Many of the world's largest coastal cities are becoming increasingly vulnerable to extreme events due to their growing populations and infrastructure, the changing climate, and subsidence. This paper assessed the economic impacts of extreme climatic events including sea-level rise and storm surge risk and the benefits of the adaptation strategies in the Pearl River Delta, a lowing-lying area located in southern China. An economic benefit–cost model was established for the estimation of the impacts and benefits. The damage of the extreme events was calculated using the damage rate modeled from the historic disaster database, and then the difference between the damage and the cost of heightening dikes was investigated under different scenarios. The results showed that the damage rate and storm surge level were positively related. The adaptation strategies benefited when the dike was heightened by 1.43–12.67 m, with the optimum reached at 5.15 m, and the dike did not exceed 12.67 m. The maximum benefits were obtained when the dike was designed to defend a 20-year return period storm surge in 2100, and the minimum when the dike is heightened to defend a 100-year return period storm surge in 2100.

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