Economic Losses Due to Coastal Flooding Could Increase without Climate Mitigation

Coastal flooding has intensified due to rising sea levels, which is the direct effect of the warming climate of Earth.

Image Credit: © Absurdov |

The outcomes of a new study demonstrate that the predicted negative economy-wide effects of coastal flooding are already substantial until 2050. However, it is estimated that the effects will considerably increase toward the end of the century if no further climate mitigation and adaptation measures are taken.

Adopted in 2015 by 175 nations, the objective of the Paris Agreement is to restrict global warming to well below 2 °C than pre-industrial levels. But the period between 2010 and 2020 was the hottest decade of the planet on record, and the long-term trend seems upward.

An increase in the sea level is one of the most drastic effects of climate change, where increasing waters amplify coastal floods, threatening coastal communities, agriculture, and infrastructure.

For the first time, a new study led by IIASA evaluated the economy-wide impacts of sea-level rise worldwide, specifically in G20 countries, using three different macroeconomic models to collectively consider different climate mitigation and adaptation assumptions.

As part of the research, two different climate policy scenarios were compared by the researchers. One scenario was to achieve a warming of well below 2 °C by the end of this century (essentially in accordance with the Paris Agreement), and the other one overshooting this target—together with two distinct adaptation scenarios (no adaptation and full adaptation to rise in sea level) and predicted GDP effects because of coastal flooding in all scenario combinations for 2050 and 2100.

The research is also novel in terms of focusing specifically on G20 countries—countries that are huge emitters and impacted by climate change at the same time. Thus, the analysis confirms the need to act on both mitigation and adaptation.

We found that up to 2050 the global GDP losses in both climate futures are significant and similar given the effects of climate change that we are already experiencing. However, by 2100, without further mitigation and adaptation and assuming continued sea level rise, projected annual global economy-wide losses can amount to more than 4%.

Thomas Schinko, Study Lead Author and Director, Risk and Resilience Deputy Program, IIASA

Schinko continued, “With ambitious mitigation and adaptation, the model results show that this number can be reduced to below 0.5% of global GDP loss, despite the associated costs for adaptation measures and residual impacts.”

This confirms the importance and economic efficiency of adaptation in the long term: Making sure that coastal communities and their infrastructure are climate-resilient will affect economies across the globe much less than persistent climate impacts in the absence of climate action.

Thomas Schinko, Study Lead Author and Director, Risk and Resilience Deputy Program, IIASA

Laurent Drouet, study coauthor and senior scientist at the RFF-CMCC European Institute on Economics and the Environment, explains that in terms of regional impacts across the G20, the greatest levels of annual GDP effects in relative terms are predicted for China. Economic losses are predicted to be 0.8%–1.0% in 2050, with no further adaptation.

Predicted losses in GDP for India are somewhat less (0.5%–0.6%), followed by Canada (0.3%–0.4%). As emphasized by Zoi Vrontisi, a senior researcher at the E3MLab of the National Technical University of Athens, until 2050, the direct economic losses due to rise in sea level on a global scale can still be offset by interregional trade and substitution impacts in production processes at the macroeconomic level.

But after 2050 and up to 2100, the level of economy-wide impacts in G20 countries varies dramatically. China is still the country with the greatest predicted relative GDP loss if further adaptation measures are not undertaken. This factor is now 10 points higher than it was in 2050.

As per the economic modeling used, annual losses would sum up to 9%–10% in a scenario of climate change well below 2 °C, and to 11%–12% under the existing mitigation policy scenario. Europe and Japan are other regions with drastic economy-wide impacts by 2100 under the no-adaptation scenario.

Macroeconomic effects are similar to the direct impacts of the rise in sea level. But according to Andries Hof from PBL Netherlands Environmental Assessment Agency, this varies if more powerful mitigation actions are taken and sea level rise adaptation efforts are fortified.

Analogous to the global figures, each individual G20 country could thus restrict the residual economy-wide effects to below 1.0% of GDP by taking suitable adaptation measures. The main advantage of further mitigation efforts to be taken by G20 countries are considerable reductions in effects for the most susceptible coastal countries across the world. This effect will be further analyzed in future studies.

The findings of this paper demonstrate that we need to think long term while acting swiftly. Macroeconomic impacts up to and beyond 2050 as a result of coastal flooding due to sea level rise—not taking into account any other climate-related impacts, such as drought—are severe and increasing.

Thomas Schinko, Study Lead Author and Director, Risk and Resilience Deputy Program, IIASA

We, as a global society, need to further coordinate mitigation, adaptation, and climate resilient development, and consider where we build cities and situate important infrastructure,” concluded Schinko.


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