# **5 Summary and discussion**

## **5.1 Summary**

In this working paper, we presented a new quantitative risk assessment framework that evaluates (i) climate-induced asset risk to housing, infrastructure and agriculture, (ii) cascading service disruption risk caused by critical infrastructure failures, (iii) the exposure of households that suffer from multidimensional poverty (MDP) and (iv) the temporary incidence of MDP as a result of critical infrastructure service disruptions. We employ this risk assessment framework to explore the wider benefit of climate adaptation (through embankment improvement programs) in terms of their economic performance, through cost-benefit analysis, and in terms of their contribution towards equity-related objectives, more specifically their effectiveness at alleviating climate-induced MDP. We applied this framework to the highly vulnerable coastal zone of Bangladesh, utilizing a newly developed synthetic household dataset. The framework is designed to be generic and adaptable to other geographies where similar datasets are available.

Asset risk at present as a result of flooding is estimated to be 483 USD million, which is projected to increase up to 750 USD million in 2050 due to climate change alone, not accounting for socioeconomic projections. Extreme winds can add an additional 414 USD million to this risk, which can increase 53% in the future because of climate change. Note that we do not account for non-linear effects (e.g. compound flood-wind events).

As a result of flooding of critical infrastructure assets (which includes hospitals, health and education, electricity substations, WASH infrastructure and housing), households face, on average, a service disruption risk of 2 days per year, which can increase to 4.5 days per year by 2050. In four districts, the future service disruption risk is more than 6 days per year.

At present, 25.8% of the coastal population is exposed to flooding (100-year event), which can increase to 33.2% in 2050. Of the exposed population, 33.1% – 39.5% of households face moderate MDP, while 9.4% – 13.8% faces extreme MDP, depending on the flood severity, which is higher than the baseline MDP incidence of 28.1% (moderate) and 7.2% (extreme), respectively. As such, MDP households are disproportionately exposed, and exposure bias of 1.17 – 1.92, with higher exposure bias for lower flood return periods and more extreme MDP. In other words, the most deprived households live in the most at-risk areas in the coastal zone.

The combination of direct household exposure (that is, households are flooded) and infrastructure exposed (that is, infrastructure households depend on are flooded) can result in temporary poverty incidence. For instance, under a 25-year flood event, the incidence of extreme MDP increases by 25.5% (52.7%) after 30 days and 1.9% (4.7%) after 120 days under the present-day (climate change) scenario, while under a 100-year flood event the incidence of extreme MDP increases by 93.8% (153.9%) after 30 days, and 10.4% (20.9%) after 120 days under the present-day (climate change) scenario. As such, climate change alone can double the number of households being pushed temporarily into poverty on various time scales.

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