ABSTRACT
Vietnam is located in the tropical monsoon region and is directly affected by storms in the Asia Pacific. It was also one of the ten countries most negatively affected by climate risk between 1994 and 2013 (Germanwatch, 2013). Among the many natural disaster risks in Vietnam, floods are the most frequent, and these are increasing in intensity because of the influence of global climate change (IPCC, 2007). According to statistical data from the Centre for Research on the Epidemiology of Disasters (CRED, 2012), during 1984-2012 Vietnam experienced 65 floods, which killed 4,702 people and caused damage, mainly to property and agricultural production, estimated at USD 3.67 billion. Most households have had great difficulty in recovering, in part because of their limited financial resources. Although a significant budget has been allocated by government to help affected households after floods, it is not enough to overcome all the consequences (MoNRE, 2009), meaning that the government cannot depend on this strategy to mitigate flood damage in the context of climate change. One possible solution could be for policymakers to establish a market-based economic tool that encourages behavioural change to minimise the vulnerability of communities and which delivers additional resources to improve household resilience in the event of a flood.
