Research in Environment and Climate Change

 

Climate change is one of the most serious challenges facing Vietnam in achieving its goals of sustainable development and poverty reduction. Vietnam is among the top 15 countries most vulnerable to natural disasters such as droughts and floods, as well as in the number of affected people and the extent to which they are exposed. Nghe An is a province in the North Central region of Vietnam with geographical position in the tropical monsoon climate, rainy season with heavy rainfall and sloping topography. Nghe An suffers many natural disasters every year that cause heavy damages. In particular, in the context of global climate change, the burdens caused by natural disasters are on the increase.

 

Therefore, the identification of the impacts of climate change on the natural, economic and social conditions of Nghe An province in order to set out policies to cope and mitigate the impacts of climate change is very necessary to stabilize economic activity and social security. These are the important reasons to carry out the research project at the provincial level: “Research and propose solutions to respond to the impacts of climate change on natural and socio-economic conditions. Assembly in Nghe An province”.

This topic is headed by Dr., Prof. Nguyen Manh Hung, in collaboration with Dr., Prof. Arnaud Reynaud (Toulouse School of Economics), Assoc. Tran Ngoc Anh, MSc. Nguyen Duy Thanh, MSc. Tran Nam Quoc under the management of Nghe An Department of Science and Technology. The duration of the project is from 12/2011 to 08/2013.

PROJECT: Project: VIET FLOOD
A joint research project on Public Flood Management Policy, VCREME and TSE ( November 2012 – October 2013)

DESCRIPTION

Vietnam is one of the world’s most disaster-prone countries. Floods have caused extensive damage to infrastructure, significant losses in the agriculture and fisheries sectors, as well as a large number of fatalities. According to Vietnam’s Emergency Events Database (EMDAT) floods alone affected 35 million people between 1960 and 2006. As a result, Vietnam has been identified as one of the top 15 countries in the world already vulnerable to natural hazards like drought and storms in terms of number of people and scale of exposure . Being located in the South China Sea, the country is part of a tropical monsoon sea belt and receives torrential rain ranging from 1200 to 3000 mm a year. Furthermore, nearly 90% of those precipitations occur during the summer. In addition to the monsoon rains are 6 to 8 storms hitting the coast every. The combination of the typhoon and the monsoon seasons leads to the food season which starts in July and ends in November. Moreover, climate change is expected to bring increased disasters to Vietnam in the form of typhoons, cyclones, floods and droughts. Approximately 10 percent of Vietnam’s population and GDP is expected to be impacted if sea-level were to rise by one meter. Despite the huge impact of floods on the Vietnamese population, almost nothing is known about Vietnamese household’s Willigness To Pay (WTP) for flood risk reduction also this is a key information for an efficient design of any public flood management policy. Our research proposal aims at filling this gap. The projet builds on three strands on the litterature in environmental economics. The first one refers to the economic evaluation of non-market goods. The second to the more recent literature on the Value of Statistical Life (VSL). Finally, we wish also to contribute to the literature on flood insurance demand in a developing country.


Principal Investigators 
:

Dr. Manh-Hung Nguyen (coordinator), VCREME, TSE

Dr. Arnaud Reynaud , LERNA-INRA-Toulouse School of Economics and VCREME

Dr. Cécile Aubert, LERNA- Toulouse School of Economics

 PUBLICATIONS

  1. Cécile Aubert, Manh-Hung Nguyen and Arnaud Reynaud,  Living with floods: Flood Protective behaviours and Flood Risk Perception of Vietnam Households,  VIETFLOOD working paper n° 1, The Geneva Papers on Risk and Insurance – Issues and Practice, Palgrave Macmillan, vol. 38(3), pages 547-579, July.

Abstract:  We empirically investigate the determinants of household flood protective strategies and household flood risk perception using data from a household-level survey conducted in Spring 2012 in Vietnam. Our empirical analysis reveals that flood protective behaviors of Vietnamese households are largely driven by past flood experience, by perceived probability of floods and by perceived consequences of flood. This result is consistent with the protection motivation theory. Since risk awareness rising is an important element of flood management policies in a country like Vietnam, we also provide an empirical analysis of household flood risk perception. Our results suggest that both perceived probability and perceived consequences of flood are impacted by past experience with flood. Lastly, we document the important role played by public flood management policies in shaping individual flood risk perception and flood protective behaviors.

Download paper

  1. Arnaud Reynaud, Manh-Hung Nguyen, Monetary Valuation of Flood Insurance in Vietnam, VIETFLOOD working paper n° 2, November, 2013.

Abtract:  Vietnam is one of the countries which is the most affected by floods. A discrete choice experiment has therefore been employed to estimate how Vietnamese households value flood insurance. We compute their willingness to pay (WTP) for various flood insurance programs and we identify the relationships between WTP and the different attributes of insurance schemes (type of risk covered, level of cover, insurance provider, billing frequency, and insurance premium). We first show that Vietnamese households exhibit strong preference for the status quo option (no insurance). We do, however, document significant and positive WTP for some flood insurance policies, especially those covering the health consequences of flooding. Finally, we stress the high level of heterogeneity in household preferences for flood insurance policies. These results call for very careful design of flood insurance mechanisms in developing countries subject to high risk of natural disaster.

Download paper

  1. Arnaud Reynaud, Manh-Hung Nguyen, Nguyen Duy Thanh, Valuing Flood Risk Reduction: Results From a Choice Experiment in Vietnam , VCREME working paper 3,  2013

Abstract:  A choice experiment is employed to estimate how Vietnamese households value flood risk reduction. We present the result of the pilot study conducted on a sample of households located in the Nghe An Province, one of the provinces which is the most affected by flood in Vietnam. The results reveal that there is considerable preference heterogeneity across households. We compute the willingness to pay (WTP) for flood risk reduction and we identify the relationships between WTP and different attributes of flood management policies (reduction of economic losses, reduction of human losses, political level in charge of implementing the flood management policy). The marginal WTP for reducing fatality rate, which can be interpreted as the value of statistical life (VSL), is estimated to 5,701 million VND (approximately 212,000 euros). It corresponds to 95 times the annual household average income in our sample. Our VSL is in line with previous estimates in similar countries.

Download paper

  1. Arnaud Reynaud, Do Natural Disasters Modify Individual Preferences: Evidences From a Field Experiment in Vietnam, working in progress, 2012.

Abstract:  We study whether flood occurrence affects risk-taking behavior and time preferences of Vietnam households. We investigate this issue experimental data collected in 2011. We play standard lottery games (using real money) with randomly selected individuals and test whether households living in villages that have been exposed to floods exhibit more risk aversion. We find that individuals in villages that suffered a flood in the past years exhibit more risk aversion than individuals in living in otherwise like villages that did not experience of this kind of disaster. Flood occurence also result in more impatient behavior of households. This change in risk preferences has important implications for economic development.

PRESENTATION AT SEMINAR AND CONFERENCE

  1. 19th Annual Conference of the European Association of Environmental and Resource Economists, EAERE 2012 ( Prague, Czech Republic), 27-30 June 2012
  2. CBA workshop, Toulouse School of Economics, 01 Ferbruary 2012
  3. SMART, Rennes,  05 June 2012
  4. GREThA, Bordeaux , 20 June 2012
  5. Hue Economic University, Vietnam, 19 June 2012
  6. VEAM, WRU- June, 2012.