Micro business participation in collective flood adaptation: Lessons from scenario-based analysis in Ho Chi Minh City, Vietnam

Abstract

Although research on the impacts of climate change on small- and medium-sized firms (SMEs) and their adaptive behavior against climate change risks recently have received more attention, the focus on micro and household businesses is still very limited. Micro and household businesses are adversely impacted by compound flooding events – a situation that will become even more acute in the future – but there is little attention in scientific literature on their possibilities of adaptation and actual implementation.

Against this backdrop, the paper will analyse the following research questions: How do micro firms already respond to flooding? Are micro firms willing to invest jointly into future proactive adaptation efforts in their neighborhood? What are key drivers and barriers for adaptation? Specifically, we evaluate a set of adaptation measures at the neighborhood scale, and then examine key driver and barriers for collective adaptation of micro businesses by using scenario-based field experiments. We examine the willingness of micro businesses to invest in collective adaptation options depending on different financing options. We offer an empirical analysis on micro businesses in Ho Chi Minh City (HCMC), a city increasingly threatened by flooding and where climate change hazards are on the rise. In HCMC formal – and informal – micro businesses make up a large majority of SMEs.