natural Resources and EnvironmentCMI Climate moisture index NCAR National Center for AtmosphericCSIRO Commonwealth Scientific and Research Industrial Research Organisation NGO Non-governmental organizationDFID Department for International Development (UK) NTP-RCC National Target Program to Respond to Climate ChangeEACC Economics of Adaptation to Climate Change ppt Parts per thousandFHH Female-headed household SIWRP Southern Institute for Water Resources PlanningGCM General circulation model SLR Sea level riseGDP Gross domestic product UNDP United Nations DevelopmentGIS Geographical information system ProgrammeGoV Government of Vietnam VHLSS Vietnam Household LivingGSO General Statistics Office Standards SurveyIAE Institute for Agriculture and VNĐ Vietnamese Đong EnvironmentIPCC Intergovernmental Panel on Climate Change Note: Unless otherwise noted, all dollars are U.S.MARD Ministry of Agriculture and Rural dollars, all tons are metric tons. Development
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V I E T N A M CO U N T RY ST U DY ixAcknowledgmentsThis report is the outcome of a research effort Resources Planning); Philip Adams, James Giesecke,to which both national and international experts Michael Jerie, and Nhi Hoang Tran (Centre ofhave contributed in the context of the Economics Policy Studies, Monash University); To Trung Nghia,of Adaptation of Climate Change study (EACC) Le Hung Nam, Le Hong Tuan, Truong Trongimplemented by the World Bank and funded by Luat, and Vu Dinh Huu (Institute of Water Resourcesthe governments of the Netherlands, Switzerland, and Planning); Pham Quang Ha, Mai Van Trinh,and the United Kingdom. Tran Van The, and Vu Duong Quynh (Institute for Agricultural Environment); Bao Thanh, Luong VanThe team effort in Vietnam was led and coor- Viet, Nguyen Thi Phuong, and Bui Chi Namdinated by Benoit Laplante with the support of (Sub-Institute of Hydrometeorology and EnvironmentHuynh Thi Thanh Thuy. The synthesis report of South Viet Nam); Tuyen Nghiem, Hue Le, andwas edited by Gordon Hughes (Consultant). We Huoung Vu Dieu (Center for Natural Resources andwould like to thank the following individuals and Environmental Studies); Pamela McElwee (Arizonaorganizations: Sergio Margulis (Team leader of State University); Dang Thu Phuong (Challenge tothe EACC study), Douglas J. Graham (Environ- Change); Nguyen Van Be, Le Canh Dung, Nguyenment Country Sector Coordinator), Laurent Hieu Trung, and Sinh Le Xuan (Can Tho Univer-Cretegny, Robin Mearns, Steve Jaffee, Anne sity); Suan Pheng Kam, Marie Caroline Badjeck,Kuriakose, Ian Noble, and Kiran Pandey (Coor- Michael Phillips, and Robert Pomeroy (World Fishdinator EACC country studies) (World Bank); Center); Louise Teh and Lydia The (University ofDavid Corderi (Consultant); Tingju Zhu and Zhe British Columbia); Be Nam Vo Thi (Sub-NationalGuo (International Food Policy Research Institute); Le Institute for Agricultural Planning and Projection); andHeng Nam, Nguyen Thuy Hang, Ha Le Thanh, Hien Than Thi and Hue Nguyen Thu (Centre forand Thuy Dung (Institute of Water Resources Plan- Marinelife Conservation and Community Development).ning); Nguyen Ngoc Anh, Nguyen Xuan Hien, Do We would also like to thank Robert Livernash forDuc Dung, Nguyen Vu Huy, Nguyen Huy Khoi, editorial services, Jim Cantrell for editorial inputThi Lan Huong, Le Ngoc Anh, Tran Duc Dung, and production coordination, and Hugo Mansillaand Cao Thi Tu Trinh (Southern Institute of Water for editorial and production support.
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V I E T N A M CO U N T RY ST U DY xiExecutive SummaryThe Economics of Adaptation to Climate et al. 2010, Almeida et al. 2010), social (McElweeChange (EACC) study aims to support countries et al. 2010), and coastal ports (VIMARU 2010).to understand the risks posed by climate change Further details can be found in the individualand to design better strategies to adapt to climate sector reports prepared by teams of national andchange. In doing so, a key objective of the study international experts.is to help decision makers at the national level tointegrate robust adaptation strategies into theirdevelopment plans and budgets in a context of Vulnerability tohigh uncertainty, competing needs, and limited Climate Changefinancial resources. In addition to providing esti-mates of adaptation costs at the global level,1the EACC study has implemented country-level Vietnam is a long narrow country consisting ofstudies for Bangladesh, Bolivia, Ethiopia, Ghana, an extensive coastline, two major river deltas, andMozambique, Samoa, and Vietnam.2 mountainous areas on its eastern and northeast- ern borders. Vietnam is heavily exposed to theThis report provides a synthesis of key findings risks of weather variability and climate change.of sector studies undertaken in Vietnam in the Its vulnerability to weather risks has given thecontext of the EACC study. The sector studies country experience in designing and implement-were on agriculture (Zhu & Guo 2010), a separate ing measures to mitigate the effects of droughts,computable general equilibrium [CGE] analysis flooding, storms, and similar events on agriculturebased on agriculture findings (Adams et al. 2010), and other sectors of the economy. Assessing theaquaculture (Kam et al. 2010), forestry (Phuong potential impacts of climate change and deter- mining how best to adapt represents a new chal-1 At the global level, the EACC study estimates that it will cost lenge, for which past experience may be a guide between $70 and $100 billion each year to adapt to climate change over the period 2010 to 2050. but which is accompanied by large uncertainties.2 The study was funded by the governments of the United Kingdom, Netherlands, and Switzerland. Further details may be In June 2009, the Ministry of Natural Resources found at: www.worldbank.org/eacc. In addition, the synthesis report from Vietnam and the six underlying national sector and Environment (MoNRE) published Viet- reports can be downloaded from the Environment site of the nam’s official scenario for climate change. The World Bank’s web site for Vietnam: www.worldbank.org/vn/ environment. MoNRE scenario falls in the middle of a range of
xii E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E Table ES-1 Regional Vulnerability to Climate Change North South Central Mekong North- North- Red River Central Central High- South- River west east Delta Coast Coast lands east Delta Region NW NE RRD NCC SCC CHL SE MRD EXPOSURE Storms 1 3 4 4 4 2 2 3 Flooding 1 1 4 4 4 2 2 4 Salinity 0 0 1 2 2 0 1 4 SLR 0 0 2 2 2 0 3 4 Landslides 3 3 1 3 3 2 1 1 Drought 2 2 1 4 4 4 2 2 Average 1.2 1.5 2.2 3.2 3.2 1.7 1.8 3.0 SENSITIVITY Poverty 4 3 2 4 2 4 1 2 Economic 4 4 2 4 3 4 2 2 diversification Education 4 3 1 2 2 2 1 3 Health & 4 1 2 1 1 1 1 3 sanitation Ethnic 4 3 0 1 1 4 1 2 minorities Women & 4 3 1 2 3 3 1 2 children Migrants 0 0 2 2 1 4 4 1 Urban 0 0 2 1 1 0 4 3 households Average 3.0 2.1 1.5 2.1 1.8 2.8 1.9 2.3alternative climate scenarios for Vietnam when now in the rainy season months, leading to anthese are arranged by their climate moisture increase in the frequency, intensity, and durationindices. In addition to the MoNRE scenario, the of floods, and to an exacerbation of drought prob-EACC study has made use of two other climate lems in the dry season. Sea level is projected to risescenarios—Dry (IPSL-CM4) and Wet (GISS- approximately 30 cm by 2050 and up to 75 cm byER)—which represent the extremes of the distri- 2100 under the medium scenario.bution by climate moisture indices. An analysis of vulnerability to climate change atRainfall projections across seasons are of particu- the sub-national level was carried out as part oflar interest. The dry seasons are projected to get the social analysis. Exposure to climate change isdrier, with the March–May rainfall reductions assessed by considering the number of householdsbeing higher in the southern part of the country; potentially threatened by the effects of storm,the wet seasons are projected to get wetter, with the flooding, salinity intrusion, sea level rise (SLR)June–August rainfall increases being higher in the and storm surges, landslides and flash floods,northern part of the country. Hence, it is expected and drought. Each region is assigned to catego-that rainfall will be concentrated even more than ries ranked from 0 to 4 (low to severe exposure).
V I E T N A M CO U N T RY ST U DY xiiiSimilarly, sensitivity to the impacts of climate is population growth, urbanization, and other vari-assessed on criteria that reflect vulnerability to the ables without climate change. This provides theconsequences of climate change based on specific reference scenario against which the impacts ofsocioeconomic characteristics—poverty, economic climate change without and with adaptation arediversification, education, and health and sani- measured.tation—and for specific social groups, includingethnic minorities, women and children, migrant Step 2: Consider the relevant climate variables forpopulations, and urban populations. Again, each the sector and identify changes projected to 2050region is assigned to categories ranked from 0 to 4 or beyond for each of the climate scenarios. This(low to extreme sensitivity). Unweighted averages makes use of detailed information on precipita-of the classifications were computed to gener- tion by season and/or region.ate indices of exposure and sensitivity. These areshown in Table ES-1 (see also Figure 13 in main Step 3: Identify the impact of changes in climatetext which shows the regions on a map). on resource productivity and land use. This included, for example, the effect of changes inThe analysis indicates that exposure to the effects seasonal temperatures on rice yields or of seasonalof climate change is highest in the Central Coastal precipitation on coffee yields, as well as the effectregions (NCC & SCC) and in the Mekong River of flooding or saline intrusion on the amount ofDelta. On the other hand, sensitivity to the effects land that can be used for rice production in theof climate change is highest in the North-West Mekong River Delta.and Central Highland regions. The correlationbetween exposure and sensitivity is negative, so Step 4: Using geographical information systemsthat regions with high exposure tend to have low (GIS) and other techniques, combine the infor-sensitivity and vice versa. The only region with mation collected in Steps 2 and 3 to estimate theindices that are above the average on both mea- overall impact of climate change on land use andsures is the Mekong River Delta. production by comparing estimates of yields and production under (a) no climate change, and (b) with climate change but no adaptation.Methodology Step 4A: For agriculture, incorporate the resultsThe sectors were chosen based on interest of the from Step 4 into a macroeconomic model to assessGovernment, availability of data, the opportunity the consequences of changes in agricultural outputto pilot different methodological approaches, and on agricultural prices, trade, GDP, economic activ-the feasibility of carrying out an analysis. Some ity in other sectors, and household consumption.other sectors that were not looked at (e.g., urbaninfrastructure) could well be be subject to more Step 5: Identify opportunities for (a) autonomousimportant climate change impacts. Detailed stud- adaptation undertaken by farmers and other pro-ies were carried out for agriculture (crop produc- ducers in responses to changes in climate andtion), aquaculture, forestry, and coastal ports, as other conditions, and (b) planned adaptation,well as a broader study on social vulnerability. which is likely to be initiated and at least partlyEach of the sector studies follows a broadly simi- funded by the government.lar approach with the following steps: Step 6: Estimate the production of crops, timber,Step 1: Establish a baseline scenario consisting of and so on under the new climate conditions afterprojections of land use, production, value-added, the adaptation measures have been implemented.
xiv E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G EThis provides the basis for identifying (a) the water availability for rainfed and irrigated crops,effect of climate change with adaptation (the dif- and other factors to estimate the impact of cli-ference between the baseline scenario and the mate change on crop yields.scenario of climate change with adaptation), and(b) the impact of adaptation itself (the difference Changes in yields without adaptation vary widelybetween the scenarios of climate change without across crops, agroecological zones, and climateand with adaptation). scenarios. As for other EACC studies, the results reported do not take account of CO2 fertiliza-Step 6A: As for Step 4A, incorporate the results tion, because of the uncertainties about the extentfrom Step 6 into the macroeconomic model of this effect; taking this into effect might haveto assess the benefits of adaptation in terms of reduced the severity of some predicted productiv-aggregate and sectoral economic activity and ity declines. For rice, the Dry scenario would leadhousehold consumption. to reductions in yields ranging from 12 percent in the Mekong River Delta to 24 percent in the RedMany of the adaptation options are “no regrets” River Delta. The primary factors influencing riceoptions that increase yields or production even yields are the increase in average temperatureswithout climate change. This is not invariably and seasonal reductions in runoff.the case, for example there would be no need toupgrade ports if sea level and storm surges do There would be more extensive inundation ofnot change. However, for agriculture and other crop land in the rainy season and increased salinesectors it is difficult to identify measures that are intrusion in the dry season as a consequence ofonly justified under a specific set of climate con- the combination of sea level rise and higher riverditions. For these sectors, adaptation is often a flooding. For the Mekong River Delta, it is esti-matter of doing things that would in any event mated that about 590,000 ha of rice area couldhave been economic under a wide range of cli- be lost due to inundation and saline intrusion,mate conditions. which accounts for about 13 percent of today’s rice production in the region.Agriculture Table ES-2 shows the potential impact of climate change without adaptation under alternative cli-The impact of the alternative climate scenarios mate scenarios on production of six major cropson crop production has been examined using pro- or crop categories relative to a 2050 baseline ofjections of runoff, which affects the availability of no climate change. Paddy rice production mayirrigation water, plus agronomic models that take fall by 5.8 (MoNRE) to 9.1 (Dry) million tonsaccount of temperature and rainfall patterns, (mmt) per year. Table ES-2 Change in Crop Production in 2050 due to Climate Change with No Adaptation (million metric tons)Climate Paddy ricescenario Maize Cassava Sugar cane Coffee VegetablesImpact Yields Sea level Total Yields Yields Yields Yields YieldsDry -6.7 -2.4 -9.1 -1.1 -1.9 -3.7 -0.4 -1.7Wet -5.8 -2.5 -8.4 -1.0 -2.6 -2.9 -0.4 -3.1MoNRE -3.4 -2.4 -5.8 -0.3 -0.6 -1.4 -0.1 -0.9
V I E T N A M CO U N T RY ST U DY xvThese figures are not forecasts of what will actually hap- Macroeconomic impacts. As in the other EACCpen. Farming involves a continuous process of country studies, a computable general equilibriumadaptation to weather, technology, economic and (CGE) model has been used to examine the macro-other influences, so adaptation will certainly take economic impacts of climate change. In Vietnam,place. Rather, these projections provide a starting the CGE model was only used to take into accountpoint—based on the best available information the effects of climate change and adaptation forand subject to substantial uncertainty—for (a) the agricultural sector, so it does not attempt tounderstanding the potential importance of cli- take account of all of the macroeconomic impactsmate change for crop production holding other of climate change. The CGE model establishesfactors constant, and (b) assessing the type and a baseline composition of economic activity upscale of adaptation that may be required, which to 2050, given data and assumptions about inter-will require a combination of autonomous adap- industry linkages for 158 sectors, including regionaltation (by farmers) and planned adaptation (as a crop production for the six crops examined above,consequence of government policy). consumption for ten rural/urban household groups, population, investment, and productivityFurther, this assessment of the potential impact growth. This is used to simulate the effect of exoge-of climate change on crop production needs to be nous “shocks;” that is, deviations from the baselineinterpreted in a larger context. Changes in diets scenario, such as a reduction in crop productionand consumer preferences with falling demand due to climate change. The model is run assumingfor rice, market liberalization, trade (which will that the aggregate level of investment and savingsexpose Vietnam to lower-cost competition), and remains constant in real terms, so that aggregateconversion opportunities to aquaculture and consumption moves with gross domestic productmore salt-tolerant varieties will all have important (GDP). The model takes account of the effects ofeffects on the demand for and the supply of agri- exogenous shocks on industry and services, interna-cultural products over the coming decades. The tional trade, commodity prices and the distributionimpacts of climate change have to be assessed of consumption. A broad picture of its results mayagainst a background of wider economic and be obtained by examining changes in total GDP,social development. aggregate consumption, and other variables under Table ES-3 Macroeconomic Effects of Climate Change Without/with Adaptation in 2050(Percentage deviations from baseline with no climate change) No adaptation (%) With adaptation (%) Adaptation benefits (%) Dry Wet MoNRE Dry Wet MoNRE Dry Wet MoNRE (1) (2) (3) (4) (5) (6) (7) (8) (9) GDP -2.4 -2.3 -0.7 -1.1 -0.7 0.7 1.3 1.6 1.3 Aggregate consumption -2.5 -2.5 -0.7 -1.4 -0.8 0.6 1.1 1.7 1.3 Agricultural value-added -13.9 -13.5 -5.8 -3.8 -3.4 5.4 10.0 10.1 11.2 REGIONAL GDP North-Central Coast -6.6 -6.1 -2.6 0.5 -0.3 4.8 7.1 5.8 7.4 South-East 1.1 0.8 1.0 0.0 1.1 0.2 1.1 0.3 0.9 RURAL HOUSEHOLD CONSUMPTION Bottom quintile -6.5 -6.3 -2.6 -1.9 -1.4 2.4 4.7 4.9 5.0 Top quintile -1.6 -1.7 -0.4 -1.5 -1.0 0.0 0.1 0.7 0.0
xvi E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G Ethe alternative climate scenarios in 2050 relative to baseline, and (b) extending the area of irrigateda baseline with no climate change. land by about 688,000 ha, roughly half for rice and the remainder mainly for maize and coffee.Total GDP and aggregate consumption in 2050 The total cost of these measures is estimated atwith no adaptation will be 2.4–2.3 percent lower about $160 million per year at 2005 prices with-than the baseline under the Dry/Wet scenarios out discounting over the period 2010–50.but only 0.7 percent lower under the MoNRE sce-nario, shown in columns (1) through (3) of Table Deviations in GDP and other macroeconomicES-3. The reason for the reduction in GDP is the variables from the baseline with adaptation fordecline in agricultural value-added of 13.9/13.5 the alternative climate scenarios are shown inpercent under the Dry/Wet scenarios, which is columns (4) through (6) of Table ES-3, whilemarginally offset by small increases in value-added columns (7) through (9) give the net benefits ofin industry and services. There are significant dif- adaptation after allowing for the costs that areferences between the impact of climate change on incurred. The adaptation measures substantiallydifferent regions, as illustrated by the estimates for reduce the impact of climate change underchanges in regional GDP for the North- Central all scenarios. The expenditures on adaptationCoast and South-East regions. The gain in the for agriculture are clearly justified as the ratioSouth-East is a consequence of the concentration of their benefits to the costs that are incurredof industry and services in the region. is much greater than 1. The combination of the MoNRE scenario with adaptation leads toThe impact on household incomes is skewed, an increase in aggregate consumption, indicat-with greater losses for those in the bottom rural ing that some, perhaps many, of the adaptationquintile (the poorest 20 percent of rural house- measures are “no regrets” options that would beholds arranged by expenditure per person) than justified even without climate change.for the top quintile. Poor rural and urban house-holds are most vulnerable because they rely An important aspect of adaptation is that it off-more heavily on the agricultural sector for their sets most of the disproportionate impact of cli-incomes and they spend a higher proportion of mate change on poorer households. The bottomtheir income on food, which becomes relatively quintile of rural households benefit most frommore expensive. adaptation and the gap between the changes in household consumption for the bottom andAdaptation in agriculture. The study exam- top quintiles is almost eliminated. Adaptationined a range of adaptation options including partly or wholly offsets both the reduction inautonomous adaptations undertaken by farmers agricultural incomes and the increase in foodas well as planned adaptation underpinned by prices that accompany climate change withoutgovernment spending in areas that will enhance adaptation.the capacity of farmers to adapt. The autono-mous adaptations include changes in sowing Investments in flood and coastal protection weredates, switching to drought-tolerant crops, adop- not incorporated in the macroeconomic analysis.tion of salinity-tolerant varieties of rice, adoption Separate studies have indicated that the costs ofof new varieties for other crops, and switching to building/upgrading sea dikes and flood defensesrice-fish rotations. The planned adaptations focus to protect urban infrastructure and the most valu-on (a) increased spending on research, develop- able agricultural land would be about 1 percentment, and extension with the goal of raising aver- of total investment—about $540 million per yearage crop yields by 13.5 percent relative to the at 2005 prices.
V I E T N A M CO U N T RY ST U DY xviiOther Sectors that is suitable for humid semi-deciduous forest, which would be replaced by other forest types. Mangrove forests will be affected by sea level riseAquaculture. Aquaculture, especially in the unless they are able to migrate inland. The areaMekong River Delta, is an important source of of land under plantation forests with short rota-employment and rural income. It is estimated tions has increased rapidly over the past 20 years.that some 2.8 million people are employed in A forestry growth model suggests that climatethe sector, while export revenue is expected to be change will increase the variability of plantationabout $2.8 billion in 2010. Higher temperatures, yields across the country without having a majoran increased frequency of storms, sea level rise, impact on the average yield. Thus, an importantand other effects of climate change are likely to adaptation need will be to ensure the best matchaffect fish physiology and ecology as well as the between soil, climate, and management practicesoperation of aquaculture. Some fish species, such to obtain the highest yields from plantations.as catfish, may grow more rapidly with highertemperatures but be more vulnerable to disease. A range of adaptation options was considered.The main impacts of climate change on aquacul- The key measures identified were (a) changes inture seem likely to be a consequence of increased land use planning to facilitate the migration offlooding and salinity. mangroves; (b) adoption of plantation species and methods of silviculture that are more resilient toParts of the aquaculture sector, particularly cat- droughts; (c) improvements in pest management,fish farming, currently face uncertain economic including genetic selection and integrated pestprospects, particularly as a result of rising prices control strategies; and (d) use of herbicides or bio-for feedstuffs and the costs of maintaining water logical controls to limit the effect of exotic weedquality. Without adaptation, it is likely that climate species on tree growth. The financial costs ofchange will reduce profit margins, so that only adaptation are likely to be modest, but the institu-the most efficient aquaculturists who adopt best tional issues may be more difficult to deal with.practices will survive. Successful adaptation willrequire a combination of better feed conversion Coastal ports. Along its 3,200 km coastline,and improvements in marketing together with Vietnam has a total of 116 ports. In addition,investments in upgrading dikes to reduce flood- new terminals are being constructed and planneding and salinity intrusion that will benefit other all along the coastline, particularly in the southsectors as well as aquaculture. Semi-intensive and around Ho Chi Minh City and in the northintensive shrimp producers may incur additional around Hai Phong. Given the nature of its loca-costs of water pumping to maintain water and tion, this infrastructure is at risk from sea-level risesalinity levels. Since the industry is both capital- and storm surges. Impacts include acceleratedintensive and growing rapidly, adaptation is likely depreciation of structures and flooding of portto be autonomous with the costs borne by opera- facilities such as warehouses.tors. The total cost of adaptation is estimated at anaverage of $130 million per year from 2010–50, Adaptation options examined in the study includewhich is equivalent to 2.4 percent of total costs. (a) raising quay walls, (b) improving surface drain- age to reduce flooding, and (c) increased expendi-Forestry. The impact of climate change on for- ture on the maintenance and replacement of portests is likely to be complex and long term. For infrastructure. The cost of adaptation for all portsnatural forests, the analysis suggests that there would be less than $500 million, or about $12 mil-will be a substantial reduction in the area of land lion per year without discounting at 2005 prices.
xviii E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G ESocial Analysis and switching to salinity-tolerant varieties of rice. The diversity of preferred adaptation responses reflected the impressive variety of Vietnam’s vul-Up to now government policies have focused on nerability zones and confirm the need for a mixsector-wide assessments for the whole country of both autonomous and planned adaptation, aand on “hard” adaptation measures—such as mix of hard and soft options, and adaptation tosea dikes, reinforced infrastructure, and durable be carried out at the national, subnational, andbuildings. Little attention has been paid to “soft” community levels.adaptation measures like increasing institutionalcapacity or the role of collective action and social Lessons andcapital in building resilience. Most adaptationoptions identified at the field sites and during par- Recommendationsticipatory scenario development workshops wereaimed at improving response capacity and disas- Climate change will have a significant impact onter risk reduction—such as forecasting, weather some regions and sectors of Vietnam’s rural econ-monitoring—and managing climate risk. Nota- omy. Still, in macroeconomic terms the impactsbly, adaptation options that reduce poverty and of climate change on agriculture and related sec-increase household resilience or that integrate tors, even with no adaptation, appear to be rela-climate change into development planning were tively modest. In practice, there will be substantialnot emphasized. autonomous adaptation even without active gov- ernment intervention, since farmers will changeOverall, many of the adaptation options observed the crops and crop varieties that they grow andat the field sites and/or proposed in workshops their methods of farming.were highly cost-effective and do not requirelarge expenditures. Moreover, they were largely The major concern is the extent to which cli-in line with the adaptation options considered mate change will hit poor households, partlyfor the climate scenarios in the sector analyses. because of the decline in agricultural incomesThese adaptation measures included shifting and partly because of an increase in food pricesplanting dates, adopting drought-tolerant crops, relative to the general cost of living. The low- est 20 percent of households—either urban or rural—arranged by household expenditure per person will experience larger reductions in real standards of living due to climate change than the top 20 percent of households. Thus, the primary focus of policies to adapt to climate change for the sectors covered under the EACC studies, should be to protect the poor, the vulnerable, and those least able to respond to changing climatic stresses. The goal should be to provide farmers and others with the tools and resources that will enable them to respond to cli- mate change itself and to the new risks that will accompany climate change. The key elements will be:
V I E T N A M CO U N T RY ST U DY xix■■ Increased expenditures on research, devel- change. Policies and systems that can cope effec- opment, and extension for crop production, tively with current weather variability will be aquaculture, and forestry to develop new crop more successful in adapting to future climate varieties that are more tolerant to drought, change than those that cannot. Strengthening the salinity, higher temperatures early in the grow- capacity of the rural sector to cope with current ing season, and so on. Both the public and weather variability and build resilience into such private sectors should be involved in efforts to systems will yield benefits both now and in the increase yields and productivity. future. It is also important to collect, analyze, and report data on how the climate is changing in dif-■■ Investment in expanding irrigation infrastruc- ferent regions of the country so that those who ture, especially in the central regions where have to take account of climate change in plan- the opportunities for irrigation expansion are ning new infrastructure or implementing invest- greatest. In the short term, this should build ment programs should have access to the best upon achieving fuller utilization of existing possible information. irrigation infrastructure and improvements in operations and maintenance. Climate change, including sea level rise, will affect the country’s infrastructure and require expen-■■ Increased spending on the maintenance and ditures on adaptation. The case study of coastal extension of coastal and flood defenses to min- ports indicated the lesson that the costs of adapta- imize the impacts of sea inundations, salinity tion are likely to be modest. The total cost of pro- intrusion, and river flooding, especially in the tecting existing ports that are exposed to flooding Mekong River and Red River Deltas. as a result of a higher sea level, combined with greater storm surges, is estimated as no more thanMany of these expenditures would be justified $500 million over 40 years, or about 1 percenteven without climate change, so adaptation to of planned investment in ports over the periodclimate change is primarily a matter of building 2010–30.upon no-regrets measures. Under the intermediateMoNRE climate scenario, the program of agri- An equally important lesson from the case studycultural adaptation outlined in this study would is that it is essential to plan ahead for climateincrease agricultural incomes relative to the base- change. Ports that are built over the next 10–20line, especially in the Central Highlands region, years should be designed to cope with sea levelsillustrating the general benefits of the strategy. and storms to which they may be exposed 50 or more years from now. It may be cheaper to buildIf this program of adaptation were to be imple- margins of resilience and safety into new infra-mented, the adverse impacts of climate change structure than to upgrade assets during the courseon poorer households would largely be avoided. of their life. The same lesson emerges from theThere would still be a net loss of agricultural analyses for infrastructure and coastal protectionvalue-added and aggregate consumption in the undertaken as part of the EACC global study.Wet and Dry climate scenarios, but the magni- The total cost of adaptation for these sectorstude of the losses would be significantly smaller amounts to about 2 percent of total investmentand the skewed impact on the distribution of for the Global Wet (NCAR) scenario, and aboutincome would be corrected. 1.3 percent of total investment for the Global Dry (CSIRO) scenario, on the assumption that adap-Year-to-year weather variability is much greater tation measures are combined with new invest-than the long-term trends associated with climate ments anticipating climate change up to 2100.
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V I E T N A M CO U N T RY ST U DY 1IntroductionAs a long narrow country with an extensive and (b) assessing the costs and benefits of mea-coastline, one of the world’s major river deltas, sures to respond to climate change.3and mountains on its eastern and northeast-ern borders, Vietnam is heavily exposed to the A question of key interest pertains to the identifi-risks of weather variability and climate change. cation of the nature of the adaptation measuresIts vulnerability to weather risks has given the available for key sectors of economic activitiescountry experience in designing and imple- and regions of the country, and the assessment ofmenting measures to mitigate the effects of the possible costs and benefits of these measures.droughts, flooding, storms, and similar events The current absence of such information repre-on agriculture and other sectors of the econ- sents a significant factor limiting the capacity ofomy. Assessing the potential impacts of climate governments at all levels to plan and implementchange—and how best to adapt—represents a the most cost-effective adaptation options.new challenge, for which past experience maybe a guide, but which is accompanied by large The Economics of Adaptation to Climate Changeuncertainties. (EACC) study aims to support countries to understand the risks posed by climate changeThe potential consequences of climate change and to design better strategies to adapt to cli-have received considerable attention in Vietnam mate change. A key objective of the study is(World Bank 2010). The government has pre- to help decision makers at the national level topared the country’s National Target Program to integrate robust adaptation strategies into theirRespond to Climate Change (NTP-RCC), which development plans and budgets in a context ofwas adopted in 2008. The strategic objectives of high uncertainty, competing needs, and limitedthe NTP-RCC focus on assessing the impacts of financial resources. In addition to providing esti-climate change on sectors and regions in specific mates of adaptation costs at the global level,4periods and developing plans to respond to cli-mate change to ensure the sustainable develop- 3 Prime Minister, Decision No. 158/2008/QĐ-TTg on Approval of thement of the country. For this purpose, the tasks to National Target Program to Respond to Climate Change, Hanoi, Decem-be implemented over the period 2009–15 include: ber 2, 2008.(a) enhancing the understanding of the impacts 4 At the global level, the EACC study estimates that it will cost between $70 and $100 billion each year to adapt to climateof climate change on socioeconomic activities; change over the period 2010 to 2050.
2 E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G Ethe EACC study has implemented country-level the “final word” on the economics of adaptationstudies for Bangladesh, Bolivia, Ethiopia, Ghana, in Vietnam. In most cases the studies highlightMozambique, Samoa, and Vietnam.5 areas of significant uncertainty pertaining to the projected changes in climate variables, the rela-This report provides a synthesis of the key find- tionship between these changes and their impactsings of the sector studies undertaken in Vietnam on resource productivity, and the vulnerability asin the context of the EACC study. The sectors well as the adaptive capacity of those who will becovered by the study are agriculture, aquacul- affected. The findings presented here should beture, forestry, social, and coastal ports. Further regarded as a starting point to provide guidancedetails can be found in the individual sector for future investigations.reports prepared by teams of national and inter-national experts. Not all vulnerable sectors have Each of the sector studies follows a broadly simi-been studied, and the studies themselves could lar approach with the following steps:not consider all possible impacts or adaptationmeasures. The analyses do not aim to provide Step 1: Establish a baseline scenario consisting of projections of land use, production, value-5 The study was funded by the governments of the United added, population growth, urbanization, and Kingdom, Netherlands, and Switzerland. Further details may other variables without climate change. This be found at www.worldbank.org/eacc. In addition, the synthesis report from Vietnam and the six underlying national sector provides the reference scenario against which reports can be downloaded from the Environment site of the the impacts of climate change without and with World Bank’s web site for Vietnam: www.worldbank.org/vn/ environment. adaptation are measured.
V I E T N A M CO U N T RY ST U DY 3Step 2: Consider the relevant climate variables for Step 5: Identify opportunities for (a) autono-the sector and identify changes projected to 2050 mous adaptation undertaken by farmers andor beyond for each of the climate scenarios. For other producers in response to changes in cli-some purposes, this requires detailed information mate and other conditions, and (b) plannedon, say, precipitation by season and/or region. An adaptation, which is likely to be initiated andimportant qualification is that general circulation at least partly funded by the government. Suchmodels (GCMs), used to generate scenarios, are opportunities include the development and/ornot generally designed to produce reliable pro- adoption of different crop varieties or new spe-jections in such detail. The general direction of cies that respond better to the changed climatechange may be well-understood, but there may conditions, plus investments in irrigation andbe wide margins of uncertainty about the pre- other infrastructure.cise projections for specific grid cells in specificmonths. Hence, the necessity of using detailed cli- Step 6: Estimate the production of crops, timber,mate information requires an acceptance of rela- and so on under the new climate conditions aftertively wide margins associated with the projected the adaptation measures have been implementedchanges. Some of the potential differences may be as a basis for calculating the extent to which adap-captured by examining different climate scenarios, tation can offset the impacts of climate changebut large residual uncertainty cannot be removed. without adaptation.Step 3: Identify the impact of changes in climate Step 6A: As for Step 4A, incorporate the resultson resource productivity and land use. This from Step 6 into the macroeconomic modelincludes, for example, the effect of changes in sea- to assess the benefits of adaptation in terms ofsonal temperatures on rice yields or of seasonal aggregate and sectoral economic activity andprecipitation on coffee yields as well as the effect household consumption.of flooding or saline intrusion on the amount ofland that can be used for rice production in the A final remark about the adaptation options.Mekong River Delta. In many cases, these are “no regrets” options that increase yields or production even with-Step 4: Using GIS and other techniques, combine out climate change. This is not invariably thethe information collected in Stages 2 and 3 to case, for example there would be no need toestimate the overall impact of climate change on upgrade ports if sea level and storm surges didland use and production. not change. However, for agriculture and other sectors it is difficult to identify measures that areStep 4A: For agriculture, incorporate the results only justified under a specific set of climate con-from Step 4 into a macroeconomic model to assess ditions. For these sectors, adaptation is often athe consequences of changes in agricultural output matter of doing things that may be economicon agricultural prices, trade, GDP, economic activ- under a wide range of climate conditions, butity in other sectors, and household consumption. either more or better.
4 T WO E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E
V I E T N A M CO U N T RY ST U DY 5Projections of ClimateChange and Sea Level RiseIn this section, projected changes in climate vari- minimum, maximum, and median (50 percent)ables and sea level are briefly described at the values among the 21 models, for temperatureregional and national levels. A general overview (°C) and precipitation ( percent) changes. Theof historical and projected future climate change results suggest seasonal temperature increasesis provided in World Bank (2010). of 2.4–2.7°C and precipitation increases of 6–7 percent as median estimates.Regional Projections Because climate change predictions incorpo- rate the results of many physical and chemicalTable 1 summarizes the projected changes in models, each containing their own uncertaintiesseasonal air temperature and precipitation in and errors, there is a high level of uncertaintySoutheast Asia, as reported by the Intergov- about the projections under these scenarios.ernmental Panel on Climate Change (IPCC, In their assessment of eleven GCMs in the2007). Regional averages of temperature and Asian-Australian monsoon region, Wang et al.precipitation projections were calculated from (2004) found that the models’ ability to simu-a set of 21 global models in the multi-model late observed inter-annual rainfall variationsensemble approach, for 1980–99 and 2080–99 was poorest in the Southeast Asian portion ofunder the A1B SRES. The table shows the the domain. Table 1 Projected Climate Change for Southeast Asia, 2080–99 against 1980–99 Temperature response (°C) Precipitation response (%) Season Min Median Max Min Median Max DJF 1.6 2.5 3.6 -4 6 12 MAM 1.5 2.7 3.9 -4 7 17 JJA 1.5 2.5 3.8 -4 7 17 SON 1.6 2.4 3.6 -2 6 21 Annual 1.5 2.5 3.7 -2 7 15 Source: Adapted from Christensen et al. (2007)
6 E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G ELacombe (2009) compares projected temperature by 0.5 to 0.7°C over the period 1958–2007. Theand precipitation changes for the general South- report further notes that winter temperatureseast Asian region from different downscaled have increased faster than summer temperatures,GCMs reported by various studies on regional and that temperatures in northern Vietnam haveprojections of climate change. While the trend increased faster than those in the south. Annualis clear regarding rising air temperatures, there average temperatures observed in Hanoi, Dan-is greater variation in projections of precipitation ang, and Ho Chi Minh City have all been higherchanges among different climate models, differ- over 1991–2000 decade than the 1931–40 decade,ent emission scenarios, and across different parts and still higher in 2007 than over the 1991–2000of the region. Projections on changes in seasonal- decade. These observations are all consistent withity of rainfall patterns generally suggest the ten- measured increases in global average temperature.dency toward wetter rainy seasons and drier dryseasons, but with geographical variation over the Table 2 shows the projected increase in tem-land and sea masses. perature assessed against average temperatures recorded during the period 1980–99. The pro-An increase in the frequency of extreme weather jected increases in average temperature are slightlyevents such as heat waves and storms is also pro- higher in the northern part of the country (2.4–jected throughout Southeast Asia (Walsh 2004). 6.8°C by 2100) than in the south (1.6–2.0°C).Similarly, it has been projected that an increasein sea surface temperature of 1°C will lead to Precipitation. As noted in the official scenarioan increase of 3–5 percent in tropical cyclone (MoNRE 2009), changes in rainfall patterns areintensities (Knutson and Tuleya 2004). How- complex, seasonal, and region-specific. Overever, changes in ocean temperatures only follow the last century, changes in annual average rain-land temperatures with a considerable lag, so any fall were not systematically either upward orincrease in storm intensities up to 2050 is likely to downward: periods with declining rainfalls werebe modest. followed by periods with increasing rainfalls. However, the annual rainfall appears to have decreased slightly over climate zones in the North,National Projections and increased over climate zones in the South. Despite the lack of obvious and definite trendsIn June 2009, MoNRE published Vietnam’s official in historical data, annual rainfall is projected toclimate change scenario (MoNRE 2009). While increase by 4–5 percent in Northern Vietnam byclimate change estimates were developed for three 2060 and by 7–8 percent by 2100. The changes indifferent emissions scenarios low (B1), medium southern Vietnam are rather smaller, 1.5–3 per-(B2), and high (A2 and A1FI), the medium emis- cent by 2100 (Table 3).sion scenario (B2) was retained by MoNRE forthe purpose of impact assessment and adaptation As important as the projected changes in annualplanning. The official scenario includes projected rainfall are, projected changes in rainfall acrosschanges in temperature, rainfall, and sea level seasons are likely to be of greater significance.over the period 2020 to 2100. Projected changes The dry seasons are projected to get drier, within temperature and rainfall are estimated for each the March–May rainfall reductions being higherof Vietnam’s seven climatic zones. in the southern part than in the northern part. The wet seasons are projected to get wetter, withTemperature. According to MoNRE (2009), the the June–August rainfall increases being higherannual average temperature in Vietnam increased in the northern part than in the southern part.
V I E T N A M CO U N T RY ST U DY 7 Table 2 Projected Increases in Annual Average Temperatures relative to 1980–99 (MoNRE medium scenario, °C) Climatic zone 2020 2040 2060 2080 2100 North-West 0.5 1.0 1.6 2.1 2.6 North-East 0.5 1.0 1.6 2.1 2.5 North Delta 0.5 0.9 1.5 2.0 2.4 North-Central 0.5 1.1 1.8 2.4 2.8 South-Central 0.4 0.7 1.2 1.6 1.9 Central Highlands 0.3 0.6 1.0 1.4 1.6 South 0.4 0.8 1.3 1.8 2.0 Table 3 Projected Changes in Annual Rainfall relative to 1980–99 (MoNRE medium scenario, %) Climatic zone 2020 2040 2060 2080 2100 North-West 1.4 3.0 4.6 6.1 7.4 North-East 1.4 3.0 4.7 6.1 7.3 North Delta 1.6 3.2 5.0 6.6 7.9 North-Central 1.5 3.1 4.9 6.4 7.7 South-Central 0.7 1.3 2.1 2.7 3.2 Central Highlands 0.3 0.5 0.9 1.2 1.4 Table 4 Projected Sea Level Rise in Vietnam (cm) 2020 2040 2060 2080 2100 Low scenario 11 23 35 50 65 Medium scenario 12 23 37 54 75 High scenario 12 24 44 71 100 South 0.3 0.6 1.0 1.2 1.5Hence, it is expected that rainfall will be concen- 50 years. These observations are comparable withtrated even more than now in the rainy season the global sea level rise trend (MoNRE 2009).months, leading to an increase in the frequency,intensity, and duration of floods, and to an exac- Sea-level rise is projected to rise at an increasingerbation of drought problems in the dry season. rate over the period 2020–2100 (Table 4), lead- ing to an increase of approximately 30 cm bySea level rise. Observations along the Vietnam- 2050 and up to 75 cm by 2100 under the mediumese coast show that sea level has been rising at scenario. As indicated earlier and as pointed inthe rate of approximately 3 mm per year during MoNRE’s official scenario, it is possible thatthe period of 1993–2008, consistent with the rate IPCC projected changes in sea levels have beenof 3.1 mm/yr reported at the global level over underestimated (Dasgupta et al. 2009).the period 1990–2000 (World Bank 2010). At theHon Dau station, in the past 50 years, sea level The expected changes in climate variables androse approximately by about 20 cm, in the past sea level discuss above form the background for
8 E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E Table 5 Increases in Annual Average Temperatures by Climate Scenario and Zone (˚C) Dry (IPSL) Wet (GISS) MoNRE Agroecological zone 2030 2050 2030 2050 2030 2050NW 1.2 2.2 0.9 1.4 0.8 1.3NE 1.2 2.2 0.9 1.4 0.7 1.3RRD 1.2 2.2 0.9 1.4 0.7 1.3NCC 1.1 2.0 0.9 1.4 0.9 1.6SCC 0.9 1.6 1.0 1.6 0.5 0.9CHL 0.8 1.6 0.9 1.6 0.5 0.9SE 0.8 1.5 0.8 1.3 0.6 1.0MRD 0.8 1.5 0.8 1.3 0.6 1.0Table 6 Increases in Annual Precipitation by Climate Scenario and Zone (%) Dry (IPSL) Wet (GISS) MoNRE Agroecological zone 2030 2050 2030 2050 2030 2050NW -16.5 -12.7 9.8 19.4 1.7 2.8NE -16.5 -11.8 10.5 13.5 1.8 3.0RRD -14.2 -9.2 8.6 10.1 2.1 3.5NCC -11.9 -7.0 7.6 10.0 2.2 3.6SCC -7.8 -9.7 5.2 5.7 1.6 2.8CHL -11.0 -5.6 4.3 6.0 0.1 0.0SE -10.7 -5.0 5.1 6.3 0.7 1.3MRD -10.5 -6.3 5.2 6.3 0.9 1.5
V I E T N A M CO U N T RY ST U DY 9estimating the impacts of climate change on eco- emission scenario was included in the analysisnomic sectors of activities as well as the nature, to represent the middle of the distribution ofcosts, and benefits of adaptation measures. GCMs in terms of the climate moisture index. Temperature increases and precipitation changes were estimated in all agroecological zones for allClimate Scenarios three climate change scenarios in the two future periods, 2030 and 2050.To take account of differences in the projec-tions generated by different GCMs, a selection The results are shown in Tables 5 and 6. Theof climate scenarios was based on the ranking Dry scenario is warmer than the Wet scenarioof GCMs with sufficient geographical detail by and both are warmer than the MoNRE scenario.the climate moisture index (CMI) for the IPCC However, the largest differences concern theSRES A2 emission scenarios. There were 14 changes in annual precipitation. For most of theGCMs that met the criteria for consideration. country, the Dry scenario projects a significantThe historical climate for 1971–2000 is roughly decline up to 2030, which is partly reversed inin the middle of the 14 projections, implying the period 2030–50. On the other hand, the Wetthat there is nearly an equal opportunity for the scenario shows a substantial increase in annualclimate to become dryer or wetter by 2050, if precipitation, especially in northern Vietnam,each of the projections had similar probabilities but again the rate of change is greater up to 2030of being true. The driest (IPSL-CM4) and wet- than in the following two decades. In contrast, thetest (GISS-ER) scenarios were used as the Dry MoNRE scenario shows much smaller changes inand Wet scenarios in the analysis. In addition, precipitation, so that it lies in between the DryMoNRE’s climate projection for the medium and Wet scenarios.
10 TH REE E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E
V I E T N A M CO U N T RY ST U DY 11AgricultureDespite the country’s rapid rate of industrialization Table 7 Possible Impacts of Climatein the last two decades, agriculture remains a major Change on Agricultureeconomic sector in Vietnam. It generates employ- Climate change Possible impactsment and income for a significant part of the Decreased crop yields due to heat stress and increased rate ofpopulation.6 Climate change is expected to affect evapotranspirationthe sector significantly and in a number of differ- Increasing Increased livestock deaths due to temperatureent ways (Table 7). Much attention has focused on heat stress Increased outbreak of insect peststhe potential impact of changes in temperature on and diseasesrice yields, but any assessment of the impact of Increased frequency of drought andand adaptation to climate change on agriculture floods causing damages to crops Changesmust take account of changes in land use due to in rainfall Changes in crop growing seasonsalinization and flooding. Not all of the impacts Increased soil erosion resulting from more intense rainfall and floodswill be negative because higher temperatures and/ Loss of arable landsor changes in rainfall may permit the cultivation of Sea level rise Salinization of irrigation watersome crops in areas where they were previously not Source: Adapted from Agricultural Development Bankviable. Hence, it is necessary to examine the full set (ADB 2009).of adjustments to changes in crop yields, land suit-ability, market incentives and other factors in thecontext of a changing climate. One of the EACC markets. Vietnam is a large exporter of rice, butsector studies (Zhu & Guo 2010) looked at these agricultural markets and its comparative advan-issues for a small number of crops. tages may change in fundamental ways over a time horizon of four decades. Changes that affect theThe agricultural sector cannot be examined in agricultural sector may affect economic growthisolation from the rest of the economy and world and the distribution of incomes for the country as a whole. Equally, the impacts of climate change6 In the ten years from 1995 to 2005, “agriculture, forestry, and on the agricultural sector will be partly shaped by fisheries” saw its relative contribution to the economy fall from developments in the rest of the economy, so that 27.2 percent to 20.5 percent, while the industrial sector’s contri- bution increased from 28.8 percent to 41 percent over the same the assessment must account for the dynamics of period. However, the agriculture, forestry, and fisheries sector economic growth outside agriculture. For these continues to employ 57 percent of the total labor force (General Statistics Office 2009). reasons the analysis of the impacts of climate
12 E C O N O M I C S O F A D A P TAT I O N T O C L I M AT E C H A N G E Table 8 Exposure to Hydro-climatic Risks by Agroecological Zone Risk NW NE RRD NCC SCC CHL ES MRD Storms +++ +++ ++++ ++++ ++++ ++ +++ +++ River flooding - - ++++ ++++ +++ +++ +++ +++++ Flash floods +++ +++ - +++ +++ +++ +++ + Droughts +++ +++ + ++ +++ ++ +++ + Salinity intrusion - - + ++ ++ + ++ +++ Sea inundation - - +++ ++ ++ - ++ +++ Note: Very severe (++++), severe (+++), medium (++), light (+), none (-).change on agriculture is linked to a macroeco- likely to alter the balance of land use for crop pro-nomic model of economic development up to duction (including animal feedstuffs) and grazing,2050 to account for interactions between the agri- so the impacts identified here will impinge on live-cultural sector and the rest of the economy. stock production. This limitation reflects the level of analysis that is feasible at present. In future, itThe structure of the analysis is as follows: will be desirable to extend the scope of the analy- sis to take account of interactions between crop■■ Stage 1. Identify the direct impact of climate and livestock production. Similarly, forestry and change on crop yields, land use, and crop pro- aquaculture—both of which compete with crop duction for three different scenarios of climate production for land and other resources—are change (Wet, Dry, and Intermediate). examined separately because of the absence of a good basis for modeling resource allocation in the■■ Stage 2. Incorporate the results from Stage 1 wider rural economy. into the macroeconomic model to assess the direct and indirect impacts of climate change Vietnam is divided into eight agroecological without adaptation. zones: North-West (NW); North-East (NE); Red River Delta (RRD); North-Central Coast (NCC);■■ Stage 3. Examine options for mitigating the South-Central Coast (SCC); Central Highlands impact of climate change on crop production (CHL); South-East (SE); and Mekong River Delta and estimate the costs of the most economic (MRD). Climate, soil, and terrain conditions vary measures and crop production if they are considerably across these zones, while the nature implemented. and severity of hydro-climatic risks differ across zones (Table 8). Hence, the study treats each of■■ Stage 4. Incorporate the results from Stage 3 into the eight agroecological zones plus the three larg- the macroeconomic model to assess the net costs est river basins as separate units. of climate change after allowing for adaptation. Vietnam grows a wide variety of crops and it isOne point to note is that the analysis focuses on not possible to examine them all in detail. Thiscrop production—no attempt is made to analyze study focuses on five main crops—rice, maize,the impacts of climate change on livestock pro- cassava, sugarcane, and coffee—plus vegetables.7duction, since there is not good evidence to assesshow different climate scenarios may affect animal 7 “Vegetables” is a generic category dominated by production ofgrowth rates and dairy yields. Climate change is beans, other pulses, and onions.
V I E T N A M CO U N T RY ST U DY 13 Table 9 Harvested Areas and Crop Yields by Agroecological zones, 2007 (Areas in thousand ha, yields in ton/ha) Paddy rice Maize Cassava Sugar cane Coffee Vegetables AEZ Area Yield Area Yield Area Yield Area Yield Area Yield Area YieldNW 157.7 3.6 172.0 3.1 42.9 9.8 12.1 58.1 3.5 1.6 91.1* 11.1NE 552.5 4.6 236.0 3.2 55.4 13.0 13.4 48.5 0 0RRD 1111.6 5.7 84.7 4.2 7.5 12.0 2.3 52.3 0 0 158.6 18.0NCC 683.2 4.7 137.3 3.6 58.9 15.4 63.4 57.0 7.0 1.6 68.5 9.8SCC 375.8 5.1 42.1 4.0 65.3 15.6 49.8 48.7 1.6 1.1 44.0 14.0CHL 205.0 4.2 233.4 4.4 129.9 15.2 33.5 52.5 458.2 2.0 49.0 20.2SE 431.6 4.2 126.1 4.6 130.8 21.2 49.4 60.8 36.1 1.4 59.6 13.0MRD 3683.6 5.1 36.3 5.6 6.3 11.6 66.9 76.3 0 0 164.3 16.6Total 7201.0 5.0 1067.9 3.8 497.0 16.1 290.8 59.8 506.4 2.0 635.1 15.2Note: *Total of North-West and North-East agroecological zones.Source: General Statistics Office (GSO) (2009). Table 10 Percentage Shares of Crop Production by Agroecological Zone, 2007 Agroecological zone Paddy rice Maize Cassava Sugar cane Coffee Vegetables NW 18 16 13 22 0 12 NE 54 16 15 14 0 13 RRD 65 4 1 1 0 29 NCC 36 6 10 41 0 8 SCC 31 3 17 39 0 10 CHL 11 14 26 23 12 13 SE 20 6 31 33 1 9 MRD 70 1 0 19 0 10 Total production (mmt) 36.0 4.1 8.0 17.4 1.0 9.6 Source: GSO (2009).Table 9 shows crop harvested area and yield in most zones, irrigated rice is cultivated in two to2007 by agroecological zone, while Table 10 three crops per year. The continued rise in riceshows the share of production by agroecological production is largely due to improved irrigation,zone (AEZ) for the six crop categories. new rice varieties, new rice technologies, and increased triple cropping in the Mekong RiverRice is by far the most important crop. About Delta (Young et al. 2002).52 percent of paddy rice production is from theMekong River Delta: 82 percent of the summer- Maize is the second most important food crop. Itautumn rice is produced in the Mekong River is the substitute staple in periods of rice shortage,Delta, and another 18 percent in the Red River especially for people in rural areas and mountain-Delta. Other important rice-growing regions are ous regions. Maize is also the primary source ofthe North-East and the North-Central Coast. In feed for Vietnam’s poultry and livestock industry,