Cost-Benefit Analysis of Adaptation to Beach Loss Due to Climate Change in Japan

Abstract

To measure economic effects of changes in environmental quality caused by climate change in Japan, we estimate beach loss damage costs in Japan and in each prefecture and evaluate the economic effectiveness of hypothetical adaptation measures to restore sandy beaches. For analyses, we use a computable general equilibrium model (CGE) that integrates a utility function with environmental quality factors as an independent variable derived from a recreation demand function in a travel cost method (TCM). We use future projections of beach loss rates in 2081–2100 based on ensemble-mean regional sea-level rise (SLR) for four Representative Concentration Pathway (RCPs) scenarios (RCP2.6, RCP4.5, RCP6.0, and RCP8.5). The main findings of our study are presented as follows. (1) In 2081–2100, beach loss damage costs were estimated respectively as 398.54 million USD per year for RCP2.6, 468.96 (m.USD/year) for RCP4.5, 494.09 (m.USD/year) for RCP6.0, and 654.63 (m.USD/year) for RCP8.5. (2) For all RCPs, six prefectures for which the cost–benefit ratio exceeds 1.0 were Kanagawa, Osaka, Hyogo, Hiroshima, Saga, and Kumamoto. Our hypothetical adaptation measure of an artificial beach enhancement is expected to be quite effective as a public works project in these prefectures.

Climate change adaptation based on computable general equilibrium models – a systematic review

“…Many of these studies conclude that the introduced planned adaptation measures can mitigate the negative impact of climate change at low cost (Hoffmann, 2019; Robinson et al , 2012; Zeshan and Ko, 2019; Zeshan and Shakeel, 2020) or receive net benefits (Calzadilla et al , 2014; Nakajima et al , 2020; Schenker and Stephan, 2014). Some studies point out that the examined adaptation measures may not be sufficient to solve the problem although helpful (Akune et al , 2015; Arndt et al , 2015; Boyd and Ibarrarán, 2009; Elshennawy et al , 2016; Ouraich et al , 2019; Zidouemba, 2017).…”

“…The examined investments and funding for adaptation include agricultural sector investments (Arndt et al, 2015(Arndt et al, , 2011Bosello et al, 2018;Calzadilla et al, 2013Calzadilla et al, , 2014Elshennawy et al, 2016;Robinson et al, 2012;Zidouemba, 2017), funding of adaptation in developing regions (Ouraich and Tyner, 2018;Schenker and Stephan, 2014), coastal protection investments (Elshennawy et al, 2016;Parrado et al, 2020;Withey et al, 2016), decrease in investments in risky areas (Husby et al, 2016), utilization of insurance and catastrophic bonds (Thirawat et al, 2017), public investments in adaptation (Bachner et al, 2019;Hirte et al, 2018;Hoffmann, 2019;Hoffmann and Stephan, 2018) and adaptation measure of an artificial beach enhancement (Nakajima et al, 2020).…”