CRVA METHODOLOGY
Costs & Benefits
Explore the concepts and methods behind the CRVA process and understand how it can be applied to local, regional and national levels in the Central Asia region. Get insight on how to bridge climate exposure and risk with meaningful, actionable adaptation interventions.
Estimating Costs of Adaptation
When assessing costs and benefits of adaptation options, adaptation planners can make use of approaches range which have proven to be effective decision-support tools in broader development and sectors planning contexts. Three most commonly used techniques for assessing adaptation cost options include:
Cost-benefit analysis (CBA) is often used to assess adaptation options when efficiency is the only decision making criteria. A CBA involves calculating and comparing all of the costs and benefits, which are expressed in monetary terms. The comparison of expected costs and benefits can help to inform decision makers about the likely efficiency of an adaptation investment. CBA provides a basis for prioritising possible adaptation measures. The benefit of this approach is that it compares diverse impacts using a single metric.
Cost-effectiveness analysis (CEA) is used to find the least costly adaptation option or options for meeting selected physical targets. Given that CEA is performed when the objectives of the adaptation measures have been identified and the remaining task is to find the lowest-cost option for meeting these objectives, it does not evaluate whether the measure is justified (e.g. by generating a certain benefit-cost ratio or IRR). CEA is applied in assessing adaptation options in areas where adaptation benefits are difficult to express in monetary terms, including human health, freshwater systems, extreme weather events, and biodiversity and ecosystem services; but where costs can be quantified. For example, given the necessity for water, the aim of an assessment is not to find alternative adaptation options that might yield higher adaptation benefits, but to find those options that ensure sustainable water quality and quantity for vulnerable communities.
Multi-criteria analysis (MCA) allows assessment of different adaptation options against a number of criteria. Each criterion is given a weighting. Using this weighting, an overall score for each adaptation option is obtained. The adaptation option with the highest score is selected. MCA offers an alternative for the assessment of adaptation options when only partial data is available, when cultural and ecological considerations are difficult to quantify and when the monetary benefit or effectiveness are only two of many criteria. MCA essentially involves defining a framework to integrate different decision criteria in a quantitative analysis without assigning monetary values to all factors. MCA was the method of choice for least developed countries (LDCs) in preparing their national adaptation programmes of action (NAPAs).