North African Countries

land. The rent-to-price ratio of land was assumed to be 8 percent, with rents increasing by 8 percent and 5 percent for urban and rural land, respectively. To account for agglomeration effects in coastal regions, average urbanization rates as estimated by the United Nations (UN) for the 30 years were used. Finally, a standard rate of 3 percent was used for discounting future rents forgone by erosion of coastal areas.

The distinction between land prices due to location necessitates the classification of eroded land by land use. The ESA’s Global Land Cover database was used to determine the share of urban areas on the total coastline (shown in table 5.1). 5 More than 15 percent of Tunisia’s coasts and 14.5 percent of Algeria’s coasts are urbanized. This share is lower in the other countries: 7 percent in Libya and 6.6 percent in Morocco.6

To estimate the value of built housing assets destroyed per year, the estimated average replacement costs of buildings in coastal districts were adapted from data for 12 Middle East and North Africa economies (Dabbeek and Silva 2020). The numbers of dwellings, buildings, and population are downscaled to a fine grid (1 square kilometer) to estimate the economic value based on geographical location and physical characteristics. Aggregating these data for coastal districts in the four countries being considered here enables an estimate of the value of assets lost because of coastal erosion. 7

The land and built-asset destruction costs of coastal erosion in these four Maghreb countries are high, especially in Tunisia. They range from US$273 million per year in Libya to more than US$1.1 billion per year in Tunisia (table 5.3). Annual losses are equivalent to about 0.2 percent of GDP in Algeria, 0.4 percent in Morocco, 0.7 percent in Libya, and 2.8 percent in Tunisia.

The estimates are conservative; they do not take into account losses in adjacent properties. Near-shore properties derive part of their value from their proximity to the sea and hence may be affected indirectly; their

TABLE 5.3

Direct Economic Costs of Coastal Erosion in Selected North African Countries

Cost metric Buildings lost (US$, millions) Land lost (US$, millions) Total losses (US$, millions) Total losses (% of GDP) Algeria Libya Morocco Tunisia 3 1 8 29

310 313 0.2 272 273 0.7 425 434 0.4 1,078 1,107 2.8

Source: Heger and Vashold 2021. Note: The building-loss estimates are based on the replacement costs of dwellings and other buildings and do not take damages to infrastructure or reductions in value of undestroyed buildings and land explicitly into account. Values are averages computed using the average erosion rates shown in table 5.1.

value will be reduced even if erosive forces do not directly destroy them (Fraser and Spencer 1998; Pompe and Rinehart 1995; Scott, Simpson, and Sim 2012). The negative effect of beach retreat on property values diminishes with distance, implying that properties near but not necessarily bordering the shore can be affected through negative spillover effects arising from erosion (Rinehart and Pompe 1994). These effects are not included in the estimates of direct costs; hence, the estimates should be viewed as rather conservative assessments of the overall costs due to coastal erosion in the countries discussed in this section.

The effects on developments such as ports or industrial sites as well as on ecosystems are substantial but hard to quantify. The analysis above does not capture these specific effects, which would require detailed modeling of effects and costs of coastal erosion linked to these developments—a task that is hardly possible at a national or regional scale.

SLR and greater frequency of extreme weather events driven by climate change will increase coastal erosion and its costs. Coastal flooding is exacerbated by shoreline retreat and causes significant losses for major cities in the Middle East and North Africa, increased by socioeconomic changes. For example, in Alexandria, a projected SLR of 20–40 centimeters, subsidence, and measures to keep the flooding probability constant could lead to annual losses of US$504–US$581 million in 2050 because of coastal floods (Hallegatte et al. 2013).

Lost Tourism Revenue from Coastal Areas

Coastal erosion is an existential threat to tourism, a sector that contributes significantly to GDP in many Middle East and North Africa economies. Probably the largest share of the costs of coastal erosion, especially in the long term, will be indirect by reducing revenues resulting from tourism in affected areas.8 Forgone revenues from tourism are a severe threat, especially for countries where “blue” tourism represents a large part of their revenues.

As noted earlier, the tourism sector accounts for more than 10 percent of GDP In several of the region’s economies (Heger and Vashold 2021). For example, Morocco and especially Tunisia depend heavily on tourism, which in turn largely depends on their beaches. In Morocco, over 12 million international visitors were recorded in 2018, with receipts totaling more than US$9.5 billion (around 8 percent of GDP), according to data from the UN World Tourism Organization (UNWTO 2019), and tourism activities account for more than half of the country’s export services. Considering indirect economic impacts as well, tourism accounted for 18.6 percent of Morocco’s GDP in 2017 and 16.4 percent of employment (Kasmi et al. 2020).

In Tunisia, tourism-related activity accounted for 14.2 percent of GDP in 2018 and employed more than 2 million (Saidani 2019). International tourists alone contributed over US$2.3 billion to the economy, representing around 6 percent of GDP in 2018 (based on UNWTO data). Given that more than 90 percent of the country’s recorded tourist bed nights were spent in coastal areas (Jeffrey and Bleasdale 2017), the economic threat posed by the disappearance of beaches due to coastal erosion should be recognized.

Beachgoer Surveys: Willingness to Return, Willingness to Pay

Coastal erosion would discourage tourists from visiting the region’s coasts. International evidence, whereby tourists are asked whether they would return to an area if the coast were eroded, shows that coastal erosion significantly affects tourism. However, the propensity of tourists to visit a certain location does not decrease in a linear fashion with advancing beach retreat. For example, in a survey carried out at beaches in the US state of Delaware, around two-thirds of visitors stated that a reduction of a beach’s width to a quarter of its current size would worsen their experience, and one-third indicated that they would reduce their number of visits (Parsons et al. 2013). For California beaches narrower than 20 meters, a reduction in width is associated with much larger decreases in the propensity of recreational visitors to come back than when initial beach width is larger than 20 meters (Pendleton et al. 2012). In Barbados, tourists’ aversion to returning is especially strong if beaches are less than 8–10 meters wide (Schuhmann et al. 2016). A similar nonlinear relation can be found regarding the speed of erosion, where surveys reveal that faster beach retreat led to a disproportionate reduction in consumer surplus, and hence propensity to revisit, compared with slower retreat (Huang et al. 2011).

In the extreme case, disappearance of beaches could lead to total losses if tourists decide not to visit the affected areas anymore, as several surveys showed:

• Most respondents to a survey conducted in a Hawaiian town stated that they would not consider staying in a hotel should the nearby beach completely erode (Tarui, Peng, and Eversole 2018). • More than three-quarters of surveyed tourists in Barbados were unwilling to return for the same price should beaches largely disappear; this was associated with a 46 percent decrease in tourism revenues (Schuhmann et al. 2016). • Along two stretches of the Australian coast, large shares (exceeding 50 percent) of surveyed tourists stated that major erosion events would