A Risk Cost-Benefit Analysis Framework Under Climate Change-Related Disasters

The paper aimed to measure the benefits of sea dike construction in the Mekong Delta. A risk cost-benefit analysis framework was developed to evaluate benefits or losses avoided of flood, storm, and salinity intrusion by climate change’s impact. The study specified probability distribution functions in simulation process to incorporate these risk factors into the analysis. There were five dike options associated with three hypotheses of the scales of sea dike systems that were small, medium, and large ones proposed for the selection. The results showed that the benefits of storm and flood avoided dominated in dike options. Based on the NPV decision rule, the results indicated that large dike options are preferred. It showed evidences to support the necessity to have a concrete sea dike system for the Mekong Delta in the context of global climate change.