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The Economic Costs of Climate Change: a Multi-Sector Impact Assessment for Vietnam

Author

Listed:
  • Channing Arndt
  • Finn Tarp
  • James Thurlow

Abstract

Unlike existing studies, we adopt a multi-sectoral approach and consider the full range of climate projections. Biophysical damages are translated into economic costs using a dynamic economywide model. Our results for Vietnam indicate that the negative impacts on agriculture and roads are modest, at least until 2050. Larger costs are caused by rising sea levels and cyclone strikes. Overall, climate change is likely to reduce Vietnam's national income by between one and two percent by 2050 (relative to a historical baseline). Damages double under more extreme projections.

Suggested Citation

  • Channing Arndt & Finn Tarp & James Thurlow, 2012. "The Economic Costs of Climate Change: a Multi-Sector Impact Assessment for Vietnam," WIDER Working Paper Series wp-2012-082, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2012-082
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    References listed on IDEAS

    as
    1. Channing Arndt & James Thurlow, 2015. "Climate uncertainty and economic development: evaluating the case of Mozambique to 2050," Climatic Change, Springer, vol. 130(1), pages 63-75, May.
    2. Paul Chinowsky & Channing Arndt, 2012. "Climate Change and Roads: A Dynamic Stressor–Response Model," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 448-462, August.
    3. repec:unu:wpaper:wp2012-81 is not listed on IDEAS
    4. Ravela, Sai & Verly, Caroleen & Ludwig, Lindsay C. & Neumann, James E. & Emanuel, Kerry A., 2012. "Risks of Coastal Storm Surge and the Effect of Sea Level Rise in the Red River Delta, Vietnam," WIDER Working Paper Series 081, World Institute for Development Economic Research (UNU-WIDER).
    5. Neil Adger, W., 1999. "Social Vulnerability to Climate Change and Extremes in Coastal Vietnam," World Development, Elsevier, vol. 27(2), pages 249-269, February.
    6. James Thurlow & Paul Dorosh & Winston Yu, 2012. "A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 412-428, August.
    7. James E. Neumann & Sai Ravela & Lindsay C. Ludwig & Caroleen Verly & Kerry A. Emanuel, 2012. "Risks of Coastal Storm Surge and the Effect of Sea Level Rise in the Red River Delta, Vietnam," WIDER Working Paper Series wp-2012-081, World Institute for Development Economic Research (UNU-WIDER).
    8. Strzepek, Kenneth & Strzepek, Niko & Schweikert, Amy E. & Chinowsky, Paul S., 2012. "Road Infrastructure and Climate Change in Vietnam," WIDER Working Paper Series 080, World Institute for Development Economic Research (UNU-WIDER).
    9. Paul S. Chinowsky & Amy E. Schweikert & Niko Strzepek & Kenneth Strzepek, 2012. "Road Infrastructure and Climate Change in Vietnam," WIDER Working Paper Series wp-2012-080, World Institute for Development Economic Research (UNU-WIDER).
    10. repec:unu:wpaper:wp2012-80 is not listed on IDEAS
    11. Mendelsohn, Robert & Dinar, Ariel & Williams, Larry, 2006. "The distributional impact of climate change on rich and poor countries," Environment and Development Economics, Cambridge University Press, vol. 11(2), pages 159-178, April.
    12. Arndt, Channing & Strzepeck, Kenneth & Tarp, Finn & Thurlow, James & Fant, Charles & Wright, Len, 2010. "Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    13. Fant, Charles & Gebretsadik, Yohannes & Strzepek, Kenneth, 2012. "Impact of Climate Change on Irrigation, Crops and Hydropower in Vietnam," WIDER Working Paper Series 079, World Institute for Development Economic Research (UNU-WIDER).
    14. World Bank, 2010. "Economics of Adaptation to Climate Change : Vietnam," World Bank Publications - Reports 12747, The World Bank Group.
    15. repec:unu:wpaper:wp2012-79 is not listed on IDEAS
    16. Yu, Bingxin & Zhu, Tingju & Breisinger, Clemens & Hai, Nguyen Manh, 2010. "Impacts of climate change on agriculture and policy options for adaptation: The case of Vietnam," IFPRI discussion papers 1015, International Food Policy Research Institute (IFPRI).
    17. Yohannes Gebretsadik & Charles Fant & Kenneth Strzepek, 2012. "Impact of Climate Change on Irrigation, Crops and Hydropower in Vietnam," WIDER Working Paper Series wp-2012-079, World Institute for Development Economic Research (UNU-WIDER).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Amr Hosny, 2021. "Adapting to Climate Change in Vietnam: Insights from a Structural Model," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 9(2), pages 145-152, June.
    2. Ravela, Sai & Verly, Caroleen & Ludwig, Lindsay C. & Neumann, James E. & Emanuel, Kerry A., 2012. "Risks of Coastal Storm Surge and the Effect of Sea Level Rise in the Red River Delta, Vietnam," WIDER Working Paper Series 081, World Institute for Development Economic Research (UNU-WIDER).
    3. Anh Thu Quang Pham & Pundarik Mukhopadhaya & Ha Vu, 2021. "Estimating poverty and vulnerability to monetary and non-monetary poverty: the case of Vietnam," Empirical Economics, Springer, vol. 61(6), pages 3125-3177, December.
    4. Finn Tarp, 2018. "Vietnam: The dragon that rose from the ashes," WIDER Working Paper Series 126, World Institute for Development Economic Research (UNU-WIDER).
    5. Valeria Costantini & Anil Markandya & Elena Paglialunga & Giorgia Sforna, 2018. "Impact and distribution of climatic damages: a methodological proposal with a dynamic CGE model applied to global climate negotiations," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(3), pages 809-843, December.
    6. Siddig, Khalid & Stepanyan, Davit & Wiebelt, Manfred & Grethe, Harald & Zhu, Tingju, 2020. "Climate change and agriculture in the Sudan: Impact pathways beyond changes in mean rainfall and temperature," Ecological Economics, Elsevier, vol. 169(C).
    7. Roberto Ricciuti & Adelaide Baronchelli, 2018. "Climate change, rice production, and migration in Vietnamese households," WIDER Working Paper Series 86, World Institute for Development Economic Research (UNU-WIDER).
    8. Pham Thi Oanh & Makoto Tamura & Naoko Kumano & Quang Van Nguyen, 2020. "Cost-Benefit Analysis of Mixing Gray and Green Infrastructures to Adapt to Sea Level Rise in the Vietnamese Mekong River Delta," Sustainability, MDPI, vol. 12(24), pages 1-19, December.
    9. James E. Neumann & Kerry A. Emanuel & Sai Ravela & Lindsay C. Ludwig & Caroleen Verly, 2015. "Risks of Coastal Storm Surge and the Effect of Sea Level Rise in the Red River Delta, Vietnam," Sustainability, MDPI, vol. 7(6), pages 1-20, May.
    10. Fant, Charles & Gebretsadik, Yohannes & Strzepek, Kenneth, 2012. "Impact of Climate Change on Irrigation, Crops and Hydropower in Vietnam," WIDER Working Paper Series 079, World Institute for Development Economic Research (UNU-WIDER).
    11. Antimiani, Alessandro & Costantini, Valeria & Markandya, Anil & Paglialunga, Elena & Sforna, Giorgia, 2016. "Assessing costs and benefits of current climate negotiations," Conference papers 332752, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Channing Arndt & Charles Fant & Sherman Robinson & Kenneth Strzepek, 2015. "Informed selection of future climates," Climatic Change, Springer, vol. 130(1), pages 21-33, May.
    13. Ferrer, Alice Joan G. & Thanh, Le Ha & Kiet, Nguyen Tuan & Chuong, Pham Hong & Trang, Vu Thu & Hopanda, Jinky C. & Carmelita, Benedict Mark & Gummadi, Sridhar & Bernardo, Eisen Bernard, 2022. "The impact of an adjusted cropping calendar on the welfare of rice farming households in the Mekong River Delta, Vietnam," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 639-652.
    14. Finn Tarp, 2018. "Vietnam: The dragon that rose from the ashes," WIDER Working Paper Series wp-2018-126, World Institute for Development Economic Research (UNU-WIDER).
    15. Ji Guo & Hui Liu & Xianhua Wu & Jiong Gu & Shunfeng Song & Yinshan Tang, 2015. "Natural Disasters, Economic Growth and Sustainable Development in China―An Empirical Study Using Provincial Panel Data," Sustainability, MDPI, vol. 7(12), pages 1-18, December.
    16. Channing Arndt & Charles Fant & Sherman Robinson & Kenneth Strzepek, 2015. "Informed selection of future climates," Climatic Change, Springer, vol. 130(1), pages 21-33, May.
    17. Strzepek, Kenneth & Strzepek, Niko & Schweikert, Amy E. & Chinowsky, Paul S., 2012. "Road Infrastructure and Climate Change in Vietnam," WIDER Working Paper Series 080, World Institute for Development Economic Research (UNU-WIDER).
    18. Adelaide Baronchelli & Roberto Ricciuti, 2018. "Climate change, rice production, and migration in Vietnamese households," WIDER Working Paper Series wp-2018-86, World Institute for Development Economic Research (UNU-WIDER).
    19. Trinh, Tra Thi & Munro, Alistair, 2023. "Integrating a choice experiment into an agent-based model to simulate climate-change induced migration: The case of the Mekong River Delta, Vietnam," Journal of choice modelling, Elsevier, vol. 48(C).
    20. Raffaello Cervigni & Pasquale Lucio Scandizzo, 2017. "The Ocean Economy in Mauritius," World Bank Publications - Reports 28562, The World Bank Group.
    21. Paul S. Chinowsky & Amy E. Schweikert & Niko Strzepek & Kenneth Strzepek, 2015. "Road Infrastructure and Climate Change in Vietnam," Sustainability, MDPI, vol. 7(5), pages 1-19, May.
    22. Tam Bang Vu & Eric Iksoon Im & Karla Hayashi & Ryan Torio, 2017. "Cyclones, Deforestation, and Production of Food Crops in Vietnam," Economics of Disasters and Climate Change, Springer, vol. 1(3), pages 245-262, October.
    23. Wisdom Akpalu & Channing Arndt & Innocent Matshe, 2015. "Introduction to the Special Issue on the Economics of Climate Change Impacts on Developing Countries: Selected Studies on Sub-Saharan Africa and South-East Asia," Sustainability, MDPI, vol. 7(9), pages 1-5, September.

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    More about this item

    Keywords

    Climate change; Econometric models; Global warming; Environment;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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