Choosing the right Adaptation Assessment Method Resilient Cities 2012, Bonn May 12th, 2012 Stelios Grafakos and Veronica Olivotto, Institute for Housing and Urban Development Studies, Erasmus University Rotterdam
Outline Adaptation Assessment (AA)Cycle Overview of Main AA Approaches
Cost-Benefit Analysis Cost-Efficiency Analysis Multi-Criteria Analysis
AA’s Methodological Issues
Uncertainty Valuation Inclusion Co-benefits
Review and Analysis Methodology Comparative table of reviewed literature Results and Discussion
Photo Credit: UNDP Bhutan
Objectives Investigate key methodological issues for each
approach Review a selection of CBA/CEA/MCA empirical
applications (in both rural and urban areas) Discuss strengths, weakness and contribution to
the assessment of Climate Change Adaptation
Understanding risk in urban areas Urbanization: Natural growth, migration,
reclassification of rural settlements to urban STRESS
RISK
Megacities = hotspots of risk
Small towns (secondary cities) = less
resources/poor planning and services
Peri-Urban= random and fast transformation of
land and population
Spatial-Temporal scales of Adaptation vs Mitigation Global
Mitigation National Adaptation
Local
Near -term
Long -term
Adaptation Spatial Scales Global (IAM, GEM)
National (NAPAs)
Local (appraisal of vulnerability and adaptation
measures)
Adaptation process and its key components EX-ANTE
ASSESSMENT EX-POST
MONITORING AND EVALUATION
PLANNING
IMPLEMENTATION Source: UNFCC (2011)
Adaptation assessment challenges and characteristics Uncertainty Valuation Co-Benefits Inclusion Equity
U
V
I
CoB
Adaptation assessment challenges and characteristics Uncertainty • Large range of possible impacts (Climate scenarios; Likely impacts/Losses; Stakeholder’s preferences) • Data/Measurements
(Sample size, Measurement approach)
U
Adaptation assessment challenges and characteristics Valuation Market costs and benefits (Financial Assessment) Non-Market costs and
benefits (Economic Assessment)
Baselines, Discount rates,
Time-Horizon
V
Adaptation assessment challenges and characteristics Inclusion Horizontal (state actors across sectors) Vertical (non-state actors
across scales)
Distributional impacts of
adaptation options (Equity)
I
Adaptation assessment challenges and characteristics Co-Benefits Measure
Positive for M
Positive for A
Reforestation with native and diverse tree species
Carbon storage
Habitat and species protection, flood control, soil preservation
Mitigation Measure
Potential negative impact for A
Re-afforestation with non native species or high water demand species
Competition for water supplies, biodiversity loss
Adaptation Measure
Potential negative impact for M
Relocation of infrastructure and development out of floodplain
Increase in one-time GHG emissions due to re-building of infrastructure
CoB
Adaptation assessment challenges and characteristics Co-Benefits Barriers to the harmonization of M&A: Lack of scientific knowledge on
adaptation Few examples of adaptation implementation M&A require both legally compelling grounds
CoB
Decision Support Tools for Adaption Assessment
Decision Support Tools for Adaption Assessment Cost Benefit Analysis
(CBA)
Cost Effectiveness
Analysis (CEA)
Multiple Criteria
Analysis (MCA)
Source: UNFCCC, 2002
Cost Benefit Analysis (CBA) AIM: EFFICIENCY OF ADAPTATION MEASURES
Define adaptation objective(s)
HOW: MEASURING ALL COSTS AND BENEFITS IN MONETARY TERMS
Establish a baseline
CHALLENGE: ADDING RELIABLE ESTIMATES OF NON MARKET THINGS
Quantify likely impacts Monetize impacts – express in Costs and Benefits
At discounted value by calculating NPV/BCR/IRR
Compare Costs and Benefits
Cost Benefit Analysis (CBA) CBA STRENGHTS
CBA WEAKNESSESS
Solid and widely used
Trained staff
Project and policy
Extensive data
specific Strong absolute comparability Intergenerational considerations (discount rate)
Non market C-B Discount rate “Objective”
Distribution of C-B
Cost Effectiveness Analysis (CEA) AIM: IDENTIFY LEAST COSTLY ADAPTATION OPTION OR OPTIONS FOR MEETING SELECTED PHYSICAL TARGETS
HOW: QUANTIFICATION OF COSTS OF NON-MONETARY OPTIONS (QUANTIFIABLE) CHALLENGE: COMPARING DIFFERENT ADAPTATION OPTIONS AND JUSTIFICATION OF CHOSEN MEASURE
Define adaptation objectives Establish a baseline
Aggregate costs Determine Effectiveness Rank measures
Cost Effectiveness Analysis (CEA) CEA STRENGHTS
CEA WEAKNESSESS
Considers non
Trained staff
monetary benefits Consideration of budget constraints
Unable to offer absolute
analysis Time consuming (extensive data)
Multi-Criteria Analysis (MCA) Define Options AIM: ASSESSMENT OF MULTIPLE ADAPTAPION OPTIONS WHERE MONETARY BENEFIT AND EFFECTIVENESS Define evaluation criteria ARE ONLY TWO OF THE POSSIBLE CRITERIA Quantify impacts or HOW: ASSIGNING WEIGHTS assign scores
Stakeholders
Expert Judgments
AND CRITERIA FOR EACH
CHALLENGE: ADDING Normalize scores RELIABLE ESTIMATES OF NON MARKET THINGS
Weight evaluation criteria Rank options
Stakeholders
Multi-Criteria Analysis (MCA) MCA STRENGHTS
MCA WEAKNESSESS
Considers monetised and
Scoring and ranking is
non-monetised costs subjective Allows for a wide range of Relative comparability criteria Not easy to reach an agreement Generates stake-holders’ on weighting acceptance Intergenerational consideration (range of criteria used + stakeholders inclusion)
Review of studies
Selection of cases Studies characteristics Year Author
Country
Assessment
National/Local Sectoral
Method Environment Agency (UK) in 1 2009 UNFCC
United Kingdom
Practical Action 2 2011 in UNFCC Nepal Kouwenhoven P., Cheatham, C (in 3 2006 UNFCC) Pacific Islands 4 2010 ECA Group
South Florida
CBA CBA
coverage
Local
Flood management
Urban
Local
Disaster management
Rural
CEA
Local
CEA (partial CBA)
Local
Water management Rural Hurricane/Sea Level Rise Urban Urban
Rural
5 2011 Haque et al
Bangladesh
MCA
Local
Flood management
6 2007 Qin et al 7 8
Canada
MCA
Local
Flood management
9
Scope
Comparison of Results Cases
Country/Level
Methodological Challenge
Method
Uncertainty
Valuation
Inclusion
Co-Benefits
Environment Agency in UNFCC
UK (Urban)
-++
- ++-
++
+
CBA
Practical Action in UNFCC
Nepal (Rural)
-++
- ++-
++
-
CBA
Kouwenhoven P., Cheatham, C
Pacific Islands (Rural)
-++
-+--
++
-
CEA
ECA Group
South Florida (Urban)
+--
-+--
+-
-
CEA
Haque at al
Bangladesh (Urban)
+-+
--++
++
-
MCA
Qin et al
Canada (Rural)
-++
--++
++
-
MCA
Comparison of Tools needs Tools
Technical Capacity
Data Needs
Time
Cost $
Participant Requirements
CBA
CEA
MCA
Source: UN-HABITAT
Question of affordability and capacity! Different urbanization forms to account for Donor Grants + National + Local Government investments ;= Low Requirements (Capacity) = Medium Requirements (Time) ; = High Requirements (High Costs)
Discussion No method is best at addressing all methodological
challenges (Structural impediment) Uncertainty: Climate Change Scenarios vs Local Risk Data Valuation: MCA is best at capturing non market values; no method captures baselines; CBA/CEA as expected Inclusion: All methods show good scoring Co-Benefits: Often not covered or explicit Method Affordability and Capacity required
Combined application to overcome methods deficiencies
PERFORMANCE BASED GRANT SYSTEM (PBGS) FOR LOCAL GOVERNMENTS
UNCDF LOCAL Launch Date
July 2011
Project Stage
End of Phase 1
Sector & Vulnerability Focus
Forestry; Agriculture; Infrastructure; Energy; Biodiversity
No. of LGs
4
UNCDF Investment
$750,000 USD
Implementation Partner
Department of Local Governance (Ministry of Home & Cultural Affairs, Royal Government of Bhutan)
LG Proposals
4 currently under review
Next Stage
Review proposals and administer PBCRGs
PBGS – LOCAL: Current/Future Research Link to Vulnerability and Impact Assessments Combination of different tools (i.e. CBA, MCA) Framework for Monitoring and Evaluation (M&E) of
Climate Adaptation projects
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THANK YOU
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