Adapting to Sea Level Rise
Attributes
Medium: Land
Country: Indonesia
Analytical Framework(s): Economic Analysis
Study Date: 2008
Publication Date: 2009
Major Result(s)
| Resource/Environmental Good | IDR, thousand currency units (2008) |
IDR, thousand currency units (2014)1 |
USD, thousand currency units (2014)2 |
|---|---|---|---|
| Agricultural loss from a 0.5m SLR3 | 630,260.00 | 839,229.01 | 68.24 |
| Agricultural loss from a 1m SLR | 729,420.00 | 971,266.50 | 78.98 |
| total incremental benefit from farm-dike establishment | 50,449,600.00 | 67,176,669.38 | 5,462.63 |
| total incremental benefit from relocation to new agricultural areas | 17,306,600.00 | 23,044,776.30 | 1,873.94 |
| total incremental costs from farm-dike establishment | 355,580.00 | 473,476.10 | 38.50 |
| total incremental costs from relocation to new agricultural areas | 18,717,300.00 | 24,923,207.99 | 2,026.69 |
About the Inflation Adjustment: Prices in Indonesia (IDR) changed by 33.16% from 2008 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.33 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: The general objective of this research was to predict the economic impacts of adaptation strategies in agriculture in response to SLR in the Province of South Kalimantan, Indonesia. The specific objectives were: 1. To determine the level of awareness of farmers of the issue of SLR and its effects on their agricultural lands. 2. To predict the agricultural losses that will result from a SLR of one meter if no adaptation is done. 3. To estimate the costs and benefits of the protection of agricultural areas in coastal areas through farm-dike establishmentl; and 4. To estimate the costs and benefits of the establishment of new agricultural areas inland.
Study Details
Summary: The economic importance of the Indonesian coast is significant as a large tidal swampland near the coastal areas has been reclaimed for agricultural purposes. Twenty-five years of swamp reclamation has succeeded in 89,036 ha of swampland in the province of South Kalimantan being reclaimed for agriculture, mainly of rice. These new agricultural areas are now, however, at risk due to sea level rise (SLR). A household survey was carried out to determine the awareness level of farmers of SLR and its effect on the agricultural lands. Out of the total number of 1,222 respondents, only 35% understood SLR and its effects on their rice fields. This indicates a strong need for information dissemination on the SLR issue to farmers in the coastal areas. The geographic information system (GIS) was employed to predict agricultural loss caused by a 0.5-1.0 m SLR. Out of the 13 regencies in South Kalimantan Province, six regencies--Banjar, Banjarmasin, Barito Kuala, Kotabaru, Tanah Bumbu, and Tanah Laut--had agricultural areas that were impacted by SLR. The results of the analysis also revealed that Barito Kuala would experience the largest loss in agricultural production from just a 0.5-m SLR, amounting to IDR 630.26 billion. Another objective of this research was to conduct economic assessments of agricultural adaptation to SLR in South Kalimantan Province, namely the construction of farm dikes and establishing new agricultural areas. The results of the cost-benefit analysis showed that farm-dike installation had positive net present values (NPVs) while the establishment of new agricultural areas produced negative NPVs. This implies that farm-dike establishment is more a worthwhile adaptation strategy for agriculture in response to a SLR of one meter compared to the establishment of new agricultural areas.
Site Characteristics: The province of South Kalimantan lies in the island of Kalimantan (Borneo) with an area of 3,766,000 ha, situated between latitude 1°21'south to 4°10' south and longitude 114°19' east to 116°33' east. Lowland areas in this province account for 1,140,140 ha, with 763,207 ha potentially available for agricultural reclamation. The province is surrounded by the provinces of East Kalimantan and part of Central Kalimantan in the north, the Java Sea in the south, the province of Central Kalimantan in the west, and the Makassar Straits in the east
Comments: A Cost-Benefit Analysis (CBA) was employed in this study to assess the economic viability of farm-dike establishment to protect agricultural areas from SLR impacts. From an economic perspective, the assessment of this investment was conducted for reclaimed agricultural areas with and without farm-dike establishment to reflect the true welfare change attributable to the proposed farm-dike establishment project.