Ministry of Tourism ECONOMIC COSTS AND BENEFITS OF CLIMATE CHANGE IMPACTS AND ADAPTATION TO THE MALDIVES TOURISM INDUSTRY Increasing Climate Change Resilience of Maldives through Adaptation in the Tourism Sector TOURISM ADAPTATION PROJECT (TAP) AUTHORS Heather Hosterman Joel Smith CONSULTANT Stratus Consulting Inc. Copyright © 2015 Ministry of Tourism Economic Costs and Benefits of Climate Change Impacts and Adaptation to the Maldives Tourism Industry ISBN 178-LBK/2015/074 Published by: Ministry of Tourism, Male’, Republic of Maldives All rights reserved. The document or extracts from this publication may, however, be freely reviewed, quoted, reproduced or translated, in part or in full, provided the source is given due acknowledgement. The views expressed in this publication are those of the author(s) and do not necessarily represent those of the Ministry of Tourism, Maldives. Cover Photo By: Abdulla Adam A traditional Maldivian boat known as a dhoani transports holidaymakers and locals to the deserted island of H.Dh Kunburudhoo for a day picnic. Ferry boats are an economical means to travel to the local islands. Printed by: M7 Print Pvt Ltd Male’, Maldives Contents List of Acronyms and Abbreviations ......................................................................................... xi Executive Summary ................................................................................................................... S-1 Chapter 1 Introduction ........................................................................................................ 1-1 1.1 Central Authors and Audience ............................................................................. 1-1 Section I: Overview Chapter 2 The Economy and Tourism in the Maldives ................................................... 2-1 2.1 The Maldives ....................................................................................................... 2-1 2.2 Tourism in the Maldives ...................................................................................... 2-2 Chapter 3 Non-climate Influences and Climate Changes in the Maldives ..................... 3-1 3.1 Non-climate Influences ........................................................................................ 3-1 3.1.1 Land use and coastal erosion ................................................................... 3-1 3.1.2 Waste management .................................................................................. 3-2 3.1.3 Freshwater supply .................................................................................... 3-3 3.1.4 Biodiversity loss....................................................................................... 3-4 3.2 Changes to Climate in the Maldives .................................................................... 3-5 3.2.1 Climate scenarios ..................................................................................... 3-5 3.2.2 Projected climate change ......................................................................... 3-6 Chapter 4 Economic Effects of Climate Change on Tourism .......................................... 4-1 4.1 Losses in Tourism Expenditures from Rising Temperatures ............................... 4-1 4.2 Losses in Tourist Satisfaction from Increased Coral Reef Bleaching ................. 4-3 SC13668 Stratus Consulting Contents Section II: Adaptation Analysis Chapter 5 Approach ............................................................................................................ 5-1 5.1 Desktop Review ................................................................................................... 5-1 5.2 Field Mission ....................................................................................................... 5-1 5.2.1 Initial screening of adaptation options ..................................................... 5-2 5.2.2 Focused evaluation of adaptation options ................................................ 5-3 5.3 Supplementary Data Collection ........................................................................... 5-4 5.4 Analyses ............................................................................................................... 5-5 5.4.1 Multi-criteria analysis .............................................................................. 5-5 5.4.2 Benefit-cost analysis ................................................................................ 5-6 5.5 Limitations of the Study....................................................................................... 5-8 Chapter 6 Multi-criteria Analysis....................................................................................... 6-1 6.1 Protection ............................................................................................................. 6-2 6.1.1 Coastal vegetation buffer ......................................................................... 6-2 6.1.2 Coral reef protection ................................................................................ 6-6 6.1.3 Artificial coral reefs ............................................................................... 6-10 6.1.4 Beach nourishment................................................................................. 6-13 6.1.5 Land reclamation ................................................................................... 6-17 6.1.6 Seawalls ................................................................................................. 6-21 6.2 Accommodation ................................................................................................. 6-26 6.2.1 Elevated structures ................................................................................. 6-26 6.3 Managed Retreat ................................................................................................ 6-30 6.3.1 Land-use setbacks .................................................................................. 6-31 6.4 MCA Results and Concluding Thoughts ........................................................... 6-34 Chapter 7 Benefit-cost Analysis .......................................................................................... 7-1 7.1 Previous Benefit-cost Analyses ........................................................................... 7-1 7.2 Holiday Inn Resort Kandooma Benefit-cost Analysis ......................................... 7-5 7.2.1 Hazard assessment ................................................................................... 7-5 7.2.2 Impact assessment .................................................................................... 7-6 7.2.3 Adaptation option, costs, and benefits ..................................................... 7-7 7.2.4 Findings.................................................................................................... 7-8 7.2.5 Sensitivity analysis................................................................................. 7-13 7.3 BCA Results and Concluding Thoughts ............................................................ 7-17 Page vi SC13668 Stratus Consulting Contents Chapter 8 Policy Recommendations................................................................................... 8-1 8.1 Promote Soft Adaptation Options ........................................................................ 8-1 8.1.1 Raise awareness to link healthy ecosystems and climate change resilience ...................................................................................... 8-1 8.1.2 Enforce existing conservation laws and regulations ................................ 8-2 8.1.3 Value natural resources in planning and decision-making ...................... 8-2 8.2 Mainstream Adaptation into Planning and Decision-making .............................. 8-3 8.2.1 Incorporate adaptation in strategic national planning and development ...................................................................................... 8-3 8.2.2 Incorporate adaptation in local planning and development ..................... 8-3 8.2.3 Enhance government coordination .......................................................... 8-4 8.3 Promote Dual-benefit Solutions ........................................................................... 8-4 8.3.1 Improved waste management .................................................................. 8-4 8.3.2 Improved water supply ............................................................................ 8-5 Chapter 9 Conclusion and Next Steps ................................................................................ 9-1 References .................................................................................................................................. R-1 Appendices A Project Team Members B Stakeholder Questionnaire C Email Survey Instrument D Public and Private Sector Stakeholders Page vii SC13668 Acronyms and Abbreviations BCA benefit-cost analysis BCR benefit-cost ratio EIA Environmental Impact Assessment GCM global climate model GDP gross domestic product GEF Global Environment Facility IPCC Intergovernmental Panel on Climate Change IPRC International Pacific Research Center MCA multi-criteria analysis MPA Marine Protected Area MTAC Ministry of Tourism, Arts and Culture MTD metric tons per day MVR Maldives Rufiyaa NPV net present value RCM regional climate model RIMES Regional Integrated Multi-Hazard Early Warning System SIP Safer Islands Program SRES Special Report on Emissions Scenarios TAP Tourism Adaptation Project UNDP United Nations Development