The macroeconomics of climate change and adaptation in Viet Nam
Report section: We propose an economy-wide assessment of the social and economic effects of climate impacts on the Vietnamese economy as a whole using an integrated macroeconomic framework. Our integrated assessment framework involves the following steps. First, we apply a monetary valuation of direct damages by sector (agriculture, energy and health) by using the key quantitative results from the Chapters 3, 4, 5, 6. Mainly, we focus on the impacts on rice yields, hydropower supply and electricity demand, infectious diseases and mortality, labor productivity and total factor productivity. Then, we construct the sectoral damage functions which represent the losses in each sector conditional on Viet Nam mean surface temperature (VNMST) change. Summing across sectoral direct impacts as a function of VNMST change 2020–2099 relative to the pre-industrial period 1851–1900, we found that expected annual GDP loss is 1.8% relative to the baseline scenario at +1°C of warming. This loss becomes 4.5% for a 1.5°C increase, 6.7% for a 2°C increase and up to 10.8% for a 3°C increase. The cross-sectoral and macroeconomic effects of these sectoral impacts by 2050 lead to average losses which are larger than direct damages by around 30%. In addition, we estimate the annual GDP losses due to typhoons in the period 1992–2013 at 2.4%. Uncertainties remain about the future impacts of typhoons combined with climate change scenarios. Finally, because export-oriented activity clearly supports the country’s growth, we specifically account for the potential international damage spillovers that may be incurred by changing trade patterns. Evidence is given that climate change through international spillover damages is expected to reduce Viet Nam’s long-run growth rate over the next 40 years.
Author(s)
Etienne Espagne, Thi Thu Ha Nguyen, Thi Anh-Dao Tran, Arsène Rieber, Dang Thi Thu Hoai, Élodie Mania, Michel Simioni, Grégoire Sempé, Boi Yen Ha
Publisher(s)
- AFD
Title of the work
- Climate change in Viet Nam. Impacts and adaptation. A COP26 assessment report of the GEMMES Viet Nam project
Date of publication
- 2021
URL of the HAL notice
Version
- 1