The Global Impacts of Extreme Sea-Level Rise: A Comprehensive Economic Assessment

This paper investigates the world-wide economic cost of rapid sea-level rise of the kind that could be caused by accelerated ice flow from the West Antarctic and/or the Greenland ice sheets. Such an event would have direct impacts on economic activities located near the coastline and indirect impacts further inland. Using data from the DIVA model on sea floods, river floods, land loss, salinisation and forced migration, we analyse the effects of these damages in a computable general equilibrium model for 25 world regions. We consider three sea-level rise scenarios that correspond to 0.47, 1.12 and 1.75 m by the 2080s. By incorporating a wider range of damage categories, implemented in an economy-wide framework and including very rapid sea-level rise, the study offers a new contribution to climate change impact studies. We find that the loss of GDP worldwide is 0.5 % in the highest sea-level rise scenario, with a loss of welfare (equivalent variation) of almost 2 % world-wide. Within these aggregates, there are large regional disparities, with the Central Europe North region and parts of South-East Asia and South Asia being especially prone to high costs (welfare losses in the range of 4-12 %). The analysis assumes that there is not public adaptation, which would substantially lower the costs. In this way, the analysis demonstrates what is at risk, and could be used to justify adaptation expenses.