Abstract
In this paper, we developed an integrated methodology for assessing asset damage, production capacity loss, and inter-sector ripple loss using the depth-damage curve, Cobb-Douglas production function and Input-Output model. We applied this methodology to the detailed individual manufacturing firms in Shanghai under an extreme storm floods scenario to simulate the disaster impact propagation from local individual firms to the entire industrial system and comprehensively estimate the resulting economic losses and their spatial distribution. Our results show that given no floodwall protection, a 1000-year storm flood scenario would cause direct asset damage of US $21 billion to the Shanghai manufacturing industry, including fixed asset damage of US $12 billion and inventory damage of US $9 billion. Due to the shortage of input productive factors of asset and labor, it would further lead to production capacity loss of US $24 billion. In addition, affected manufacturing industry would indirectly result in ripple loss of US $60 billion among dependent sectors, which has a significant amplifier effect. Our results have important implications for reasonable cost-benefit analysis of structural flood control measures in coastal areas, as well as for manufacturing firm location planning and resilience strategy decision-making.
Highlights
In recent years, many cities have been severely affected by extreme floods, such as the river flooding in Thailand in 2011 [1], the storm flooding in New York and New Jersey in 2012 caused by Hurricane Sandy [2], the flooding along the Elbe in Germany in 2013 [3], and the storm flooding in Houston in 2017 by Harvey [4]
More frequent extreme storm floods are expected to occur in this city due to the combined effects of increased tropical cyclone intensities with global warming and the acceleration of sea level rises [7,8], severe land subsidence resulting from rapid urbanization, and the drastic transformation of the underwater terrain in the Yangtze River estuary attributed to large-scale construction projects [9,10,11]
Annual gross output, fixed asset, inventory and number of employees in the towns where major industrial development zones lie are computed to be about 78.7%, 67.4%, 62.8% and 48.9% of the total manufacturing industry, respectively
Summary
Many cities have been severely affected by extreme floods, such as the river flooding in Thailand in 2011 [1], the storm flooding in New York and New Jersey in 2012 caused by Hurricane Sandy [2], the flooding along the Elbe in Germany in 2013 [3], and the storm flooding in Houston in 2017 by Harvey [4]. More frequent extreme storm floods are expected to occur in this city due to the combined effects of increased tropical cyclone intensities with global warming and the acceleration of sea level rises [7,8], severe land subsidence resulting from rapid urbanization, and the drastic transformation of the underwater terrain in the Yangtze River estuary attributed to large-scale construction projects [9,10,11]. Because of the strong linkage of the manufacturing industry, if affected by extreme storm floods, the damaged firms in Shanghai would trigger serious system-wide indirect losses and impacts in the local region, the entirety of China, and the world. Effectively assessing the manufacturing industry’s potential economic losses/risk and to improving its adaptability/resilience to extreme storm floods are becoming urgent issues in the context of global climate change
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