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Integrating distributional objectives in the cost:benefit analysis of adaptation options


In adopting measures to adapt to climate change, adaptation options need to be based on robust assessment approaches which allow for the allocation of scarce resources. An important part of this process involves determining the costs and benefits of adaptation options in order to reduce vulnerability, enhance adaptive capacity and build resilience.

Applying alternative discounting rules: The equivalency principle


Discounting is especially relevant in the context of climate change as it requires addressing long term and intertemporal decision-making. From an economic perspective, intertemporal choices have been assessed during the last 80 years using the discounted utility model, formulated by Samuelson (1937). The discounted utility model is based on the assumption that people make decisions by assessing its (positive or negative) consequences in a similar way to how the market evaluates gains and losses.

Private adaptation of adaptation goods: potential and policy instruments


Much focus in policy emphasises the role of the public sector in delivering adaptation action (Osberghaus et al., 2010). Nevertheless, in liberal economies, private actors strongly influence decision-making in many economic sectors. Private actors are economic agents, i.e. individuals, non-governmental organisations and businesses as varied as manufacturers, landowners, insurances and water service companies.

Uncertainties and causes of uncertainties in climate change adaptation


Uncertainty is a state of having limited knowledge where it is impossible to exactly describe existing state or future outcome (Hubbard, 2014). It applies to predictions of future events, to physical measurements already made, or to the unknown. The IPCC glossary of Working Group II defines uncertainty as a state of incomplete knowledge that can result from a lack of information or from disagreement about what is known or even knowable.

Cost-Effectiveness Analysis

What does Cost-Effectiveness Analysis do?

Cost-effectiveness analysis is a methodology used to compare different options aiming to achieve similar outcomes. It is particularly attractive in the adaptation context because it allows for benefits to be valued in non-monetary terms, opting for quantification in physical terms instead.