c. vulnerability and hazard assessment 4.0: preliminary

Assessing vulnerability and adaptation to sea-level rise: Lifuka Island

Ha’apai, Tonga

C. Vulnerability and hazard assessment4.0: Preliminary economic analysis of adaptation strategies to

coastal erosion and inundation

Volume 2 - Cost benefit analysis

CONTACT DETAILSSecretariat of the Pacific Community

Email: [email protected]: www.spc.int

SPC Headquarters BP D5,

98848 Noumea Cedex,New Caledonia

Telephone: +687 26 20 00Fax: +687 26 38 18

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SPC Solomon Islands Country Office

PO Box 1468Honiara, Solomon IslandsTelephone: + 677 25543

+677 25574Fax: +677 25547

Paula Holland



Volume 2 — Cost benefit analysis

Secretariat of the Pacific CommunitySuva, Fiji

Assessing vulnerability and adaptation to sea-level rise: Lifuka Island,

Ha’apai, Tonga

ii

© Copyright Secretariat of the Pacific Community 2014

All rights for commercial / for profit reproduction or translation, in any form, reserved. SPC authorises the partial reproduction or translation of this material for scientific, educational or research purposes, provided that SPC and the source document are properly acknowledged. Permission to reproduce the document and/

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Original text: English

Secretariat of the Pacific Community Cataloguing-in-publication data

C. Vulnerability and hazard assessment 4.0: Preliminary economic analysis of adaptation strategies to coastal erosion and inundation - Volume 2 - Cost benefit analysis / Paula Holland

(Assessing vulnerability and adaptation to sea-level rise: Lifuka Island, Ha’apai, Tonga / Secretariat of the Pacific Community)

1. Sea level — Climatic factors — Tonga.2. Climatic changes — Social aspects — Tonga.3. Lifuka Island (Tonga) — Social conditions.

I. Holland, Paula II. Title III. Secretariat of the Pacific Community IV. Series

363.738 740 996 12 AACR2

ISBN: 978-982-00-0705-5

DISCLAIMER

While care has been taken in the collection, analysis, and compilation of the data, they are supplied on the condition that the Secretariat of Pacific Community shall not be

liable for any loss or injury whatsoever arising from the use of the data.

IMPoRtAnt notICE

This work and report were made possible with the financial support provided bythe Government of Australia’s Department of Industry, Innovation, Climate Change, Science,

Research and Tertiary Education.

Secretariat of the Pacific CommunityApplied Geoscience and technology Division (SoPAC)

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Telephone: (679) 338 1377Fax: (679) 337 0040

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Design and layout: SPC Publications Section, Noumea, New Caledonia

www.spc.int

http://www.sopac.org

Assessing vulnerability and adaptation to sea-level rise: Lifuka Island,Ha’apai, Tonga

C. Vulnerability and hazard assessment 3.0 Preliminary economic analysis of adaptation strategies to coastal erosion and inundation


iii

Contents

List of technical reports for the Lifuka project......................................................................................................iv

Acknowledgements ............................................................................................................................................ v

1. Executive summary ................................................................................................................................... 1

2. Background ............................................................................................................................................... 7

2.1 Cost of options .............................................................................................................................. 8

2.2 Purpose ......................................................................................................................................... 8

3. Methodology ............................................................................................................................................ 9

3.1 Identifying impacts ....................................................................................................................... 9

3.2 Valuing impacts ........................................................................................................................... 16

3.3 Sensitivity analysis ......................................................................................................................17

4. Results .......................................................................................................................................................17

4.1 Damage without adaptation .......................................................................................................17

4.2 Benefits from adaptation options ............................................................................................. 23

4.2.1 Revetments ....................................................................................................................... 23

4.2.2 Elevation ........................................................................................................................... 26

4.2.3 Retreat .............................................................................................................................. 27

5. Sensitivity analysis ................................................................................................................................ 31

6. Implications ............................................................................................................................................ 36

7. References ............................................................................................................................................... 40

8. Annex 1 .................................................................................................................................................... 41

iv

List of technical reports for the Lifuka project: Assessing vulnerability and adaptation to sea-level rise: Lifuka Island, Ha’apai, Tonga

As part of the Australian Government’s International Climate Change Adaptation Initiative (ICCAI), the Pacific Adaptation Strategy Assistance Program (PASAP) aims to assist the development of evidence-based adaptation strategies to inform robust long-term national planning and decision-making in partner countries. The primary objective of PASAP is: ‘to enhance the capacity of partner countries to assess key vulnerabilities and risks, formulate adaptation strategies and plans and mainstream adaptation into decision making’ (PASAP, 2011). A major output of PASAP is: ‘country-led vulnerability assessment and adaptive strategies informed by best practice methods and improved knowledge’.

The Lifuka project was developed in conjunction with the Government of Tonga Ministry for Lands, Survey, Natural Resources, Environment and Climate Change (MLSNRECC), PASAP and the Secretariat of the Pacific Community (SPC) to develop an evidenced-based strategy for adapting to sea-level rise in Lifuka Island.

Many technical reports were written for the project on Lifuka Island. They are listed below. They complement, and should be read in conjunction with, the final report : Rising oceans, changing lives.

A: Final report: Rising oceans, changing lives

B 1: Physical resources

1.1: Shoreline assessment

1.2: Groundwater resources assessment

1.3: Oceanographic assessment

1.4: Benthic habitat assessment

1.5: Beach sediment assessment

1.6: Household survey to assess vulnerabilities to water resources and coastal erosion and inundation

B 2: Community assessment

2.1: Community engagement strategy and community assessment manual

2.2: Community values and social impact analysis

C. Vulnerability and hazard assessment

1.0: Coastal hazards

2.0: Coastal rehabilitation – Lifuka Island, engineering options report

3.0: Preliminary economic analysis of adaptation strategies to coastal erosion and inundation

Volume 1 – Least cost analysis

4.0: Preliminary economic analysis of adaptation strategies to coastal erosion and inundation

Volume 2 – Cost benefit analysis

D. Adaptation options and community strategies




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Acknowledgements

This report builds on a provisional cost analysis prepared by SPC staff, in particular Anja Grujovic, who collected and assisted in the analysis of primary data. The analysis also reflects considerable efforts by other analysts to understand the dynamics of the Lifuka environment and infrastructure including:

o Jens Krüger, Team leader, Oceanography team, SOPAC/SPC, for providing scientific input into the analysis and a tutorial in using QuantumGIS;

o Hervé Damlamian, 3D Modeller SOPAC/SPC, for providing guidance on wave inundation and impacts; and

o WorleyParsons Engineering for guidance on the robustness of options for Lifuka and general views on their effectiveness.

The following individuals and departments are gratefully acknowledged for their assistance in implementing this analysis:

o Fuka Kitekei’aho, National Project Coordinator, Tonga Ministry for Lands, Survey, Natural Resources, Environment and Climate Change (MLSNRECC);

o Technical Working Group for the Lifuka project based in Tonga; o MLSNRECC for providing records of previous land transactions in Lifuka; o Staff of the MLSNRECC and the Ministry of Infrastructure; o Brian Dawson, Jens Krüger and Anna Rios Wilks of SPC for review and technical input.




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1. Executive summary

Among other things, the project Island Vulnerability and Adaptation to Sea-Level Rise, implemented by Australia’s Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE), is intended to develop an evidence-based strategy to adapt to climate change in Tonga. As part of this project, and at the request of the Government of Tonga, the work seeks to inform adaptation to extreme climatic events. At the government’s direction, the project is using the possible storm surge associated with a tropical cyclone of a one in a hundred years return frequency (1:100 year event) as a case study. This will enable the government and the community to plan for future generations as climate change progresses.

The site for the DIICCSRTE work in Tonga is Lifuka Island in the Ha’apai Group. As well as being an atoll that faces climate change, in 2006 this atoll experienced an earthquake that generated 23 cm of subsidence on its western side (PASAP 2011). In past years, the island has also experienced significant coastal erosion. Since sea levels are likely to continue to rise due to climate change during the 21st century and, since the resulting wave impact is likely to lead to further erosion and inundation, there is a need for adaptation in preparation for the future.

This document forms Volume 2 of a preliminary economic assessment of adaptation options to coastal hazards in the face of climate change and rising sea levels, taking Lifuka Island as a case study. Volume I of this assessment described the potential costs associated with three forms of adaptation/coastal management: coastal protection through revetments, protection of homes by elevation, and protection of families by relocation of homes (retreat). In this volume, the possible magnitude of costs of a 1:100 year storm event in Lifuka has been estimated. The potential value of revetments, elevation of homes and retreat from the coastline are then estimated and considered in light of these costs.

Impact of a 1:100 year event

The Secretariat of the Pacific Community (SPC) has modelled the possible storm surge associated with a 1:100 year storm event in Lifuka (Krüger and Damlamian 2013). The model indicates that a 1:100 year event would likely inundate, to varying degrees, the majority of the occupied district around Lifuka Island, since most buildings and amenities are located along the low-lying part of the western coast.

Based on the model, two major impact zones were identified. For the purpose of this analysis, these have been considered as: (i) a hazard zone that would be inundated as a result of a 1:100 year storm event; and (ii) a high hazard zone that would be inundated as a result of such a storm, but which could also be subject to the effect of damaging waves. This zone also includes a coastal setback area that is subject to long-term coastal erosion.

Drawing on a household and technical building survey also conducted as part of the project (Sinclair et al. 2013a), it would appear that around 272 homes (the majority of homes) around Lifuka are located in hazardous/highly hazardous (including erosive) areas. Without any adaptation, the local community would face the unconstrained impact of the storm, which would likely include damage and injury from flooding and wave action, losses arising from damage (such as loss of personal possessions), as well as harm to critical amenities in the area, such as the police station, fire station, hospital, telecommunications facilities, power utilities, several schools and churches.

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No engineering assessment was available from which to calculate the cost of a 1:100 year event on the community of Lifuka. Drawing on an assessment of severe storm events occurring elsewhere (Section B), the potential damage to homes in the hazard zones was determined to provide a basis from which implications could be considered.

The minimum cost of structural damage affecting homes in a 1:100 year storm event was thus estimated to be in the vicinity of TOP 0.6–20.8 million. This range reflects assumptions of whether housing damage has a lower, middle or higher impact. Nevertheless, the range of costs estimated is highly conservative. The costs estimated do not include damage to other sectors (such as agriculture, fisheries and utilities), personal possessions, nor losses such as trauma and injury. Moreover, these costs do not include the likely costs of damage from wind shearing. This may be extensive in a community housed predominantly in wooden homes. Nevertheless, the values estimated provide a useful basis from which to consider adaptation.

In addition to the storm hazard, the community of Lifuka faces an ongoing erosion hazard along the coastline. Based on historical erosion rates, this has cost the community an average of around TOP 25,000 per year over the last 40 or so years.

Types of adaptation

Revetments, elevation of homes and retreat could take any number of forms. As a means to draw implications on the suitability of each option for Lifuka, several basic scenarios for adaptation were considered in this analysis:

Table 1: Three basic scenariosRevetments • AshortrevetmentnearthecentralbusinessdistrictofLifukawherecoastalerosionhasbeen

particularlyactive(coralblocks;cement-filledricebags)• AlongrevetmentalongthewholeshorelineofPangaiandHihifo(coralblocks;cement-filled

ricebags;combinationofcement-filledricebagsand coralblocks;coralblockrevetmentdesignedtowithstanda1:100yeartropicalcycloneevent)

Elevationofhouses • Extradesignfeatureofhouses(costontopofhousebuilding)inthehazardzones• Retrofittingexistinghousesinthehazardzones

Retreat • Immediaterelocation(permanentevacuation)fromallthehazardzones,wherefamilieshavetofaceallcostsofrelocation

• Gradualretreatfromallthehazardzonesoveronegeneration,wherefamilieshavetofaceallcostsofrelocation

• ‘Natural’retreatfromhazardouszoneswherefamiliesdonotrenovatetheirhomeswheretheyare(insitu)butinsteadestablishreplacementhomeselsewhere.Inthiscase,economiccostsarelower.

Assumptions around the nature of these scenarios were later varied in the sensitivity analysis.

Estimated returns on investment

Returns on investment were based on assumptions of the potential range of inundation damage to homes (low, medium, high) that would result if a single 1:100 year event occurred. Most returns are likely to be underestimates (Table 2) because they do not include benefits to buildings other than homes (such as schools) or other sectors (such as utilities). Moreover, the benefits valued reflect only those related to a single 1:100 year event. The adaptation options could also provide ongoing benefits as other events occur over time. Nevertheless, the values raise critical issues that need to be considered in selecting and designing the final adaptation strategy for Lifuka and elsewhere.




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Using the initial scenarios described in Table 1, no single adaptation method offers sufficient valued benefits (that is, those benefits attributed with a monetary value) to cover costs, regardless of the scale of magnitude of costs from a 1:100 year event. This probably reflects, in part, the fact that not all benefits from the options could be valued during this assessment. Nevertheless, voluntary retreat of families away from all of the hazard zones consistently offers the highest net benefit (lowest net cost) for all damage scenarios. Bearing in mind that not all the benefits from retreat have been valued (such as protection of possessions and likely reduction in injury and or trauma), it is possible that voluntary retreat could become economically efficient once these benefits are considered. If conditions are varied so that retreat from the high hazard (and erosive) area only is considered, voluntary retreat almost pays off with the benefits that are estimated. It is possible that if all other benefits such as protection of possessions are included, this option would be economically efficient.

Table 2: Estimated payoffs after 50 years TOP m (base case)

10% discount rate Low-level damage scenario

Medium-level damage scenario

High-level damage scenario

Comment

Net present value *

Benefit: cost

ratio *

Net present value *

Benefit: cost

ratio *

Net present value *

Benefit: cost

ratio *

Shortrice-bagrevetment

–0.9 0.22 –0.9 0.22 –0.9 0.22 NoimpactonhousingdamageincludedBenefitsfromlandprotectiononly

Shortblockrevetment –0.4 0.43 –0.4 0.43 –0.4 0.43

Longrice-bagrevetment –5.6 0.05 –5.6 0.05 –5.6 0.05

Longblockrevetment –2.7 0.09 –2.7 0.09 –2.7 0.09

Longcomborevetment –5.0 0.05 –5.0 0.06 –5.0 0.06

Highlyresilientrevetment

–12.0 0.02 –11.1 0.10 –11.5 0.07 Assumedtoreducehousingdamageby25%**

Buildnewbuildings1mhigher(total)

–36.5 0.00 –36.4 0.00 –35.4 0.03 BenefitsunderestimatedDoesnotincludevalueofprotectedpossessions,reducedinjuryortrauma

Buildnewbuildings1mhigher(extra)

–2.2 0.01 –2.0 0.08 –1.1 0.52

Elevateexistingbuildings1m

–9.3 0.00 –9.1 0.02 –8.1 0.22

Immediateretreat –34.6 0.00 –30.8 0.11 –32.4 0.07

Gradualretreat –13.0 0.00 –12.9 0.01 –12.9 0.01

Voluntaryretreatovertime

–0.1 0.02 –0.0 0.97 –0.1 0.57

*Netpresentvalue=totalvalueofestimatedbenefitslesstotalvalueofestimatedcosts(allin2013terms);Benefit:costratio=totalvalueofestimatedbenefitsdividedbytotalvalueofestimatedcosts(in2013terms)—anindicationofpayoffperdollarinvested.**Forillustrativepurposesonly

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It is probable that the prospect of ongoing renovation of homes in the hazard areas is likely to be more appealing to families than the prospect of establishing new homes away from the rest of the community. Consultations conducted indicate that retreat is not favoured by the community. Furthermore, access by families to new land away from the township is likely to be a major challenge. It should also be noted that retreat away from the existing township cannot be considered in isolation from the amenities and infrastructure needed to sustain lives. Families would require power, telecommunications, roads and other essential infrastructure in order to maintain standards of living in a new area. The effort involved to provide these would likely be substantial for the government.

Drawing on the initial scenarios, the next most efficient option after voluntary retreat is a short revetment. Short revetments are estimated to generate losses over 50 years of around TOP 0.4 million but, in the process of so doing, protect the land from ongoing erosion, which is important to the community. (The benefits valued from this form of adaptation option thus take the form of land values). Additionally, there may also be future benefits from preventing subsidence (where erosion has been halted) to buildings.

Nevertheless, it is important to recognise that this option is not expected to protect homes or contents, because it will not prevent inundation. (A revetment commonly incorporates a permeable filter layer as part of its structure which would, by definition, allow water to flow up and onto the land.) It is unclear if the community recognises this limitation to revetments. Furthermore, the estimates provided for a revetment do not include certain costs, such as the cost to the community of the land that would need to be surrendered to make room for the structure, nor any impact of the revetment upon the coastal ecosystem. (A revetment would interrupt existing dynamic processes and also potentially have a negative impact upon the continuation of seagrasses and related fisheries). The existence of a revetment would also act to impede public access to the beach. Any revetment would logically (and by law) require an environmental impact assessment to be undertaken and to inform mitigation of negative effects. This would presumably increase the costs (and reduce the payoffs) from this adaptation option.

When assumptions are varied, other options become economically viable. In particular, if a high-damage scenario is considered with a low discount rate, immediate relocation from the high hazard zone becomes the most efficient option, followed by elevation of houses. Elevation of houses offers the highest payoffs as floor heights are raised higher still (e.g. 2 m instead of 1 m) for houses in the high hazard (and erosive) zone.

Implications

From the initial assessment, it appears that no one strategy to adapt to coastal hazards in the face of climate change offers either a positive payoff over time (based on benefits valued). Additionally, all options come with complications:

Revetments will prevent ongoing erosion of the land but the land protected (and the homes and amenities on it) would continue to be exposed to inundation. Homes, possessions and infrastructure would continue to be damaged by inundation. Furthermore, since sea-level rise is ongoing, it would be expected that, in the long term, even revetments would cease to protect the land.

Retreat would be disruptive and likely involve highly complicated land access negotiations. Retreat is unpopular with the community.




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Elevation of houses relies on families either already planning to rebuild their houses or asking them to consider it. In any event, ongoing sea-level rise and erosion rates would suggest that homes currently situated within the highly erosive area would end up in the intertidal zone, which is unsustainable.

These complications suggest that it might be wise to consider a combination of approaches to adapt to coastal hazards in the face of climate change. For example, short-term options might be used to buy time while planning for a longer-term strategy to adapt to climate change. The strategy could involve a combination of ‘no-regrets’ and other options.

Recommendations for consideration

‘No-regrets’ options

o The storm modelling and shoreline change analyses provide new information on the hazards threatening the Lifuka community. The information should be used as the basis for the establishment of a new town plan that guides where construction and development work may occur and how.• New building codes should be established that reflect the potential hazards identified in this

project (such as the potential depth and speed of inundation). For example, these might include storm-proofing and minimum floor heights. Existing standards concerning floor heights and storm-proofing, etc. should also be emphasised and enforced. Enforcement will likely take time and resources.

• Buildings in the high hazard (and erosive) zones are exposed to both inundation and damaging waves in the event of a severe storm. The potential speed and depth (over 4 m) of inundation in some parts is alarming. Furthermore, much of the land on which buildings in the high hazard zone are located is highly dynamic, with the effect that some buildings may be at risk of being damaged in the medium term (should erosion continue at its historical rate). Logically, no new developments should occur in this area unless they are structured to accommodate emerging risks and hazards. The community might also need to recognise that choosing to establish new structures in this high hazard (and erosive) zone may ultimately generate costs for which they would be responsible.

o A number of amenities are located in the hazard zones that are critical for human protection in the event of a severe storm. These include the hospital and the fire station. Damage to these buildings during a storm would result in needless harm to community members. The government could draw on the models to establish a long-term plan to relocate critical amenities away from the hazard zones to a permanent safe location. This may ultimately require the establishment of supporting infrastructure (roads, power links, etc.). The establishment of these facilities may act, subsequently, as an incentive for community and business members to reconsider their own location.

Other adaptation options

o Families located in the high hazard zone are at severe risk of damage and personal injury in the event of a severe storm. The government should lead discussion with communities to develop a plan to support their retreat from the high hazard zone for their personal safety.

o A short coral-block revetment would provide assurance to the community of the government’s commitment to addressing community concerns regarding coastal protection. This measure may prevent future subsidence of highly exposed buildings and buy time for some families and

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businesses. However, to ensure that the community members do not gain a false sense of security from this measure, they will need to be educated on the scope of benefits and durability of this approach. Second, rule of law should be applied to revetment developments (and any other structural solutions) to ensure that: (i) the environmental and other impacts of the structure are assessed through a fully public and transparent environmental impact assessment; and (ii) any negative impacts are suitably managed in design.

o Government and community representatives need to discuss options to provide access to land for businesses and families who are at risk in their present locations and who wish to retreat from the hazard zones.

o The government may need to consider the need for incentives/financial assistance to families and businesses to understand and meet new building codes.

o Families and businesses are located in the areas they are in now for good reasons. This may include access to schools, work and business. Restrictions in land development in the hazard zones may consequently negatively affect families and businesses. The government and land owners must conduct consultations to identify the financial and other implications of land-use changes and find workable solutions to ensure the security of the community.




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2. Background

As part of its International Climate Change Adaptation Initiative, the Pacific Adaptation Strategy Assistance Program (PASAP) aims to assist the development of evidence-based adaptation strategies in partner countries. The program is being implemented by Australia’s Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE), with the primary objective of enhancing the capacity of partner countries to assess key vulnerabilities and risks, formulate adaptation strategies and plans and mainstream adaptation into decision-making.

In Tonga, DIICCSRTE is implementing the Assessing Vulnerability and Adaptation to Sea-level Rise project. The project is intended to develop an evidence-based strategy for adapting to sea-level rise while supporting the capacity of the Government of Tonga and relevant NGOs to conduct similar assessments of coastal and social vulnerability and adaptation to sea-level rise in the future.

The site for the DIICCSRTE work in Tonga is Lifuka Island in the Ha’apai Group. As well as being an atoll that faces climate change, in 2006 it experienced an earthquake that generated 23 cm of subsidence on its western side (PASAP 2011). In past years, the island has also experienced significant coastal erosion. Since sea levels are likely to continue to rise due to climate change during the 21st century, and the resulting wave impact is likely to lead to further erosion and inundation, there is a need for adaptation in preparation for the future.

As part of this project, and at the request of the Government of Tonga, SPC has modelled the possible storm surge associated with a tropical cyclone with a one in a hundred years return frequency (1:100 year event) around Lifuka. Such an event — equivalent to a tropical cyclone Category 5 — would be expected to be highly damaging to the lives and livelihoods of the Lifuka community. Assessing the impact of this scale of event will enable the government and the community to plan for future generations as climate change progresses.

Subsequent to this technical assessment is a preliminary economic assessment of options to adapt to the hazards identified in the face of ongoing climate change. This document represents Volume 2 of that preliminary assessment. It documents a provisional economic assessment of possible options to address the coastal threats arising from this 1:100 year event. On the basis of consultations conducted with the community of Lifuka, the Government of Tonga and other partners, several options to adapt to coastal inundation and storm surge were identified:

o revetments (as a means to protect the foreshore);

o retreat of families from the most hazard-prone areas; and

o elevating houses in the most hazard-prone areas.

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2.1 Cost of options

The options identified to adapt to inundation in the face of climate change were provisionally costed in Volume 1 of the economic analysis (see Technical Report C 3.0). As the discussion on possible options to adapt to inundation was still early, their specifics were not confirmed, so several scenarios were provided and costed for comparison:

o six revetment possibilities;

o two relocation possibilities; and

o two elevation possibilities.

A provisional costing indicates that the cheapest option after 50 years would probably be the establishment of a short coral-block revetment, such as exists along the main coastline of Tongatapu (Table 3). By comparison, elevating houses in the hazard zones by building new houses that are higher than before would be expected to be the most costly (Table 3).

2.2 Purpose

These provisional costs are insufficient to determine the best adaptation strategy for Lifuka for several reasons:

o Environmental costs associated with the cheapest options have not been costed. Revetments could, in fact, exacerbate coastal erosion in some areas along the Lifuka coast and the scale of these negative impacts could be large or small. Accordingly, an environmental impact assessment – as per Tonga’s Environmental Impact Assessment Act 2003 (Government of Tonga 2003) – would need to be conducted to identify any negative impacts and plan for their mitigation (such as attaching environmental conditions to the works).

o Costs are not necessarily reflective of the ability of the options to protect the community. As an example, depending on the design, a revetment may still permit the permeation of water to low land, with the effect that the community may still become inundated. This compares with elevating houses or relocating inland, where communities would not be exposed to the same degree of hazard. Accordingly, it may be practical to consider elevation or relocation of infrastructure away from the most hazard-prone areas. Alternatively, combinations of options (such as partial revetments and partial retreat) may be the most effective to combat coastal inundation and harm to livelihoods. It is therefore critical that an assessment of the possible benefits from the options is considered before options are selected. Options that do not protect the community and livelihoods should not be pursued.

This document will consider critical issues in the efficacy of options to protect the community and its livelihoods. The consideration will be made through an economic lens, using a cost–benefit framework. The outcomes of this analysis are intended to inform dialogue about adaptation options between the community, government and development partners.




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Table 3: Provisional costing of options

Option #

Adaptation option Cost after 50 years

Cost per capita

Rank (cheapest

first)

Other costs

Revetments1 Shortrice-blockrevetment 4.7m 1,601 4

PossibleenvironmentaldamagePossibleenhancederosioninlocalisedareas

2 Shortblockrevetment 0.7m 229 1

3 Longrice-blockrevetment 22.8m 7,686 8

4 Longblockrevetment 3.3m 1,101 3

5 Longcombinationrevetment 18.8m 6,325 7

6 Highlyresilientcoral-blockrevetment 12.3m 4,159 6

Elevating houses7 Buildnewhigherbuildings(total) 36.6m 12,321 11

8 Buildnewhigherbuildings(extra) 2.2m 744 2

9 Elevateexistingbuildings 9.2m 3,125 5

Retreat10 Immediateretreat 34.7m 11,700 =9

11 Gradualretreat 34.7m 11,700 =9

3. Methodology

Cost–benefit analysis is a framework that assesses and compares the benefits and costs of a project from the perspective of society (as opposed to a single individual). It involves:

o measuring the gains and losses to the community, using money as the measuring rod for those gains and losses; and

o aggregating the monetary valuations of the gains and losses and expressing them as net community gains or losses (Pearce 1983).

3.1 Identifying impacts

Identifying the benefits of adaptation to coastal inundation involves comparison of the well-being of a community without the adaptation solution to the well-being they would experience with it. Modelling conducted as part of this project (Kruger and Damlamian 2013) indicates that a 1:100 year event would likely inundate, to varying degrees, the majority of the business district on Lifuka Island, since most buildings and amenities are located along the coast. Potential areas and depths of inundation are indicated in Figure 1.

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Based on the model, several key zones were determined on Lifuka:

Null zone Area that would not be susceptible to inundation in a 1:100 year tropical cyclone event

Hazard zone Area that would be inundated during a 1:100 year event and which could be subject to waves of <1 m in height

High hazard zone Area that would be inundated as a result of a 1:100 year event and that would be subject to damaging waves of =>1 m in height

Coastal setback zone Area that is subject to long-term coastal erosion (Figure 1).

For the purpose of this preliminary economic analysis, the last two areas — the high hazard and coastal setback zone — will be considered jointly.

Based on a household and technical building survey also conducted as part of this study (Sinclair et al. 2013a), it would appear that around 272 homes around Lifuka are located in hazardous/highly hazardous inundation areas (Table 4).

Table 4: Number of houses in the hazard zones

Houseslistedinthehighhazard(includinghighlyerosive)zone 157 58%

Houseslistedinthehazardzone 115 42%

Total 272 100%

Economic assessment of adaptation options was conducted using these zones as a common basis. Assessment was conducted first using a ‘with and without’ analysis. That is, the situation facing the community was assessed without adaptation and compared with the situation they would face if the adaptation options were introduced.

Scenario without adaptation

Without adaptation, the community of Lifuka faces the unconstrained impact of a 1:100 year tropical cyclone event that would probably lead to flooding and potential damage and losses to most of these homes (Table 5), not to mention damage to other critical amenities that are also located in the area, such as the police station, fire station, telecommunications facilities, power utilities, and several schools and churches.




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Contoursshowdepthofinundationincludingwaveeffectsinmetresabovegroundlevel

Potentialsetbackzone—long-termerosionzonealsosubjecttocoastalinundationanddamagingwaves

Highcoastalhazardarea—areasubjecttocoastalinundationanddamagingwaves

Coastalhazardarea—areasubjecttocoastalinundationandwaveaction

Source:KrugerandDamlamian2013

Figure 1: Hazard zones on Lifuka

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Table 5: Potential impacts of a 1:100 year event on Lifuka

TC effect Direct impact Indirect impactLong-term additional

impacts due to climate change

Inundationwithdamagingwaveimpacts

• Damagetoproperty• Damagetoagriculture,

fisheries,utilities

• Injury• Lossesfromproperty• Otherlosses(agriculture,

fisheries,utilities,etc.)• Lossofland

IncreasedinundationIntensifiederosionSalinisationoffreshwaterlenses

Inundationwithoutdamagingwaveimpacts

• Damagetoproperty• Damagetoagriculture,

fisheries,utilities

• Injury,salinewaterIntrusiontofreshwaterstores

• Losses• Otherlosses(agriculture,

fisheries,utilities,etc.)

Highwinds • Damagetoproperty• Damagetoagriculture,

fisheries,utilities

• Injury• Losses• Otherlosses(agriculture,

fisheries,utilities,etc.)

Dynamic impacts of climate change

On top of the impacts of a cyclone, it might reasonably be expected that the impacts of a 1:100 year event would change over time due to climate change. According to the Government of Australia (2011), over the 21st century, the following climate change impacts are expected for Tonga:

o surface-air temperature and sea-surface temperature will rise; o the frequency and intensity of days with extreme heat will increase; o the frequency and intensity of days of extreme rainfall will increase; o rainfall in the wet season is expected to increase; o the dry season rainfall is projected to decrease. Overall the annual rainfall is not expected to see

much change; o tropical cyclone frequency is expected to decrease; o ocean acidification and mean sea-level rise is expected to continue.

Ultimately, this suggests that the intensity of storms may increase while their frequency decreases. The final impact on the likely harm from storms is therefore unclear. Nevertheless, some issues are clear. First, sea-level rise over time would be expected to lead to increased coastal erosion. Presently, a significant part of the coastline around Lifuka is undergoing natural erosion (Figure 2). Should biogenic coral reef production not keep pace with sea-level rise, higher sea levels could mean the depth at the foreshore would increase, allowing higher waves to reach the foreshore structures. Waves that currently break at the outer fringing reef of the lagoon would be able to propagate into the lagoon, potentially increasing the wave height significantly at the shoreline (WorleyParsons 2013). Higher sea levels could then lead to increased inundation events from storm surges. Theoretically they could also result in higher waves reaching the foreshore, which with the greater force, could lead to an intensified erosion rate.

Second, increased coastal erosion could theoretically jeopardise the freshwater lens. Kruger and Damlamian (2013) assess the historical levels of erosion that have affected the Lifuka coastline over the last 44 years (Figure 2). Freshwater assessment conducted as part of this project indicates the location and depth of key freshwater lenses on Lifuka (Figures 3 and 4). It can be seen that a key lens is relatively close to areas of active erosion. Continued erosion around these areas could jeopardise freshwater supplies.




13

Figure 2: Historical erosion rates on Lifuka Source:KrugerandDamlamian2013

Third, over an extended time period, sea-level rise could result in the submergence of land presently used for housing or commerce.

14

Figure 3: Freshwater lenses on LifukaSourceSinclairetal.2013b




15

Figure 4: Freshwater wells on Lifuka Source:Sinclairetal.2013b

The impacts of those issues related to sea-level rise (but not storm frequency) have been considered in the inundation model prepared by SPC (Kruger and Damlamian 2013). The model takes account of climate change through the following water-level issues:

o 1.2 m sea-level rise by 2100 (intermediate–high scenario as defined by Parris et al. 2012) o mean high water spring o inverse barometric pressure o wind set-up o wave run-up o ENSO.

16

For further details of how climate change was reflected in the model, see Kruger and Damlamian (2013). The results of this model form the basis for the economic assessment of potential costs of a storm event. (See below.)

Scenario with adaptation

Adaptation would be intended to mitigate the cost of a 1:100 year event. Broadly speaking, the three adaptation types would be expected to have positive impacts on structural damage to housing and potentially, positive benefits in terms of protecting lives (Table 6).

Table 6: Potential benefits of adaptation options

Option Impact?

Revetments ProtectionofcoastlinesfromhighwaterlevelsthatcontributetoongoingcoastalerosionPossiblereductionincoastalinundationfacedbybuildings

Retreat ProtectionofpossessionsandinfrastructurebyremovingthemfromhazardReducedinjuryandfatalitiesbyremovingthemfromhazard

Elevation PossibleprotectionofbuildingsbyremovingpartofthemfromhazardProtectionofpossessionsbyremovingthemfromhazardPossiblereducedinjuryandfatalitiesbyremovingpeoplefromhazard

3.2 Valuing impacts

The potential benefits of adaptation options will be considered in the context of a single 1:100 year storm event. That is, the impact of each adaptation option will be estimated in terms of how much it reduces the costs of that single event. As noted above, the harm from a 1:100 year event today may be quite different from that in the future. The costs considered in this analysis are based only on the inundation model provided as a means to determine a way forward.

In conducting the economic analysis, cost–benefit analysis is expected to consider the monetary or market value of an activity, such as the cost of items, maintenance and any benefits (e.g. reduced structural damage). Additionally, any non-market costs and benefits, such as environmental change or reduced injuries and fatalities from severe events, are usually considered in cost–benefit analysis. In practice, the (often unassessed) nature of these changes means they cannot always be easily quantified or measured in economic terms, so proxies or indicators are often used to estimate the associated values. At worst, these impacts may only be describable and not quantifiable. In this assessment, non-monetary values that are difficult to quantify will be tackled in two ways. First, where values might be significant, hypothetical values will be used in some cases to illustrate the type of impact that an adaptation option could have on damage. Second, where no indication of the size of a value is available, qualitative assessments (descriptions) will be used. It should be emphasised that not quantifying impacts in cost–benefit analysis does not mean that the impacts do not matter. However, it does mean that quantified payoffs are only indicative and that these values will need to be considered in the context of other (unvalued, qualitative) benefits and costs.

The benefits and costs of climate change adaptations will generate a flow of values over time, most commonly with investment costs occurring first and benefits flowing after. Conventionally, costs and benefits that do not arise until the future are worth less to people than costs and benefits that arise today. To reflect the true resource value to society, the value of benefits and costs in a cost–benefit analysis are discounted over time to render all values to a present-day value.




17

The appropriate selection of the rate at which to discount time is critical in determining the feasibility of an activity. Holland (2008) indicates that the range of discount values used in the Pacific in recent years varies between 3 and 12 per cent. To ensure consistency with other SOPAC analyses and to reflect development aims from a variety of perspectives, discount rates of 3, 7 and 10 per cent will be used in this analysis. Values reported will be at a discount rate of 10 per cent unless stated otherwise. For further discussion regarding discount values see Tietenberg (2000).

3.3. Sensitivity analysis

Estimation of the value of adaptation options will rely on assumed relationships between the adaptation option and the potential costs of severe events. Because these assumptions may affect the feasibility of an adaptation option, key assumptions will be varied in a sensitivity analysis to identify risks to the success of the adaptation options.

4. Results

The data used in this study was gathered from three main sources:

o published research;

o research conducted by the Secretariat of the pacific Community;

o personal communications, both remote and in-country.

Data gaps

Data on the likely impact of a 1:100 year event were not complete. Information on likely inundation levels and water velocity was missing for some homes, as was information on the structure of some homes. It was, therefore, not possible to include these homes in the assessment. This means that the likely damage cost from a 1:100 year event is slightly underestimated. The expected benefit of adaptation options would then be underestimated as they would not be applied to these homes.

4.1 Damage without adaptation

At least 13 tropical cyclone disaster events have been officially reported to have hit the Ha’apai Group in the last 100 years (Table 7). Several other (ten) tropical cyclone-related disaster events were also reported for Tonga generally that may have also affected the group, although the patchiness of records means that this cannot be determined.

Of the 13 tropical cyclone-related disasters specifically reported to have hit the Ha’apai Group, only four were associated with reports of wind speed that could allow their magnitude to be estimated. Of those four, two appear to have been of Category 4 magnitude and the other two of Category 5 magnitude – the magnitude of tropical cyclone events associated with a 1:100 year event. Both of these events were the most costly tropical cyclone events reported to hit the Ha’apai Group of those officially reported (Table 7), although some of these costs also reflect damage sustained outside the Ha’apai Group from the same event.

18

The records available from DesInventar and Pacific Disaster Net (pacificdisasternet.net) do not indicate which portion of costs of the tropical cyclone reported as hitting the Ha’apai Group could be attributed to Ha’apai or for what. As a result, based on historical data, the probable value of damage likely to hit Lifuka in the event of a 1:100 year tropical cyclone is unclear. However, certain other information can be used to estimate probable minimum costs.

Table 7: TC events to have hit the Ha’apai Group by reported magnitude

Hit Ha’apai group?

Year TCMagnitude based on

reported speedDeaths Houses

DestroyedHouses

Damaged AffectedReported costs (nominal USD

millions)

✓ 1961 HSK2061 2 8,000 0.50

✓ 1963 HSK2061

✓ 1964 HSK0265

✓ 1970 Gillian 1.20

✓ 1973 Juliette 3 1,250 0.50

✓ 1977 Pat 10,005 1.10

✓ 1977 Ernie 10,005 1.10

✓ 1980 Tia 4 5,000

✓ 1982 Isaac 5 2 146,512 20.45

✓ 1998 Cora 3,071 7.96

✓ 2001 Waka 5 300 300 68,000 48.00

✓ 2010 Rene 117 227 1,300

✓ 2011 Wilma 24 62 7,600

Unknown 1968 Giselle

Unknown 1970 Dolly

Unknown 1990 Sina 4

Unknown 1993 Kina 4 3

Unknown 1996 Yasi

Unknown 1997 Keli

Unknown 2003 Cilla

Unknown 2005 Lola

Unknown 1998 Cora 77,000 13.72*

Unknown 2003 Eseta 15,000 0.89

*USD19.6millionequivalent,basedonahistoricalexchangerateofroughlyTOP0.7:USD1.Source:DesInventar




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Value of homes

Table 4 shows that an estimated 272 homes exist in all of the hazard zones threatened by inundation in a 1:100 year event. Drawing on information from the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) (Box 1) and data collected from surveys conducted as part of this work (Sinclair et al. 2013a), the estimated cost to replace houses in all of these zones around Lifuka is in the order of TOP 34 million (Table 8).

Box 1: Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) PCRAFIisajointinitiativeofSOPAC/SPC,theWorldBank(WB),andtheAsianDevelopmentBank(ADB)withthefinancialsupportoftheGovernmentofJapanandtheGlobalFacilityforDisasterReductionandRecovery(GFDRR),andtechnicalsupportfromAIRWorldwide,NewZealandGNSScience,GeoscienceAustralia,thePacificDisasterCentre(PDC),OpenGeoandGFDRRLabs.

TheprogrammeaimstoprovidePacificIslandcountries(PICs)withdisasterriskmodellingandassessmenttools.ItalsoaimstoengageinadialoguewithPICsonintegratedfinancialsolutionsforthereductionoftheirfinancialvulnerabilitytonaturaldisastersandclimatechange.TheinitiativeispartofthebroaderagendaondisasterriskmanagementandclimatechangeadaptationinthePacificregion.

ThePacificDisasterRiskAssessmentprojectprovides15countrieswithdisasterriskassessmenttoolstohelpthembetterunderstand,model,andassesstheirexposuretonaturaldisasters.ItbuildsonclosecollaborationsbetweenSPCthroughitsAppliedGeoscienceandTechnologyDivision(SPC/SOPAC),WBandADB,withtechnicalinputsfromGNSScience,GeoscienceAustralia,andAIRWorldwide.

Amongotherthings,theprogrammeincludesaRegionalGeoreferencedExposureDatabase,whichcontainscomponentsforbuildingsandinfrastructure,agriculture,andpopulation.Theexposuredevelopmentleveragedremotesensinganalyseswithhigh-andmedium-resolutionsatelliteimagery,fieldvisits,andcountry-specificdatasets.Forthebuildingandinfrastructuredataset,morethan400,000buildingfootprintsforstructuralclassificationweredigitisedfromhigh‐resolutionsatelliteimages.Thesebuildingsrepresentabout30percentofthetotalnumberofbuildingsestimatedforthesenations.About500imagerysceneswerecollectedandorganised.

Approximately80,000buildingsandmajorinfrastructure(suchasroads,bridges,airportsandpowergenerationfacilities)wereinspectedduringfieldvisitsin11outof15Pacificislandcountries.Fieldsurveysprovidedground-truthingdataoncharacteristicssuchasstructuralsystem,constructionmaterial,occupancy,numberofstories,roofshapeandmaterialtype,andwallmaterialtype.Inadditiontothedigitisedandfield-verifiedfeaturesthatcaptureindividualstructures,remotesensingtechniqueswereappliedtoderiveaggregateestimatesforthequantityandspatialdistributionofstructuresnotdetectedbyothermethods.

Theresultingbuildingandinfrastructuredatabaseisthereforearesourcetocharacterisethebuildingenvironmentinthesenations.Lastly,apropertyexposuredatabaseisderivedfromthebuildingandinfrastructuredatabaseincombinationwithexpertresearchonpropertyvalueandreconstructioncosts.

Source:SPC2012.

Table 8: Estimated cost to replace houses (TOP)

Zone Est. cost to replace house in same formHighhazard(includingerosive)zone 20,136,156

Hazardzone 14,211,670

Total 34,347,825

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In the case of a 1:100 year event, it is improbable that all houses in all of the hazard zones would be totally destroyed. The extent of damage depends on a number of factors, including location on stable or unstable (erosive) land, proximity to the foreshore, speed of waves, elevation of the houses and level of inundation.

No engineering assessment was undertaken as part of this project to determine the likely scale of damage to be caused by inundation as a result of a 1:100 year storm event. However, indications of the minimum scale of possible damage can be inferred from WorleyParsons (2013b), who conducted an assessment of the likely impact of a severe storm on one-storey concrete homes in the French Polynesian atoll of Rangiroa (Table 9). The damage estimates provided by WorleyParsons (2013b) are already minimum estimates because they do not include the value of damage to buildings from scouring by debris (Rios Wilks 2013), nor damage from wind shearing. This may be extensive in a community housed predominantly in wooden homes. Nevertheless, the values generated do reflect possible impacts to buildings based on the depth and velocity of water around homes, and can provide an order of magnitude from which to base other assessments.

Table 9: Damage expected by inundation and velocity of water on Rangiroa Atoll for a 1:50 year storm event

Damage as % of value of single storey concrete building

Inundation depth (m) Speed (m/sec) House with ground floor unelevated

House with 1 m elevation above

ground level

Cyclone standard building with 1.5 m

elevation above ground level

<0.5 <0.5 2–7% 2% 2%

<0.5 =or>0.5 2–7%A 2% 2%

0.5–1.0 <0.5 7–15% 2% 2%

0.5–1.0 =or>0.5 7–15%B 2% 2%

>1.0 <0.5 15–22% 2–22% 2–22%

>1.0 =or>0.5 15–100%C 2–100%C 2–100%C

AForvelocitybelow3m/second.Above3m/secondcompletebuildingfailureispossible.BForvelocitybelow2m/second.Above2m/secondcompletebuildingfailureispossible.CIfvelocityexceeds2m/second,completebuildingfailureispossible.Asthereisnoupperlimittodepthandvelocity,theupperdamagerangeis100%.

Source:WorleyParsons2013b

The expected damage to buildings in Lifuka from the combined effects of inundation and flow might reasonably be higher than in Rangiroa, since the buildings in Rangiroa are cement concrete buildings rather than the wooden houses most commonly found in Lifuka. Additionally, environments around the atolls differ (such as the run-up around the atolls) while the events under consideration are different, too. (The event modelled for Rangiroa is a 1:50 year event while the event modelled in Lifuka is a 1:100 year event).

While use of the Rangiroa assessments would suggest an underestimate of the potential housing damage from a 1:100 year event, it would nevertheless allow some assessment of the relative impacts of potential of adaptation options.

Therefore, drawing on this assessment for Rangiroa houses, potential minimum estimates of damage from inundation and flow combined would be anywhere between 2 and 100 per cent (Table 9). These values were used to illustrate potential minimum damage values for a range of worst, middle and best scenarios (Table 10).




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Table 10: Assumptions for minimum scale of housing damage from depth and speed

Damage as % of value of buildingInundation depth

(m) Speed (m/sec) Best case Middle Worst case

<0.5 <0.5 2% 5% 7%

<0.5 =or>0.5 2% 5% 7%

0.5–1.0 <0.5 2% 7% 15%

0.5–1.0 =or>0.5 2% 7% 15%

>1.0 <0.5 2% 15% 22%

>1.0 =or>0.5 2% 15% 100%

Using these scenarios, minimum damage to homes from a 1:100 year event would be between TOP 0.6 million and 20.8 million at least (Table 11). Needless to say, this is a significant cost.

Table 9: Minimum damage to homes from a 1:100 year event (TOP)

Inundation and water speed damage CommentBest case Middle case Worst case603,406 3,556,724 20,84,438 Doesnotincludescouringdamagefromdebris

An alternative estimate of the possible scale of damage caused by inundation alone could be estimated drawing on Government of Queensland depth-damage curves (Annex 1). These estimates do not specify the contribution of water velocity to damage, so are not used as the key source of estimates for this study. However, estimates of impact based on these are provided in Annex 1 for further information.

Erosive land

As indicated, key parts of the Lifuka coast (most notably in the high hazard zone) are presently being eroded at rapid rates. Assessment of erosion from the last 44 years (Kruger and Damlamian 2013) indicates rates to be particularly severe north of the wharf (Figure 2), although some areas of the island are also benefitting from accretion.

Historical land loss (erosion) around the Lifuka coastline is estimated at 104,683 m2 (see Figure 2 and Kruger and Damlamian 2013) which is an average of 24,981 m2 per year. It is not certain that erosion rates around the Lifuka coastline will continue at this pace. The relatively limited time-frame for assessment does not, at this point, permit a trend analysis. Nevertheless, since land that has been assessed as being in the erosive zone of the island (Figure 2) presently contains the island’s main commercial district, the sustainability of continuing to invest in this area for commercial or administrative purposes is questionable. The buildings established might, for instance, ultimately be at risk of subsidence from ongoing erosion. The land also has relatively limited opportunities for agriculture. Drawing on an estimated land value of TOP 10.5/m per year (Grujovic et al. 2013), the average value of land lost historically due to coastal erosion on Lifuka is presently worth around TOP 24,981 per year.

Additionally, loss of land due to continued erosion would be expected to lead to damage to buildings. As indicated, almost two-thirds of houses in the hazardous zones are located in the high hazard zones, highly susceptible to erosion. At this point, it is not possible to predict the rate (or associated value) of damage to homes from coastal erosion.

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Water

The location of groundwater has been mapped as part of the project (Figure 3). Based on the survey conducted, the two key freshwater lenses around Lifuka appear to cover a total area of around 1.2 m2, holding an estimated 885,000 m3 of water (Sinclair et al. 2013b). Using a government charge for water of 2.11/m3 (Sinclair et al. 2013a, Annex 5), this represents a minimum commercial asset value of water of around TOP 1.9 million (Table 12.

Table 12: Minimum commercial values of water resource (TOP)

Freshwater lens area (m2) Available freshwater lens volume (m3) Value in TOP1,153,580 884,811 1,866,951

Ongoing erosion of the coastal zone could jeopardise the security of these water sources by potentially permitting salinisation of the water. This would likely be a slow process for several reasons.

o The lenses are already set back some way from the coastline.

o Sea-level rise is slow.

o The quality of the water in the lenses is predominately affected by rainfall rather than salinisation from the sea (Peter Sinclair, HYCOS Water Adviser, SPC personal communication 28 June 2013).

Furthermore, the present quality of water in the lens is poor (see Sinclair et al. 2013a), as very few families use the groundwater lens. Most families rely on rainwater harvesting for supplies instead. While a revetment would, in the long term, protect some groundwater from salinisation, the benefits under the circumstances are likely to be very low.

Other assets

Families living in the line of tropical cyclones will be under threat of injury and loss of possessions. No studies have been conducted of the value of assets (whiteware, etc.) in Lifuka and records of previous disasters do not enumerate these impacts. The actual value of damage to possessions may be relatively low, but in a community with limited employment options, the loss of possessions may be felt keenly.

Consultations conducted as part of this study revealed little information on the scale of injury arising from previous tropical cyclone-related disasters. Reasonably, injuries sustained by community members are covered by emergency teams that enter an area post-disaster, or are covered privately by family members. The economic cost of injuries in the event of a disaster is therefore unknown.

In addition, the area most at threat from a severe tropical cyclone contains not only families, but other industries as well. The area contains critical amenities including telecommunications and medical facilities as well as local police, fire station, schools and churches. A severe storm would likely disrupt these services through wind or inundation damage, negatively affecting the ability of the community to recover from a severe event (by treating injuries, say) as well as recover socially. Due to the limited availability of time and resources, replacement costs were not estimated for buildings that were not homes in Lifuka.




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Finally, it must be noted that while a 1:100 year tropical cyclone is a rare event, it is unlikely to be the only severe weather event to occur during that time period. Realistically, smaller tropical cyclones and storms are likely to occur in the same time period. Table 7 shows that at least 13 tropical cyclone disaster events have been officially reported to have hit the Ha’apai Group in the last 100 years. The potential costs from cyclone events generally over a 100 year period are therefore likely to be substantial.

Summary of threats in the hazard zones

A summary of the minimum estimated costs facing Lifuka from coastal hazards is provided in Table 13.

Table 13: Minimum scale of hazard threats without adaptation (TOP)

Asset Impact Average costs without adaptationDamagetohousing(inundation) High 0.6million(bestdamagecase)

3.6million(middledamagecase)20.8million(worstdamagecase)

Landerosion Ongoing 24,981p.a.

Subsidenceofbuildingsduetoerosion Ongoing–scaleunknown Notestimated

Salinisationoffreshwater Uncertain–thismaybelow Notestimated

Damagetopossessionsfrominundation Uncertain–thiscouldbehigh Notestimated

Traumafrominundation Uncertain–thiscouldbehighdependingonscaleofinjuries,damagetohomes,etc.

Notestimated

Injury,fatalitiesfrominundation Unknown Notestimated

Damagetoagriculture,fisheries,utilities,etc.frominundation

Unknown Notestimated

4.2 Benefits from adaptation options

4.2.1 Revetments

Extreme conditions such as those provided for in a 1:100 year tropical cyclone event would result in high water levels and waves that could exacerbate ongoing coastal erosion on Lifuka. According to WorleyParsons (2013), citing the US Army Corps of Engineers’ Coastal Engineering Manual (USACE 2011), revetments are hard engineering structures designed to protect the shoreline from wave-induced erosion by placing an erosion-resistant cover directly on an existing slope or embankment. Revetments are often set at a slope and are designed to absorb rather than reflect wave energy (WorleyParsons 2013).

Revetments have several pros and cons related to coastal management (Table 14).

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Table 14: Pros and cons of revetments

Pros Cons

• Canbeeffectiveinprotectingthelandwardinfrastructurefromerosion.

• Absorbwaveenergyandresultinlesserosionontheseawardsideofthestructurewhencomparedwithaverticalseawall.(However,theycanstillcauseerosionontheseawardsideofthestructuredependingonthestructureslope.)

• Wouldallowdevelopmenttocontinuetooccurinitscurrentlocationastheyreducethecoastlinerisktothoseproperties.

• Canbecostlytoconstruct.• Maynotnecessarilymitigateinundation,andmayprovidethe

communitywithafalsesenseofsecurityindevelopingtheareabehindtherevetment.

• Candetractfromthevisualandrecreationalamenityofthebeachiftheyarenotcombinedwithbeachnourishmentandcoveredinavegetateddune.

• Havealargefootprintareaandwoulddisturbalargewidthofembankmentduringtheirconstruction.

• Canresultinhigherratesofbeacherosionattheendsoftherevetmentduetoedgeeffectsandthereforerequiremorebeachnourishment.

• Requireongoingmaintenance.

Source:WorleyParsons2013

Revetments may minimise coastal erosion by providing a buffer to the land. By protecting against coastal erosion, they can allow coastal development to persist in the short to medium term (WorleyParsons 2013). By protecting the land, revetments can also reduce the extent to which buildings are exposed to subsidence.

On the other hand, revetments could not be expected to have a positive impact on all assets under threat. First, revetment structures adopted in Tonga are unlikely to substantially reduce coastal inundation. This is because a common major feature of revetments is the use of filter layers which, together with under layers, allow for the passage of water through the structure in order to break up and absorb the energy of the waves (USACE 2003). By definition, the existence of such filters means that a revetment (while protecting the coastline from erosion) would not keep land behind it dry in the event of a severe wave event. That is, the coastal area would still be inundated if construction specifications for standard revetments as used in Tonga (adaptation options 1–5 in Table 3) were used. This logic is consistent with WorleyParsons (2013) who, in assessing the efficacy of structural solutions to coastal inundation on the Pacific atoll of Rangiroa (French Polynesia), observes that even an elevated revetment may not reduce the depth of flooding to houses. This also means that the impact in protecting possessions or health would be limited (Table 13). To minimise inundation, a high crest and substantial slope and armour size would be required (adaptation option 6 in Table 3).

If revetments are not expected to prevent land and buildings from inundation, the question of the value of land in areas of potential inundation arises. Should land that is at risk from severe inundation (and wave pressure) be used for habitation and commerce? If not, and if it has low agricultural potential, what is the benefit of protecting the land?

Second, existing coastal processes can be expected to continue to result in long-term shoreline erosion, with future climate change impacts making maintenance of structural coastline protection unviable in the longer term (WorleyParsons 2013:25). In other words, any benefits in the form of land and building protection would not endure into the long term, regardless of the form of revetment.

For the purpose of this analysis, it is assumed that all forms of revetment are maintained and would prevent erosion for 50 years but that only adaptation option 6 (the highly resilient revetment) would reduce inundation. Elevated structural measures, such as the highly resilient structure described in WorleyParsons (2013a), could then reduce the velocity of a storm surge, reducing the risk of any building failure (as well as any damage to foundations from scouring). As can be seen from Table 9, changes in the velocity of a storm




25

surge might not strongly affect the range of damage expected in a concrete home. For example, houses with inundation of <0.5 m would be expected to sustain a range of damage of 2–7 per cent, regardless of velocity, while houses with inundation of between 0.5 m and 1 m would be expected to sustain damage in the order of 2–15 per cent, regardless of velocity. For a concrete home on Rangiroa, the only benefit in terms of expected damage would be for those homes in the direct firing line of the waves.

In comparison to Rangiroa, homes in Lifuka are generally wooden structures, which are less strong than concrete homes and so may benefit more from a reduction in velocity. However, the extent to which they could reduce damage is not known without an engineering assessment. In the absence of further data to quantify the extent that revetment option 6 might reduce damage, a reduction of 25 per cent is considered for illustrative purposes.

Types of benefits from revetments might then appear as in Table 15. Estimated values in the first instance are summarised in Table 16. It can be seen that none of the revetment types appears to pay off, based on estimated values. This is largely due to the high up-front investment costs required. Benefits come principally from the protection of land from erosion. On the other hand, several benefits are not valued (Table 15), such as any benefit revetments may have on physical health, security, agriculture, fisheries or utilities. It is possible that (if these values were measured) revetments may then pay off, although the low present values would make this somewhat questionable.

Table 15: Impacts of revetment options

Standard Tonga revetment (options 1–5) Highly resilient revetment (option 6)

Asset Probable impact Saving/ comment Probable impact Saving/

commentBuildingsatthreatfrominundation Nilduetofilterlayer Nil Reducedinundation Yes

Landunderthreatfromerosion

Erosionhaltedandlandprotectedinshorttomediumterm

YesErosionhaltedandlandprotectedinshorttomediumterm

Yes

Buildingsatthreatfromsubsidenceduetoerosion

Buildingsprotectedinshorttomediumterm

UnknownNotestimated

Buildingsprotectedinshorttomediumterm Notestimated

FreshwaterlensSalinisationpreventedduetoprotectionoflandinshorttomediumterm

LowNotestimated

Salinisationpreventedduetoprotectionoflandinshorttomediumterm

LowNotestimated

PossessionsLimitedsincewaveactionnotmitigatedandcoastalinundationpersists

LowNotestimated

Limitedsincewaveactionnotmitigatedandcoastalinundationpersists

LowNotestimated

Trauma Limitedsincewillnotpreventinundation

LimitedNotestimated Limited Limited

Notestimated

Physicalhealth,securityLimitedimpactoninjury,fatalitiessincefamiliesinlineoffire

NotestimatedLimitedimpactoninjury,fatalitiessincefamiliesinlineoffire

Notestimated

Agriculture,fisheriesetc. Nil Notestimated Nil Notestimated

Utilities Unknown Notestimated Unknown Notestimated

Other

PotentiallynegativeimpactoncoastalviewPotentiallynegativeimpactsontheecosystem

Notestimated

PotentiallynegativeimpactoncoastalviewPotentiallynegativeimpactsontheecosystem

Notestimated

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Table 16: Estimated payoffs of revetment types

NPV after 50 years

B:C ratio after 10

years

B:C ratio after 20

years

B:C ratio after 50

yearsAssumption

Shortrice-bagrevetment –941035.95 0.18 0.22 0.22 Doesnotreducedamagetobuildings

Shortblockrevetment –356210.85 0.26 0.37 0.43 Doesnotreducedamagetobuildings

Longrice-bagrevetment –5554845.00 0.04 0.05 0.05 Doesnotreducedamagetobuildings

Longblockrevetment –2746453.31 0.05 0.08 0.09 Doesnotreducedamagetobuildings

Longcomborevetment –4970533.32 0.04 0.05 0.05 Doesnotreducedamagetobuildings

Highlyresilientrevetment –11947859.02 0.02 0.03 0.03 Reduceshousingdamageby25%

DiscountRate=10%

4.2.2. Elevation

Since inundation of buildings is a prime cause of costs from a severe event, elevation of buildings, either by retrofitting or replacing old buildings with new ones, is an obvious matter for consideration. Unlike revetments, elevation of buildings will have a direct impact on the level of damage sustained. While not affecting the speed of water around a home, it would nevertheless reduce that component of damage caused by inundation. For the purpose of conceptualising this, elevation would have the effect of shifting a home further up the Tables 9 and 10, reflecting that they would face lower damage levels.

In reducing damage to homes, it might reasonably be expected that elevation would also reduce damage to possessions and could (provided people were sufficiently elevated) protect them from injury. These benefits — reduced damage to buildings, possessions and possibly to people — would occur regardless of how elevation is achieved. That is, the benefits would occur regardless of whether the houses are built elevated or are retrofitted.

Nevertheless, since inundation is only one cause of injury from a severe event, it would not be expected to negate all injuries (People could still be injured from flying debris, for example). Plus, it is unlikely that many homes would be elevated to a point where those under 4 m of inundation (Figure 1) would be totally unscathed.

Unlike revetments, elevation would have no impact on the protection of land, water resources or subsidence caused by coastal erosion (Table 17) since coastal erosion would continue unimpeded.




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Table 17: Impacts of elevation options

Asset Probable impact Saving/comment

Damagetohousing Reduced (Tables18–20)

Landerosion Nil 0

Subsidenceofbuildingsduetoerosion Nil Notestimated

Salinisationoffreshwater Nil Notestimated

Damagetopossessionsfrominundation Reduced Notestimated

Traumafrominundation Reduced Notestimated

Injury,fatalitiesfrominundation Reduced Notestimated


? Notestimated

4.2.3 Retreat

Many families and businesses are located in the low-lying coastal areas around Lifuka. These community members are no doubt located there for good reasons. This may be because of access to schools, work and business, not to mention access to land.

Despite these benefits, many of these community members are exposed to inundation in the hazard areas, some to a depth of 3–4 m. In light of this, the sustainability of remaining in the hazard zones (especially the high hazard and erosive zone) arises. On the basis of the modelling and satellite image analysis conducted, an estimated 272 homes are located in all the hazard zones and are under threat from inundation and storm damage (to varying degrees). Logically, families that are located away from these zones would have a minimum threat of inundation, considerably reduced threat of inundation damage to their possessions and an associated reduction in trauma. Additionally, location outside of the hazard zones would mean that the threat of subsidence from erosion would be removed because homes would not be around to subside. By comparison, families housed outside the hazard zones would remain at risk from damage and injury arising from shearing and flying debris. Additionally the coastline would not be protected and erosion would continue unimpeded (Table 18).

Table 18: Impacts of retreat

Asset Probable impact Saving/comment

Damagetohousing Reduced (Tables18–20)

Landerosion Nil 0

Subsidenceofbuildingsduetoerosion Avoided Notestimated

Salinisationoffreshwater Nil Notestimated

Damagetopossessionsfrominundation Substantiallyreduced Notestimated

Traumafrominundation Substantiallyreduced Notestimated

Injury,fatalitiesfrominundation Reduced Notestimated


? Notestimated

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The value of benefits that can be achieved from retreat would depend on a number of issues, including how it was achieved. While immediate retreat by families from the hazard zones would confer immediate protection of families and possessions, it would be difficult logistically to organise and represents a massive investment of behalf of the community. Alternatively, families in the hazard zones might be encouraged to retreat gradually over time to higher ground. There again, only those in the high hazard (and erosive) zones might retreat. The possibilities are infinite.

As a basis to initially consider the implications of retreat, three scenarios are considered.

o Immediate retreat from homes in all the hazard zones

o Retreat of families over time from all the hazard zones where families are encouraged to move over time (say, given a generation over which to move — ‘gradual’ retreat)

o Retreat of families over time from all the hazard zones where families voluntarily retreat as their homes deteriorate (‘voluntary’ retreat). In the case of voluntary retreat, houses deteriorate over time and ultimately need to be replaced or extensively renovated. In this case, families could choose not to renovate their home at its existing location, but re-establish elsewhere. The economic cost of adaptation through such voluntary retreat is just the extra cost (and inconvenience) families face to access new land, recognising that they would face building costs for the house eventually, regardless. It is not known at this point which homes require extensive renovation in the hazard zones and which do not.

As an illustration of the potential payoff for both gradual and voluntary retreat, ten homes are considered for relocation per year. (That is, ten families retreat per year until all are moved. This would take around 28 years.)

These and other scenarios will be revisited in the Sensitivity Analysis (Section E).

The scenarios provided for this assessment are illustrative and are not the only ways in which adaptation to coastal hazards in the face of climate change may be conducted. For example, elevation of houses may take many forms (different heights, imposition of building codes, change over time) and the benefits will vary over time as a result. Similarly, the assessment of retreat was based on three simple approaches when in fact this might take a different shape, say through relocation of only most at-risk families. (See the sensitivity analysis which includes this issue.)

It is neither practical nor realistic to identify and then assess all possible ways in which an adaptation may be conducted. The scenarios provided nevertheless establish a foundation for dialogue and consideration of adaptation. Following are the estimated results of the three forms of adaptation over a 50-year investment period. These results are based on values estimated. Nevertheless, it must be recognised that not all the benefits arising from adaptation measures were measured. For example, no estimate was made of the value of savings to the community in terms of protected health, possessions, utilities or reduced trauma. Additionally, benefits estimated reflect the savings from a single 1:100 year event. In all probability, adaptation measures that protect the community would also offer interim benefits from other smaller events. These are not costed here. As a result, all estimated payoffs are only minimum estimates that should be used only to guide consideration of adaptation. Values are not the final word on this matter.

The benefits valued reflect minimum estimates of potential payoffs based on the structure of homes and protection of land for a single 1:100 year event. Benefit: cost ratios — the value saved for every dollar invested — are presented to two decimal places (rounded).




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The adaptation that offers the highest estimated benefits varies, depending on whether a best case (low damage), middle case or worst case (highest damage) situation is assumed for a 1:100 year storm event.

Summary of results

At a 10 per cent discount rate and based on the benefits valued, no adaptation method initially offers sufficient benefits to cover costs, regardless of the scale of magnitude of costs from a 1:100 year event (Tables 19–21). However, voluntary retreat of families away from all the hazard zones consistently offers the lowest net costs (highest net benefit) for all damage scenarios, with the benefits increasing as the damage scenario worsens. (That is, where the damage from a 1:100 year event is envisaged to be increasingly severe, the value of this option improves.) The relative efficiency of voluntary retreat arises because it assumes that families would gradually replace their homes over time away from the hazard zones, rather than renovating their homes in situ. After 50 years, the net costs of this option with a discount rate are around TOP 0.1 million (depending on the damage scenario chosen), lower where discount rates are lower. Realistically, the benefits would be higher because not all benefits from retreat have been valued (such as protection of possessions, likely reduction in injury and/or trauma). It is possible that voluntary retreat could become economically efficient in these circumstances.

It should be noted that the relatively high payoff in this circumstance is due to the fact that the true cost of adaptation in this case is effectively the cost of land, since families would ultimately have to renovate or replace their homes over time, regardless.

The next most efficient option is a short revetment. This is estimated to generate losses over 50 years in the vicinity of TOP 0.4 million. The benefits valued from this type of adaptation option take the form of the value of land protected but no immediate protection to homes or contents are assumed. Having said this, a revetment may also offer some unvalued benefits in the medium term from preventing subsidence of buildings otherwise exposed to erosion.

The lowest payoffs from adaptation reflect options where new homes are built with elevation and the full cost of homes is included in their price (retreat or replacement of homes with new elevated houses). On the other hand, if the elevation component of a new home is considered in isolation, this option to adapt to coastal hazards becomes more efficient.

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Table 19: Estimated minimum payoffs (best-case damage scenario)

NPV after 50 years

B:C ratio after 10

years

B:C ratio after 20

years

B:C ratio after 50

years Comment

Shortrice-bagrevetment –941036 0.18 0.22 0.22

NoimpactonhousingdamageincludedBenefitsfromlandprotectiononly

Shortblockrevetment –356211 0.26 0.37 0.43

Longrice-bagrevetment –5554845 0.04 0.05 0.05

Longblockrevetment –2746453 0.05 0.08 0.09

Longcomborevetment –4970533 0.04 0.05 0.05

Highlyresilientrevetment –12051096 0.01 0.02 0.02 Assumedtoreducehousingdamageby25%*

Buildnewbuildings1mhigher(total) –36532784 0.00 0.00 0.00

UnderestimateDoesnotincludevalueofprotectedpossessions,reducedinjuryortrauma


–2184959 0.01 0.02 0.01

Elevateexistingbuildings1m –9250307 0.00 0.00 0.00

Immediateretreat –34649527 0.00 0.00 0.00

Gradualretreat –12985619 0.00 0.00 0.00

Voluntaryretreatovertime –135238 0.02 0.02 0.02

Discountrate=10% Valuespresentedto2decimalpoints.Values‘0.00’arepositivebutverylow.*Illustrativepurposesonly

Table 20: Estimated minimum payoffs (middle-case damage scenario)

NPV after 50 years

B:C ratio after 10

years

B:C ratio after 20

years

B:C ratio after 50

years Comment











–2034638 0.05 0.07 0.08


Immediateretreatfromallhazardzones(totalcost)

–34327430 0.01 0.01 0.01

Gradualretreatfromallhazardzones(totalcost)

–12974570 0.00 0.00 0.00

Voluntaryretreatfromallhazardzones(extracost)

–124189 0.10 0.10 0.10





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Table 21: Estimated minimum payoffs (worst-case damage scenario)

NPV after 50 years

B:C ratio after 10

years

B:C ratio after 20

years

B:C ratio after 50

years

Comment











–1063264 0.32 0.45 0.52


Immediateretreat –32442199 0.04 0.06 0.07

Gradualretreat –12909900 0.01 0.01 0.01

Voluntaryretreatovertime –59519 0.57 0.57 0.57


5. Sensitivity analysis

A number of assumptions were made in the initial estimation of payoffs of the adaptation options. When these assumptions are varied, the most efficient course of action can change. While holding all other assumptions constant, a variety of key assumptions are varied below to identify any major implications for adaptation opportunities. In theory, multiple assumptions could be varied at the same time, but the combinations are endless. The sensitivity analysis provided here is, therefore, intended to indicate key trends and not address all possible permutations.

Area of retreat

Initial estimates of the payoffs from retreat are made assuming that all families in all hazard areas relocate. In practice, this may be unrealistic. Instead, families might move only from the most hazardous zone (the high hazard and erosive areas) while other families seek alternative solutions (such as elevating houses).

If retreat was to occur only from the high hazard (and erosive) area, the costs of retreat would be lower. If families were expected to face the full cost of establishing new homes (total costs of retreat), the payoffs of retreat from the high hazard zone would remain low due to the large up-front costs (Table 20). However, if families needed to replace their homes already and so had to bear only the additional cost (and inconvenience) to access land and settle elsewhere, immediate retreat would offer a substantial payoff. In practice, it is unrealistic to think that all families would require extensive home renovation at the same time. Therefore it is notable that voluntary retreat over time would also almost pay off if retreat from the high hazard (and erosive) area only was considered (Table 22).

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Level of home elevation

Estimates of the value of elevating homes are initially made on the assumption that they are raised by 1 m. If homes are elevated by 2 m and all other assumptions were held constant (for example, all homes in all the hazard zones remain considered), elevating homes would offer the highest minimum payoff for a worst case damage scenario (at a 10 per cent discount rate — Table 23). In this case, the estimated net benefits are still negative but, considering that the benefits valued do not include protection to possessions or prevention of injury, it is possible that this option may offer positive net benefits under this circumstance.

Discount rates

Discount rates reflect the value that society puts on time. A high discount rate suggests that society is more concerned about the costs and benefits that face present generations (effectively that it favours a quick turn-around) while a low discount rate suggests that society weighs the values faced by future generations more heavily.

Voluntary retreat remains the most efficient option at high (both 7 and 10 per cent) discount rates (Tables 24–26). However, where the discount rate is low (3 per cent), short coral-block revetments become the most efficient adaptation measure under low and medium damage scenarios due to the comparatively low investment cost (Table 25).

Under a high damage scenario, a reduction in discount rate means that several options become economically efficient, with elevation of homes offering the highest net benefits (Table 26).

Impact of revetments on housing damage

For Tonga-style revetments, no benefit has been imputed for a reduction in damage to home and estimated payoff rates for revetments based on quantified benefits are low (Tables 19–21). If revetments could be proven to reduce damage to housing structures, the estimated payoffs would be higher.

To illustrate the potential impact that the protection of homes would have on payoff rates, a reduction of 25 per cent structural damage to homes has been tested (Table 27). In this case, holding all other assumptions constant (for instance, assuming that all families in all of the hazard zones retreat, etc.), a short revetment would become the most efficient option for adaptation in a high damage scenario, although voluntary retreat is estimated to remain the most economic option. It should be recognised that there is no evidence presently to suggest that such a benefit to houses might be achieved.

Area of elevation

Initial estimates of the payoffs from elevating homes are made, assuming that all homes within all the hazard zones are elevated by 1 m — either by rebuilding from scratch or by retrofitting. In practice, elevation of homes may only occur in some areas. As an indication of the implications, assessment was made of the payoffs to elevate homes by 1 m if this was conducted only in the high hazard (and erosive) zones.

If elevation was conducted in high hazard zones only, this option remains uneconomic (based on benefits valued) but increases in feasibility to become the third most viable (third least unviable) option (Table 28).




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Table 22: Benefits of retreat from the high hazard (and erosive) zone only (all cases)

Best case Medium case Worst case

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

yearsComment

ImmediateretreatfromHIGHhazardzonesonly(total)

–20305812 0.00 –20055062 0.01 –18421747 0.09 Totalcosttoreplaceexistinghomeswithsimilar(new)elevatedhousesandbuyland

ImmediateretreatfromHIGHhazardzonesonly(extra)

–169657 0.19 81094 1.39 1714408 9.21 Extracost(landaccessonly)

VoluntaryretreatovertimefromHIGHhazardzoneonly(total)

–7844527 0.00 –7835661 0.00 –7777907 0.01 Totalcosttoreplaceexistinghomeswithsimilar(new)elevatedhousesandbuyland

VoluntaryretreatovertimefromHIGHhazardzonesonly(extra)

–79135 0.02 –70268 0.13 –12515 0.84 Extracost(landaccessonly)

Discountrate=10%

Table 23: Benefits of increased elevation (all cases)

Best case Medium case Worst case NPV after

50 years B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

Comment

Buildnewbuildings2mhigher(total)

–36509635 0.00 –36233499 0.01 –34473740 0.06 Totalcosttoreplaceexistinghomeswithsimilar(new)elevatedhouses


–2161810 0.02 –1885674 0.15 –125915 0.94 Costofelevationonly(replacementhomes)

Elevateexistingbuildings2m

–9227159 0.00 –8951022 0.03 –7191263 0.22 Retrofitting

Discountrate=10%

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Table 24: Impacts of discount rates on payoffs after 50 years (best case, least damage scenario)

10 per cent 7 per cent 3 per cent NPV after

50 yearsB:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

yearsShortrice-bagrevetment –941036 0.22 –1169087 0.24 –1907270 0.26

Shortblockrevetment –356211 0.43 –266019 0.58 9902 1.02

Longrice-bagrevetment –5554845 0.05 –7016643 0.05 –11676065 0.05

Longblockrevetment –2746453 0.09 –2680016 0.12 –11677958 0.05

Longcomborevetment –4970533 0.05 –-6115261 0.06 –9767570 0.06

Highlyresilientrevetment –12051096 0.02 –11948832 0.03 –11637979 0.06

Buildnewbuildings1mhigher(total) –36532784 0.00 –36524630 0.00 –36499846 0.00

Buildnewbuildings1mhigher(extra) –2184959 0.01 –2176805 0.01 –2152021 0.03

Elevateexistingbuildings1m –9250307 0.00 –9242154 0.00 –9217370 0.01




ImmediateretreatfromALLhazardzones(total)

–34649527 0.00 –34626233 0.00 –34555424 0.00

GradualretreatfromALLhazardzones(total)

–12985619 0.00 –16407757 0.00 –24203205 0.00

VoluntaryretreatovertimefromALLhazardzones(extra)

–135238 0.02 –170877 0.02 –107034 0.04

Table 25: Impacts of discount rates on payoffs after 50 years (middle-case damage scenario)



years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50





Longcomborevetment –4954081 0.06 –6115261 0.06 –9767570 0.06









–34327430 0.01 –34190122 0.02 –33772746 0.03


–12974570 0.00 –16393796 0.00 –24182612 0.00


–124189 0.10 –156917 0.10 –86440 0.22




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Table 26: Impacts of discount rates on payoffs after 50 years (worst-case damage scenario)



years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50








Buildnewbuildings1mhigher(extra) –1063264 0.52 –658064 0.70 573632 1.26



Buildnewbuildings2mhigher(extra) –125915 0.94 611079 1.28 2851334 2.29



–32442199 0.07 –31637576 0.09 –29191745 0.16


–12909900 0.01 –16312083 0.01 –24062076 0.01


–59519 0.57 –75204 0.57 34095 1.31

Table 27: Estimated payoffs if standard revetment cuts damage by homes (all cases)

Low damage scenario

Medium damage scenario

High damage scenario

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years Shortrice-bagrevetment –924584 0.24 –844059 0.30 –372751 0.69





Discountrate=10% Valuespresentedto2decimalpoints.*Illustrativepurposesonly

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Table 28: Estimated payoffs if homes are elevated only in the high hazard (and erosive) zones (all cases)

Low damage scenario

Medium damage scenario

High damage scenario

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years

NPV after 50 years

B:C ratio after 50

years Buildnewbuildings1mhigherinHIGHhazardzoneONLY(total)

–21381149 0.00 –21295982 0.00 –20569889 0.04

Buildnewbuildings1mhigherinHIGHhazardzoneONLY(extra)

–1244994 0.00 –1159826 0.07 –433733 0.65

Elevateexistingbuildings1minHIGHhazardzoneONLY

–5096562 0.00 –5011394 0.02 –4285302 0.16

6. Implications

Based on the modelling conducted for this study (Kruger and Damlamian 2013), the potential damage from a 1:100 year storm event in Lifuka is undoubtedly high. In all initial damage scenarios provided, voluntary retreat of homes from the hazard zone is the most economically efficient adaptation measure to coastal hazards in the face of climate change. This is because the additional cost of retreat, when considered in light of the inevitable need to replace homes sooner or later, is low. However, the ability of this measure to generate real benefits hinges on acceptability.

In reality, retreat is likely to be difficult. First, land acquisition is difficult. Land in Tonga is owned by families for generations and is not commonly sold. Second, even if land were to be accessed for families to build on, the costs of a new home would fall to a family to cover, compared with a revetment which would normally be funded by the government. The prospect of having to face these costs compared with a free revetment is unlikely to be attractive to the community.

In a similar way, asking the community to retreat to higher ground is unlikely to be affordable where families have no plans to rebuild or renovate already. Furthermore, consultations conducted indicate that retreat is not necessarily a popular move with the community. Sinclair et al. (2013a) and SPC (2013) both note that retreat was not commonly identified as an option among the community or (if it was raised) was not favoured. On the other hand, the report B.2.2 Community Values and Social Impact Analysis observes: ‘The majority of people interviewed (67 out of 72) who were living in the coastal zone most at risk clearly stated that they would move if land was available and if they could get government assistance’. It may then be possible for this option to work in selected circumstances if support could be achieved.

The adaptation option most commonly raised by the community is revetments (Leduc and Otuafi 2013, p. 27.). Based on benefits valued, a short coral-block revetment was estimated to generate relatively low negative costs over 50 years, and potentially offer net returns, provided the discount rate is low (and/or if it could protect homes from inundation damage, although this must yet be proven). It is possible that the efficiency of this option might be increased if costs could be reduced (say, if the community could contribute to maintenance over time).




37

Revetments offer an opportunity for the community to protect scarce land. Relatively speaking, they are also considerably more affordable for the community on the grounds that (i) the cost would logically be footed by either the government or a development partner, and (ii) if the community did have to contribute to the cost, it is relatively cheap.

It needs to be recognised that revetments are not expected to protect homes or possessions. Since land may be protected using this option, but houses and possessions would not, the question must be asked what the land would continue to be used for. Sea-level rise is ongoing and, sooner or later, the risk exists that the land, while continuing to exist, will be unsuitable for habitation because of the encroaching coast. In the long term, even revetments would cease to protect the land.

Based on community consultations conducted so far, it is not presently clear that the community understands the nature of benefits that revetments generate. The community recognises that revetments protect land in the medium term, but it is not clear that they see that revetments do not prevent inundation or protect their homes. There should be no risk of generating a false sense of security among the community from revetments. Any revetment should naturally be supported by a suitable awareness scheme focusing on what the structure does.

Volume I of this preliminary economic analysis (Report C.3.0.) observes that the costs estimated for revetments reflect only operational (material) costs, but do not reflect any environmental impacts. The authors (Grujovic et al.)observe that revetments require a wide footprint (effectively, they are resource-hungry) to be effective, and that they can have a detrimental impact on the coastal marine habitats due to the increased levels of turbidity or burying that would occur during construction. This may have a negative effect on seagrass beds and coral colonies. By building up the coastal defences, revetments may also impede public access to the beaches and have negative visual effects. None of these values have been included in the assessment and would reduce payoffs. Additionally, it suggests that, consistent with already existing environmental impact assessment legislation (Government of Tonga 2003), any revetments would be subject to an environmental impact assessment to inform design and mitigate negative impacts. This would presumably increase the costs (and reduce the payoffs) from this option.

Where discount rates are low and the damage scenario is high, several adaptation options become feasible from an economic perspective under a situation of high damage. This includes building elevation into the establishment of new houses in the hazard zones (assuming that all homes will inevitably all need to be rebuilt at some point). Elevation is most effective when targeted at the high hazard (and erosive) areas.

There are, nevertheless, two drawbacks to the home elevation option. First, ongoing renovation of homes in the hazard areas is likely to be a more appealing investment to families than the prospect of a new home away from the rest of the community. Even if they were prepared to retreat, families might be reluctant (and potentially unable) to move without the prior existence of supporting infrastructure such as roads, power and telecommunications. These items were not included in the analysis and would ultimately require considerable planning by the Government of Tonga.

Second, it needs to be recognised that elevation of homes to adapt to climate change is a medium-term solution but not a long-term solution. Ongoing sea-level rise will likely eventually result in coastal areas of Lifuka being subject to tidal cover. The time will come where, even if a house could remain intact above inundation, it will be impractical to leave a functioning house in the water.

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Where to from here?

Preliminary economic assessments of efficiency of the options for adaptation are initially all poor. Recognising that not all benefits have been valued, this would suggest that no one option is sufficient to justify on a purely cost–benefit basis. Working from the assumptions provided, voluntary retreat would appear to offer the highest net benefits for the community of Lifuka, but this option is not popular with the community. The community favours revetments, although the benefits from this option are under question.

The difference in potential benefits and community support possibly suggests that some combination of options may be required. There are two sets of issues to consider in this context. First, if suitably managed, it may be possible to achieve some level of no-regrets adaptation. No-regrets approaches to adaptation effectively refer to actions that increase the resilience of a community regardless of the future impacts of climate change (see UNDP 2010).

No-regrets options

Logical no-regrets options might include the development of a new town plan that takes account of the assessed hazards when considering new developments. A new plan would guide where and what sort of development should occur on the island in light of existing threats. Such guidance would logically include restricting new developments in the high hazard (and erosive) zone unless they are structured to accommodate emerging risks and hazards. Furthermore, there would need to be some form of awareness-raising and education in the community to ensure that the community is aware (i) of the risk in these areas, and (ii) that establishing new structures in these high hazard (and erosive) areas could ultimately impose risks (possible damage and costs) that it would need to absorb.

In light of this, it would also be sensible to establish building codes that reflect the potential hazards identified in this project (such as the potential depth and speed of inundation) as well as enforce existing standards (such as any related to storm-proofing). Government consultations indicate that existing standards may not always be observed. In light of the hazards facing the area, it may be timely to ensure that awareness of these regulations is increased and the rules enforced from now on. Enforcement would likely take time and resources for the government to achieve.

Third, a number of amenities located in the hazard zones are critical for human protection in the event of a severe storm. These include the hospital and the fire station. Damage to these buildings during a storm would result in needless harm to community members. Furthermore, these amenities will ultimately be at threat from coastal erosion. The government could draw on the models to establish a long-term plan to relocate critical amenities away from the hazard zones to a permanent safe location. This may ultimately require the establishment of supporting infrastructure (roads, power links, etc.). The establishment of these facilities may subsequently act as an incentive for community and business members to reconsider their own locations.

Other adaptation options

A second group of options should also be considered. These options require discussion and consultation among the government and community to determine their design. Options to consider include the following:

o Families located in the high hazard zone are modelled to be at severe risk of damage and personal injury in the event of a severe storm. Government should work with communities on a medium-term plan to support families in the high hazard zone to retreat permanently, for their personal safety.




39

o A short coral-block revetment would provide assurance to the community of government commitment to addressing community concerns regarding coastal protection. This measure may prevent future subsidence of highly exposed buildings and buy time for some families and businesses. However, to ensure that the community members do not gain a false sense of security from this measure, the community will need to be educated on the benefits and longevity of this approach. Second, rule of law should be applied to revetment developments (and any other structural solutions) to ensure that (i) the environmental and other impacts of the structure are assessed through a fully public and transparent environmental impact assessment, and (ii) any negative impacts are suitably managed in design.

o Government and community representatives need to discuss options to provide access to land for businesses and families who are at risk in their present locations and who wish to retreat from the hazard zones.

o The government may need to consider the need for incentives/financial assistance for families and businesses to understand and meet new building codes.

Families and businesses are located in the areas they are in now for good reason. This may include access to schools, work and business. Restrictions in land development in the hazard zones may consequently negatively affect families and businesses. The government and land owners must conduct consultations to identify the financial and other implications of land-use changes and find workable solutions to ensure the security of the community.

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7. References

Government of Australia, 2011. Climate Change in the Pacific: Scientific Assessment and New Research, http://www.cawcr.gov.au/projects/PCCSP/publications.html (accessed December 2012).

Government of Tonga, 2003. Environmental Impact Assessment Act 2003, No. 16 of 2003, available online at: http://legislation.to/Tonga/DATA/PRIN/2003-016/EnvironmentalImpactAssessmentAct2003.pdf.

Grujovic, A., Holland, P. and Rios Wilks, A. 2013. Assessing Vulnerability and Adaptation to Sea-Level Rise Lifuka Island, Ha’apai, Tonga. Technical report C.3.0: Preliminary Economic Analysis of Adaptation Strategies to Coastal Erosion and Inundation: Lifuka, Ha’apai, Kingdom of Tonga: Volume 1 – Least Cost Analysis. Secretariat of the Pacific Community.

Holland, P. 2008. An Economic Analysis of Flood Warning in Navua, EU-SOPAC Project Report 122, Fiji.

Kruger, J. and Damlamian, H. 2013. Coastal Hazard Mapping and Adaptation Options. Lifuka, Ha’apai, Kingdom of Tonga. SOPAC Division Published Report 161.

Leduc, B. and ‘Otuafi, S. 2013. Assessing Vulnerability and Adaptation to Sea-Level Rise, Lifuka Island, Ha’apai, Tonga: Technical report B, 2.2: Community values and social impact analysis. Secretariat of the Pacific Community.

Parris, A., Bromirski, P., Burkett, V., Cayan, D., Culver, M., Hall, J., Horton, R., Knuuti, K., Moss, R., Obeysekera, J., Sallenger, A. and Weiss, J. 2012. Global Sea Level Rise Scenarios for the US National Climate Assessment. NOAA Tech Memo OAR CPO-1. 37 pp.

PASAP (Pacific Adaptation Strategy Assistance Program), 2011. Pacific Adaptation Strategy Assistance Program, Assessing Vulnerability and Adaptation to Sea-Level Rise Lifuka Island, Ha’apai, Tonga, project proposal.

Pearce, D. 1983. Cost Benefit Analysis, 2nd edition, Macmillan, London.

Queensland Government (2002) Guidance on the Assessment of Tangible Flood Damages, Department of Natural Resources and Mines, September.

Rios Wilks, A. 2013. Preliminary Cost Benefit Analysis of Storm Surge Hazard Mitigation in the Tuamotu Islands, French Polynesia, Secretariat of the Pacific Community report.

Sinclair, P., Singh, A., Grujovic, A., Kruger, J., Begg, Z., Holland, P. and Leduc, B. 2013a. Assessing Vulnerability and Adaptation to Sea-Level Rise Lifuka Island, Ha’apai, Tonga. Technical report B.1.6: Household Survey to Assess Vulnerabilities to Water Resources and Coastal Erosion and Inundation. Secretariat of the Pacific Community.

Sinclair, P., Singh, A., Fielea, Q., Hyland, K. and Moala, A. 2013b. Assessing Vulnerability and Adaptation to Sea-Level Rise Lifuka Island, Ha’apai, Tonga. technical report B.1.2: Groundwater Resource Assessment. Secretariat of the Pacific Community.

SPC (Secretariat of the Pacific Community), 2012. Pacific Catastrophe Risk Assessment and Financing Initiative – Better Information for Smarter Investments, available online at: http://pcrafi.sopac.org/

SPC (Secretariat of the Pacific Community) 2013. Minutes, Report of Technical Working Group Meeting #4, Assessing vulnerability and adaptation to sea level rise Lifuka Island, Ha’apai, Tonga project, 15 March 2013.

Tietenberg, T. 2000. Environmental and Natural Resource Economics (fifth ed.), Addison-Wesley Longman.

United Nations Development Programme (UNDP), 2010. A ‘No-Regrets’ Risk-Based Approach to Climate-Proofing of Public Infrastructure: Improved National and Sub-National Planning for Resilience and Sustainable Growth. July 2010. www.adaptationlearning.net

USACE (US Army Corps of Engineers), 1988. National Economic Development Procedures Manual – Urban Flood Damage, IWR Report 88-R-2, March.

USACE (US Army Corps of Engineers), 2011, Coastal Engineering Manual – Part VI, EM 1110-2-1100, U.S. Army Corps of Engineers, September.

WorleyParsons, 2013. Assessing Vulnerability and Adaptation to Sea-Level Rise Lifuka Island, Ha’apai, Tonga. Section C.2.0. Coastal Rehabilitation Lifuka Island, Tonga – Engineering Options Report. Secretariat of the Pacific Community. WorleyParsons, 2013b. Building Damage Analysis in Rangiroa following a 1 in 50 year storm surge event, report to the Secretariat of the Pacific Community, Sydney, 13 May.

http://www.cawcr.gov.au/projects/PCCSP/publications.html

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http://pcrafi.sopac.org/

http://www.adaptationlearning.net




41

8. Annex 1

The potential scale of damage threat to houses from an event could be estimated using depth-damage relationships. Depth-damage relationships are based on the assumption that water height, and its relationship to structure height, is the most important variable in determining the expected value of damage to buildings (USACE 1988). Post-flood damage surveys are the most accurate method of determining the susceptibility of the various housing types to damage from inundation (USACE 1988). Physical damage can begin when inundation reaches the lowest levels of a building, even if the flood waters are below ground level (USACE 1988).

The Queensland Government (2002) released a document: Guidance on the Assessment of Tangible Flood Damages. This document provides stage-damage curves for small (<80 m2 and/or one or two bedrooms), medium (80–140 m2 and/or three bedrooms) or large (140 m2 and/or three+ bedrooms) houses. Based on these, WorleyParsons (2013b) suggest that the depth-damage relationship based on historical data for this area would be as indicated in Figure A.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

0 5 10 15 20 25

Ove

r-flo

or d

epth

(m)

Percent Damage

Small House

Medium House

Large House

Figure A: Inundation damage based on estimated construction costs Source:WorleyParson2013b

It can be seen from this guide that after inundation depths of 1.8 m, the Queensland Government assumes that additional damage to housing will be negligible. On average, it assumes that damage will peak at around 16 or 22 per cent of the cost to replace the house. In practice, this is likely to be a substantial underestimate of damage cost for Tonga since:

o damage arises not only from inundation but also from wind (such as shearing of rooftops and walls). Damage may therefore occur even if a house is not inundated;

42

o damage may arise from rocks or debris (airborne missiles or in water) to pummel buildings and cause damage;

o for those houses that are inundated, inundation depth in Lifuka is modelled to exceed 4 m (which is higher than the house) around 50 per cent of the time in the event of a 1:100 year event. By comparison, the values provided by the Government of Queensland peak at 1.8 m;

o those houses in highly erosive zones located right on the coastline would face the brunt of the force of the waves, resulting in damage greater than that caused by inundation alone.

Nevertheless, the guide can be used to make a highly conservative estimate of damage from inundation. Using this as crudely approximate, the minimum cost of structural damage to houses in the hazard zones, based on inundation alone, would be around TOP 4.3 million (Table A), or an average of TOP 50 000 per year over a 100 year period.

Table A: Minimum cost of inundation damage to homes based on depth alone

Zone TOPHighhazardzone 3,052,331.04

Hazardzone 1,337,388.32

Total 4,389,719.36

Assessing vulnerability and adaptation to sea-level rise: Lifuka Island

Ha’apai, Tonga



Volume 2 - Cost benefit analysis

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