di Alexandra Tracy, Christine Kung Wai Loh, Kate Trumbull*
* Civic Exchange Hong Kong SAR, China

CHANGES IN SEA LEVEL, TEMPERATURES AND PRECIPTATION IN THE GREATER PRD REGION

Current and predicted effects on the Greater PRD largely reflect global trends. The Hong Kong Observatory predicts that Hong Kong’s annual mean temperature will rise by 3.5 °C by the end of this century; and that although average annual rainfall will likely increase only slightly, year-to-year variability will increase, meaning more years with either heavier than usual or less than usual rainfall [Leung, Y.K. et al, Climate forecasting: what the temperature and rainfall in Hong Kong are going to be like in 100 years - Hong Kong: Hong Kong Observatory, 2006 - 14 pp.]. The Guangdong Meteorological Bureau has also recently predicted that global warming will bring an increase in abnormally strong drought and flood conditions to the region [Quanlin, Q., Sea to "engulf Guangdong" by 2050 - China Daily, 30 August 2007 - Spencer, R., Chinese industrial expansion threatened by global warming - Telegraph.co.uk, 30 August 2007].
Rising sea levels are a matter of great concern particularly for the PRD, where both the physical geography (the Southern part of the delta lies between - 0,3 m to 0,4 m relative to mean sea level) and the urban development of the region render it extremely vulnerable. The rate and amount of sea level rise is the subject of some dispute in the scientific literature.

The most recent report, released by the Guangdong Regional Meteorological Center in August 2007, predicts that sea level will rise 30 cm by 2050 and 1,100 sq km of land will be inundated in the PRD [Quanlin, Q.- Spencer, R.]. The IPCC’s Fourth Assessment Report anticipates 40-60 cm of sea level rise and flooding up to 5,500 sq km [Parry, M.L., O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson, Eds., 2007: Cross-chapter case study. In: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press, Cambridge, UK, pp. 858-862].
Rising temperatures are likely to have a negative impact on the health of people living in the region by increasing cardio-respiratory illness and mortality, heightening the risk of mosquito-borne diseases such as malaria and dengue fever, and compounding the already high levels of air pollution by accelerating photochemical reaction rates among chemical pollutants in the atmosphere [Watson, R. et al, The Regional Impacts of Climate Change: An Assessment of Vulnerability (IPCC, 2000), 330 pp.]. One recent study in Hong Kong states that a 3 °C rise in temperature will increase the risk of a malaria epidemic by 18% and a dengue fever epidemic by 4% [Lam, K.S. et al, Impact of Global Warming to Hong Kong: Energy Consumption and Public Health - Hong Kong International Climate Change Conference 2007, May 2007].

IMPACTS ON INFRASTRUCTURE
Extreme weather events can cause extensive damage to infrastructure and other productive capacity.
The Greater PRD is already a highly developed area, with high and increasing concentrations of assets and populations in hazard prone regions. There are substantial urban development projects under way in Guangzhou, Shenzhen, Dongguan and Foshan, among others, and Macao is seeing major investments in infrastructure and leisure facilities [Enright, M. et al, The Greater Pearl River Delta - Hong Kong: Invest HK, 3rd edition, October 2005, 146 pp.]. The extent of potential damage to infrastructure and buildings in the Greater PRD due to climate-related events may therefore be significant and is likely to result in substantial financial losses. Key infrastructure at risk includes roads and railways, sea and river ports, airports, coastal defences, water supply and drainage systems, and power supply infrastructure. Cultural infrastructure such as the historic city center of Macao - a World Heritage site - could also be at risk, with a recent UNESCO study predicting serious climate change impacts for WH sites around the globe. Demonstrating their concern, Macao will host an international conference next spring on this exact topic [World Heritage Centre: World Heritage Reports No. 22 - Climate Change and World Heritage - UNESCO, May 2007].
Floods may damage building structures and cause soil erosion, which can lead to softening of building foundations. Resulting sedimentation can impact water management systems, damage buried pipes and semi-buried tanks and harm dam structures and pump equipment. Conversely, in dry periods, as soil moisture decreases, subsidence may affect underground pipes and cables. Windstorms bring additional loads to bear on buildings, affecting both structural and non-structural elements, but only minimally affecting foundations and underground elements [Freeman, P. and Warner, K., Vulnerability of infrastructure to climate variability: how does this affect lending policies? - Washington D.C., World Bank, October 2001 - Entek Uk Limited et al, London’s Warming: Impacts of Climate Change on London - London: London Climate Change Partnership, 2002 - 13 pp.].

Enormous investment is planned to develop an extended network of highways throughout the Greater PRD, some of which will involve major bridge construction projects [Etwb - Environment, Transport And Works Bureau - Government of the Hong Kong S.A.R., What’s New: Cross-Boundary Traffic, 2006]. Any infrastructure of this type will be exposed to pressures brought about by climate change. A general increase in temperature could have negative effects on elements of transportation infrastructure, which would cause disruption and require increased spending on repair and maintenance.
Storms and flooding can disrupt rail transport and temporarily close stations, as well as causing damage to infrastructure and to construction works on bridges and road developments. The underground train systems in Hong Kong, Guangzhou and Shenzhen, which are being rapidly built out at present, could be vulnerable to flooding, as well as to possible effects on tunnel structures caused by changes in groundwater such as greater hydraulic pressure on the tunnel walls [Titus, J.,Does sea level rise matter to transportation along the Atlantic coast?, in The Potential Impacts of Climate Change on Transportation: Workshop Summary and Proceedings - United States Department of Transportation, October 2002 - pp. 1-16]. Heavy rain can also cause electrical problems for rail systems: for example, in September 2006, rail services in Hong Kong were disrupted by wiring problems after heavy rain [Parwani, 2006].
The region’s sea and river ports play a vital role in the region's economy. Several container ports have recently been developed in Shenzhen. Sea level rise and associated increase in storm surge would increase the probability of inundation of wharfs and breakwaters, reducing the wharfs’ working platforms. The upper delta and western delta areas have serious silting problems that limit the operations of their ports, and for many years Hong Kong possessed the only deep-water, modern container facilities in the region. Changes in sea level are likely to alter the balance of coast and beach erosion and sedimentation around harbours and their access channels [Yang, G. and Shi, Y., Impacts of sea level rise on major projects and urban development in China’s coastal plains, Journal of Chinese Geography, Vol 6, No 4, 1996, pp. 66-74]. This could pose significant operating challenges for ports in the region and is likely to increase their operating costs for additional dredging.
Flood control and management of large rivers, as well as construction and maintenance of coastal defences, are of vital importance to China’s continuing economic development. Large-scale defensive structures, such as dykes and seawalls, as well as flood storage reservoirs and pumping stations in some urban areas, are in place throughout the Greater PRD in an effort to protect low-lying areas. Flood control on the Pearl River relies mainly on levees and reservoirs Levees along the main stream and the delta area are designed to withstand a ten - to twenty - year flood. Water resources in the Greater PRD are already under pressure due to increases in demand caused by population growth and industrialisation. Development of water and sewerage systems is not always adequate to meet these demands in certain areas, while unregulated exploitation of groundwater exacerbates problems of water quality and land subsidence. Climate change is likely to increase the stress on rivers already under pressure from salinity, over-allocation and declining water quality. Reduced rainfall would mean that less water is available for human consumption. It is likely that water treatment facilities throughout the Greater PRD would need extensive expansion and upgrading to cope with lower raw water quality. Existing drainage systems in many Greater PRD cities are inadequate. Sea level rise and tidal saltwater intrusion upstream will also cause the PRD’s natural irrigation and drainage system to lose its effectiveness. It will become more difficult to drain wastewater from cities and towns, which will increase pollution of the river network and embankment area. Salt water intrusion is also predicted to pose a serious threat to the region’s drinking water supply [Quanlin, Q. and Spencer, R.]. In addition, the present twenty-year flood frequency could decrease to a frequency of approximately five years, increasing the cost of irrigation and drainage by 15-20% [Yang, G. and Shi, Y., Impacts of sea level rise on major projects and urban development in China’s coastal plains, Journal of Chinese Geography, Vol 6, No 4, 1996, pp. 66-74]. Recent research also indicates that sea level rise will increase the probability of catastrophic events, including doubling the frequency of the 100 year flood [Wong, Agnes K.M, Lau, Alexis K.H., and Gray, Joseph P., Impact of Sea Level Rise on Storm Surge in Hong Kong and the Pearl River Delta: Hong Kong International Climate Change Conference 2007, May 2007].
Climate change could have a significant impact on the infrastructure associated with fuel distribution and electricity transmission, both by increasing demand and disrupting supply. Demand for electric power in the Greater PRD has grown enormously in the last two decades. Demand for energy is temperature-sensitive – increasingly so as greater per capita incomes in the Greater PRD increase the use of domestic air-conditioning and as industry in the region adopts sophisticated manufacturing processes that require cooling and constant temperatures. Research carried out for Hong Kong’s Environmental Protection Department in 2004 concluded that an increase in the ambient temperature of 1 ºC would increase electricity consumption by 9,02%, 3,13% and 2,64% in Hong Kong’s domestic, commercial and industrial sectors respectively [Fung W.Y, Characterising the Climate Change Impact in Hong Kong - Hong Kong: Environmental Protection Department, 2004, 132 pp.]. Electricity supply may be disrupted by damage to transmission and distribution infrastructure (power lines, pylons etc.), which can be damaged by storms or landslips following heavy rain. In addition, high temperatures degrade transmission capacity. [Allen Consulting Group, Climate Change: Risk and Vulnerability - Sydney: Australian Greenhouse Office, Department of the Environment & Heritage, 2005].
Most public power in the Greater PRD is supplied by coal-fired power plants, while generators are fuelled by diesel fuel and fuel oil. Production of energy depends on the consistent delivery of these fuels. China’s coal and oil resources are mainly located in the interior and North of the country, and Guangdong’s coal supplies are largely imported through its ports, so reliable transportation and storage infrastructure in the Greater PRD is vital to cater for the movement of these commodities [Loh, C., Energy Supply and Fuels Supply in Guangdong. Impact on Air Quality in Hong Kong and Guangdong - Hong Kong: Civic Exchange, 2006, 47 pp.]. The reliability of the ports will become an increasingly important factor in the future as emissions regulations enforce the use of cleaner fuels, which are likely to be imported from outside China. In addition, any storm or flooding events that cause roads to be impassable or transportation to be delayed could cause disruption to fuel supply and thus to power supply.
While coal and diesel/fuel oil are used to generate the bulk of Guangdong’s electricity supply, around 20% of supply is derived through hydro power. Hydro-electric dams are also considered to be vulnerable to climate change events. On the one hand, reduction of water flow in rivers during dry years could reduce the amount of power that can be generated. The risks of climate change impacts to the region’s physical infrastructure outlined above appear to have been inadequately considered by the authorities and investors, if at all.

ECONOMIC IMPACT
The analysis of the costs and economic impact of projected climate change is at an early stage. As climate change study becomes more advanced, the science of environmental economics is attempting to address this issue. A number of frameworks for examining the impacts of climate change have been proposed and a great deal of work is under way to establish modelling techniques that can measure the impacts at different geographical levels and in economic, environmental and human terms. One of the greatest challenges involved in this analysis is to attempt to quantify the impacts of climate change on “non-economic” assets, such ecosystems or community well-being.
The Stern Review released in 2006 provides the best estimate to date of the economic costs of climate change worldwide, based on a wide range of evidence and using a number of techniques to assess costs and risks. The Review’s sobering conclusion is that “if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever”, and that “if a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more” [Stern, N., Stern Review on the Economics of Climate Change, November 2006].
In economic terms, climate change acts as an external “shock” to the economic systems, which can be examined in terms of hypothetical costs if individuals, companies and governments take no action to avoid or reduce the costs associated with that shock; or costs in the more likely situation where action is taken to avoid at least some part of these costs by mitigating the size of the shock itself or by adapting to the shock as efficiently as possible [Marsden Jacob Associates, Economic Issues Relevant to Costing Climate Change Impacts - Sydney: Australian Greenhouse Office, Department of the Environment & Heritage, 2004, 61 pp.]
The PRD Economic Zone (“PRDEZ”), which is formed by the cities of Guangzhou, Shenzhen, Foshan, Zhuhai, Jiangmen, Zhongshan, Dongguan, four districts and counties of Huizhou and four districts and counties of Zhaoqing, has been the most dynamic regional economy in China since the launch of China’s reform programme in 1979. According to the World Bank, recent estimates indicate that sea level rise of 1-5 m would reduce China’s GDP by 2,4-10,8% [Buys, P. et al, Sea level rise from global warming: potential impact on developing countries, World Bank, forthcoming. Quoted in Brahmbhatt, Milan et al, Special Focus. Climate Change and East Asia: Challenges and Opportunities, World Bank, March 2006, 9 pp.]. It is not clear what this would imply for the Greater PRD region, which is an enormous contributor to the country’s GDP. Average growth in the PRDEZ over the last 25 years was over 16%, compared to a national figure of 9,5%, and GDP in the zone alone in 2004 was approximately 9,9% of China’s total GDP [Enright, M. et al, The Greater Pearl River Delta - Hong Kong: InvestHK, 3rd edition, October 2005, 146 pp.]. Management of severe flooding events, caused by a combination of sea level rise and storm surge, and occurring more frequently in future decades, would require significant financial resources. It is likely that government will bear the greatest part of the responsibility for many aspects of preparation and response, such as monitoring and public warning system, emergency response and evacuation of the public, cleaning-up operations, repair and replacement of public infrastructure, and economic assistance to communities and businesses. While some funding for these activities may be drawn from the central government’s budget, much of it is likely to come from local government funds. The necessary allocation to disaster management of capital that would otherwise have been invested in activities more directly related to economic activity, such as improved transportation infrastructure, technology or workforce training, may have an adverse effect on the level of economic growth in the region. Greatly increased coastal and river defences will be required to protect the existing settlements of the Greater PRD from increased flooding due to sea level rise. One estimate suggested that engineering work needed to raise the design standard of 95 key defences in the delta to meet a 30 cm sea level rise would require 17,5 million m3 of soil and stone. Based on the price in 1998, the cost of this work – a fraction of the total infrastructure requirement - would be RMB 2,103 million (US$ 262,9 million) [Huang, Z. et al, Coastal inundation due to sea level rise in the Pearl River Delta, China, Natural Hazards 33, 2004, pp. 247-264.]. Electricity supply problems already hamper business operations in the PRD. For example, in the first quarter of 2005, Guangzhou reported acute power shortages when power had to be restricted in specific areas on 716 occasions. Those periods cost the city RMB 10 billion (nearly US$ 1,3 billion) in industrial output [Loh, C., Energy Supply and Fuels Supply in Guangdong. Impact on Air Quality in Hong Kong and Guangdong - Hong Kong: Civic Exchange, 2006, 47 pp]. More frequent interruptions to power supply caused by damage to transmission lines or delays to fuel delivery could slow production and lower output even more seriously. Greater pressures on the financial resources of the government at provincial or municipal level are likely to lead to increased taxation, even if central government is willing to assist financially. This burden is likely to be heaviest on businesses and could include direct levies for flood control projects, as contemplated in Article 51 of the national Law of Flood Control (1997). Loss of supply chain orders, lower turnover and higher business costs would generate less attractive returns to shareholders, which may decrease investor appetite for the region. It is likely that a sizeable reduction in foreign direct investment (“FDI”) would significantly inhibit the region’s ability to maintain the pace of industrial development and consequent economic growth, as well as reducing technology transfer by foreign investors. The Greater PRD is also the source of investment for other regions in China, as well as providing employment for large numbers of workers who are able to send money to their families elsewhere in the country; an important market for capital goods and materials from other parts of China; and an important gateway to China. A serious economic slow-down in the Greater PRD would have far-reaching implications for the country as a whole.

ADAPTATION AND MITIGATION
A concerted and widespread effort to reduce greenhouse gas emissions provides the best hope for mitigating potentially disastrous effects. That said, the length of time that it takes for existing greenhouse gas concentrations to be reabsorbed by the Earth’s natural systems means the world is already going to experience some level of change. Therefore, it is necessary to devise an adaptation strategy to increase the resilience of natural, human and economic systems to possible climate change effects and to reduce the level of damage that might otherwise occur. There is a need for such strategies to be developed to protect the economy and communities of the Greater PRD. Key policy areas include urban planning, water resource management, flood management systems, coastal and river defence, and long-term land use planning.
A comprehensive mitigation strategy will require action across all sectors; however energy efficiency measures should be pursued more aggressively as a matter of priority. Such measures offer an opportunity to meet growing demand for energy services while reducing CO2 emissions, saving energy costs, and reducing local air pollution. Policies that should be pursued in this area include allowing utilities to profit from electricity saved as well as electricity generated (selling “negwatts”) [Lovins, A. Negawatts and Sowbellies, Rocky Mountain Institute, 2006]; encouraging upgrades to more energy-efficient technology in the industrial and transport sectors, and implementing demand-side management. Showing some progress, in its latest negotiations the Hong Kong government plans to link power companies’ rates of return with their achievement of emissions reduction targets for certain pollutants [Tsang, Donald, Speech at Hong Kong International Conference on Climate Change, 31 May 2007]. In their Fourth Assessment Report, the Nobel Prize winning-IPCC has highlighted megadeltas like the PRD as “hotspots” for vulnerability to climate change. They have predicted that salt water intrusion, damage from storm surges, and flooding will all have major impacts on the region [IPCC FAR, 858-862]. It is clear that policy makers and businesses in the Greater PRD must start to incorporate climate change risk into all long-term policies, infrastructure projects, business plans and strategic investments. Around the world, decision makers are beginning to realise that they must be proactive rather than reactive in order to meet the challenge of climate change.