Flood risk management under climate change: a hydro-economic perspective

Most developing countries, like Nepal, are expected to experience the greatest impact of climate change (CC) sooner and on a greater magnitude than other developed countries. Increase in the magnitude and frequency of extreme rainfall events is likely to increase the risk of flooding in rivers. The West Rapti River basin is one of the most flood prone and also one of the most dynamic and economically important basins of Nepal. This study elicits the willingness to pay (WTP) from the local people in the basin to reduce risks from possible floods due to CC. The WTP for flood mitigation in different flood hazard zones and flood scenarios were determined using referendum method and a face to face questionnaire survey. From a total of 720 households across all flood zones, a stratified randomly selected sample of 210 households was surveyed. The sample included households from a range of socio-economic backgrounds. The average WTP varied by flood hazard zone and within each zone, by CC-induced flood scenarios. The average WTP of respondents was highest for the critical flood prone zone, followed by moderate and low flood prone zones. Similarly, within each zone, the average WTP increased with increasing flood magnitudes due to CC. The variation of average WTP of respondents in different flood prone zones and scenarios indicate different levels of perceived severity. Moreover, the introduction of the concept of 'man-day' or 'labour-day' in WTP research is a novel and applicable methodological approach, particularly in the South Asian region. The findings of this study are useful for policy implications for the design of participatory flood management plans in the river basin.