IPCC Fourth Assessment Report: Climate Change 2007
Climate Change 2007: Working Group II: Impacts, Adaptation and Vulnerability

6.5.3 Socio-economic consequences of climate change

Substantial progress has been made in evaluating the socio-economic consequences of climate change, including changes in variability and extremes. In general, the results show that socio-economic costs will likely escalate as a result of climate change, as already shown for the broader impacts (Section 6.4). Most immediately, this will reflect increases in variability and extreme events and only in the longer term will costs (in the widest sense) be dominated by trends in average conditions, such as mean sea-level rise (van Aalst, 2006). The impacts of such changes in climate and sea level are overwhelmingly adverse. But benefits have also been identified, including reduced cold-water mortalities of many valuable fish and shellfish species (see Chapter 15, Section, opportunities for increased use of fishing vessels and coastal shipping facilities (see Chapter 15, Section, expansion of areas suitable for aquaculture (see Chapter 5, Section, reduced hull strengthening and icebreaking costs, and the opening of new ocean routes due to reduced sea ice. Countries with large land areas generally benefit from competitive advantage effects (Bosello et al., 2004).

In the absence of an improvement to protection, coastal flooding could grow tenfold or more by the 2080s, to affect more than 100 million people/yr, due to sea-level rise alone (Figure 6.8). Figure 6.10 shows the consequences and total costs of a rise in sea level for developing and developed countries, and globally. This analysis assumes protection is implemented based on benefit-cost analysis, so the impacts are more consistent with enhanced protection in Figure 6.8, and investment is required for the protection. The consequences of sea-level rise will be far greater for developing countries, and protection costs will be higher, relative to those for developed countries.

Figure 6.10

Figure 6.10. Causes, selected consequences (dryland and wetland loss, people displaced) and the total costs of an assumed sea-level rise, for developing and developed countries, and as a global total. (based on Tol, 2007).

Such global assessments are complemented by numerous regional, national and more detailed studies. The number of people in Europe subject to coastal erosion or flood risk in 2020 may exceed 158,000, while half of Europe’s coastal wetlands are expected to disappear as a result of sea-level rise (Eurosion, 2004). In Thailand, loss of land due to a sea-level rise of 50 cm and 100 cm could decrease national GDP by 0.36% and 0.69% (US$300 to 600 million) per year, respectively; due to location and other factors, the manufacturing sector in Bangkok could suffer the greatest damage, amounting to about 61% and 38% of the total damage, respectively (Ohno, 2001). The annual cost of protecting Singapore’s coast is estimated to be between US$0.3 and 5.7 million by 2050 and between US$0.9 and 16.8 million by 2100 (Ng and Mendelsohn, 2005). In the cities of Alexandria, Rosetta and Port Said on the Nile delta coast of Egypt, a sea-level rise of 50 cm could result in over 2 million people abandoning their homes, the loss of 214,000 jobs and the loss of land valued at over US$35 billion (El-Raey, 1997).