As it becomes increasingly obvious that we must develop effective adaptation responses to likely temperature increases of 3-4C during this century, it has become increasingly critical that we develop sounds methods to assess potential adaptation responses. A new brief by Rachel Berger & Muyeye Chambwere, Beyond Cost-Benefit: Developing a Complete Toolkit for Adaptation Decisions, IIED Briefing, June 2010 (3 pages), could be an excellent student reading for discussing several different options in this context.

Among the take-aways from the brief:

1. While climate change could have serious impacts on lives and livelihoods in many developing countries, adaptation strategies “will be even more costly if they have unintended negative consequences;”
2. For some community-based adaptation programs, alternative tools may be better, including cost-effectiveness, or economic impacts or valued as measured by stakeholders;
3. There is a very wife range of cost estimates for adaptation, from $9 billion to 109 billion; in most cases adaptation for sectors where information is unavailable are not costed out, e.g. ecosystems;
4. There are several issues that challenge the validity of traditional cost-benefit analysis:

• Formal approaches e.g. cost-benefit analysis often rely on market values while planners are obliged to draw heavily on local knowledge if they are to achieve synergy with how local ecosystems and farming systems;
• Some development NGOs argue that local people should choice their adaptation investment priorities, utilizing their own criteria. However, this means that values are established locally and outside of formal accounting processes;
• Cost-benefit analyses often use materials and other resources available locally, often avoiding negative impacts on the environment; however, these impacts are often not taken into account in cost-benefit approaches;
• Successful adaptation often requires iterative approaches, some of which will fail, and acquisition of new skills and knowledge. However, cost-benefit analysis usually labels these factors as costs, even though knowledge is valuable and failures are an inevitable part of the process;
• An important part of the adaptation programs should be increasing adaptive capacity, which requires linked people into networks with access to information and resources. Again, social networks are a factor that cannot be easily assigned an economic value despite their value;

1. The decision of countries on appropriate adaptation responses will be informed by factors beyond cost-benefit analysis, e.g. risk assessment. Also, while costs and benefits can be assessed in the context of specific capital investment projects, this is not the case outside such well-specified types of action. Yet we know in many cases, e.g. the threat of rising sea levels to small island States, that interventions are justified even without hard numbers to justify adaptation responses.

The article should generate some interesting discussion. Some pertinent questions include the following:

1. If the lion’s share of adaptation funding is provided by developed countries, do they have the right to establish the metrics for assessment, e.g. cost-benefit analysis, or if adaptation funding is, as many developing countries argue, “reparations” for climate-related damages, do they have a virtually unbridled right to use such funds as they deem most judicious?
2. Why do different assessments of adaptation costs yield such radically different cost estimates? What are the underling assumptions of different studies and how do we assess their validity?;
3. What are some potential examples of maladaptation, and how do the metrics described here help us to avoid such results?

Related posts:

1. New McKinsey Study on Climate Adaptation
2. Microfinance and Adaptation
3. New Germanwatch Analysis of Adaptation Responses, Post-Copenhagen
4. Agribiodiversity and Adaptation Database
5. New Study on Private Financing of Adaptation/Mitigation Climate Change Efforts