Choosing the right Adaptation Assessment Method

Choosing the right Adaptation Assessment Method Resilient Cities 2012, Bonn May 12th, 2012 Stelios Grafakos and Veronica Olivotto, Institute for Housi...
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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

[email protected] [email protected]

THANK YOU

Questions?