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Climate Change and Adaptation for Infrastructure

Gordon Hughes
University of Edinburgh

How does climate change affect the infrastructure sector?


Change in climate stresses
Adjustment in design standards Higher costs of construction & maintenance

Demand for infrastructure services


More paved rather than unpaved roads? More electricity generating capacity? Higher demand for water & sewage treatment

Risks of extreme weather events


Storms and flooding Droughts and extreme temperatures

What does infrastructure cover?


Power electricity generation, transmission & distribution Transport
Roads paved & unpaved Other transport rail, ports, airports

Water & wastewater resources, networks, treatment & flood prevention Social infrastructure
Health & education hospitals, schools, etc Urban esp. storm water drainage

What climate variables are used?


Tendency to focus on average temperatures, but precipitation is more important Varies with type of infrastructure
Max/min temperatures for paved roads & electricity generation Precipitation for unpaved roads, water demand, buildings, etc 95th or 99th percentiles of precipitation for flooding Sea surface temperature for cyclone damage

Significant variations across North Asia for different climate variables and scenarios

Change in precipitation - NCAR

Change in precipitation - CSIRO

Change in precipitation range - NCAR

Change in precipitation range - CSIRO

Analysing the risks of climate change


Type 1 using a given climate scenario
Assume that we know the right climate scenario Changes in year to year weather variability Shifts in the distribution of extreme weather events severity of 1 in 100 year storms/floods

Type 2 what climate scenario?


Different GCMs for specific locations the differences may be as large or larger than average changes are they equally likely? What are the costs of planning for scenario A only to discover that the outcome is scenario Z?

Stages in the analysis 1


Baseline projections by province/region
Use projections of population, income, etc to estimate infrastructure investment Based on panel econometric models pooling provincial and cross-country data

Apply dose-response cost models to baseline projections for a given climate scenario
How does climate affect the costs of building or maintaining infrastructure design standards? Adjust operating efficiency for physical processes Higher maintenance costs for existing assets?

Stages in the analysis 2


Changes in infrastructure demand by climate scenario
Climate variables used in demand projections Impacts can be large and not always as expected complex changes in location of activities Focus on electricity, water and paved vs unpaved roads

Adaptation as an investment decision - timing

Analysis of 17 climate scenarios (+ no change)

When does the PV of the costs of not adapting exceed the costs of adaptation?

Variations in costs & investment timing across scenarios Construct pay-off matrix investment strategy x outcome Decision based on degree of risk aversion
None min-mean loss vs High min-max loss

Demand model

Demand for water resources & treatment

North Asia analysis - general


Basic unit provinces for China, regions for Japan & Korea 17 climate scenarios mapped to 0.5 grid
Population-weighted climate outcomes Tails of distribution based on GEV models of historic data

Projections for population, GDP per capita, urbanisation to 2050 used to generate baseline infrastructure projections Unit infrastructure costs & dose-response to climate change adapted from EACC using additional data for China (esp. for roads)

Infrastructure demand by scenario


(Indices 2010 = 100)
Industrial water use

Municipal water use

Port capacity

Airport capacity

Railway length

Paved roads

Electricity consumption

Generating capacity 0 50 100 150 200 250 300 350 400 450

Indices, 2010=100

NoCC

Global Wet

Global Dry

PV of investment in adaptation
Pow er & telecoms Water & sew ers Other transport Health & schools

(Global Wet scenario with discount rate=5%)

Roads

Urban

Housing

0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 2011-15 2016-20 2021-25 2026-30 2031-35

Variations in PV of adaptation for urban infrastructure across climate scenarios


($ billion at discount rate = 5%)
0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 -9.0 -10.0 -11.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Climate scenario 2011-15 2016-20 2021-25 2026-30 2031-35

Variations in net PV of investment in adaptation across regions of China


($ billion at discount rate = 5%)
N NE E SE SW W All

0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 2011-15 2016-20 2021-25 2026-30 2031-35

Timing of adaptation by region, asset type & discount rate min-mean loss
Investment period Discount rate A. Region North North East East South East South West West B. Asset type Power & telecoms Water & sewers Roads Other transport Health & schools Urban Housing Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt Adapt NoCC NoCC NoCC NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt Adapt NoCC NoCC NoCC NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC 0% 2011-15 2% 5% 0% 2021-25 2% 5% 0% 2031-35 2% 5%

Timing of adaptation by region, asset type & discount rate min-max loss
Investment period Discount rate A. Region North North East East South East South West West B. Asset type Power & telecoms Water & sewers Roads Other transport Health & schools Urban Housing Adapt Adapt NoCC NoCC Adapt NoCC Adapt NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt Adapt NoCC NoCC Adapt NoCC Adapt NoCC Adapt NoCC NoCC Adapt NoCC Adapt NoCC Adapt NoCC NoCC NoCC NoCC NoCC Adapt Adapt Adapt Adapt Adapt NoCC Adapt NoCC Adapt NoCC Adapt Adapt NoCC Adapt NoCC Adapt NoCC NoCC NoCC NoCC Adapt Adapt NoCC Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt Adapt Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC Adapt Adapt Adapt Adapt Adapt Adapt Adapt Adapt Adapt NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC NoCC 0% 2011-15 2% 5% 0% 2021-25 2% 5% 0% 2031-35 2% 5%

Engineering vs economic adaptation


The EACC study focused on engineering adaptation (changes in design standards)
Reasonable for baseline projections But not if climate change may affect demand

Economic adaptation use of economic instruments to influence demand


Example: use of water abstraction charges to ensure that total demand for water does not increase Other examples: energy prices, road user charges, land use zoning to minimise storm water flooding

Economic adaptation for water resources

Economic adaptation - pricing water resources in OECD countries

Changes in probabilities of extreme weather events 1


Focus: coastal storms & run-off (short term) flooding
Coastal storms: based on historic cyclone risk adjusted by projected changes in sea temperatures Flooding: based changes in peak daily precipitation for grid squares with history of severe flood damage

Damage modelled as a power function of wind speed or flood depth above existing level of protection Cyclones: Current 1 in 50 year storm is 195 kph equivalent design standard would be 215 kph over life of structures built in 2040-50

Changes in probabilities of extreme weather events 2


Cyclones: At present China has too little insurance against existing risks
Moving to 1 in 50 year standard from 1 in 10 year would be warranted already. Additional cost due to increase in 1 in 50 year storm is ~1% of building costs

Floods: Large differences between climate scenarios some provinces (Zhejiang, Anhui, Fujian) face big increase in risks for at least one scenario. But, risks may decrease for many people Overall, uncertainty about run-off flooding is the most important & expensive aspect of climate change in China - concentrated in provinces in the E & SE regions

Change in potential cyclone damage in coastal provinces up to 2030


Province < -5% Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 % of population by category of increase in potential cyclone damage -5 - 5% 25.3 84.4 24.1 97.2 8.9 90.9 100.0 100.0 100.0 100.0 94.9 99.6 100.0 5 - 10% 61.5 12.3 58.2 2.5 75.5 8.5 0.0 0.0 0.0 0.0 5.1 0.3 0.0 10 - 15% 13.0 3.3 14.1 0.3 11.3 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15 - 20% 0.1 0.1 3.5 0.0 3.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 > 20% 0.0 0.0 0.1 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Change in potential flood damage in vulnerable provinces up to 2030


Ref Province % of population by category of increase in potential flood damage < -5% 11 12 13 14 17 18 19 20 Zhejiang Anhui Fujian Jiangxi Hubei Hunan Guangdong Guangxi 60.8 40.2 61.5 52.3 39.5 38.7 38.0 49.9 -5 - 5% 12.4 16.9 15.2 13.4 14.2 16.8 15.2 16.6 5 - 10% 3.7 7.9 4.0 6.3 5.6 8.0 6.6 5.0 10 - 15% 3.7 5.2 3.0 4.5 6.5 7.1 8.2 5.2 15 - 20% 2.6 4.1 2.2 5.1 4.3 5.9 5.4 4.3 > 20% 16.8 25.6 14.1 18.5 29.8 23.4 26.6 19.0

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