On the economics of coastal adaptation solutions in an uncertain world

The economics of adaptation to climate change relies heavily on comparisons of the benefits and costs of adaptation options that can range from changes in policy to implementing specific projects. Since these benefits are derived from damages avoided by any such adaptation, they are critically dependent on the specification of a baseline. The current exercise paper reinforces this point in an environment that superimposes stochastic coastal storm events on two alternative sea level rise scenarios from two different baselines: one assumes perfect economic efficiency of the sort that could be supported by the availability of actuarially fair insurance and a second in which fundamental market imperfections significantly impair society’s ability to spread risk. We show that the value of adaptation can be expressed in terms of differences in expected outcomes damages only if the effected community has access to efficient risk-spreading mechanisms or reflects risk neutrality in its decision-making structure. Otherwise, the appropriate metric for measuring the benefits of adaptation must be derived from certainty equivalents. In these cases, increases in decision-makers’ aversion to risk increase the economic value of adaptations that reduce expected damages and diminish the variance of their inter-annual variability. For engineering and other adaptations that involve significant up-front expense followed by ongoing operational cost, increases in decision-makers’ aversion increase the value of adaptation and therefore move the date of economically efficient implementation closer to the present.     

Assessing market and non-market costs of freshwater flooding due to climate change in the community of Fredericton, Eastern Canada

There is a general consensus that climate change will increase the frequency and severity of freshwater flooding in many parts of the world. Communities prone to such flooding have struggled to understand the manner in which this will affect them (in both economic and social terms) and the appropriate way to adapt. In this study, we conduct a case-study investigation into the costs of freshwater flooding due to climate change along the Saint John River in Fredericton, NB, Canada. We develop a four-step framework that combines extreme event analysis, downscaled general circulation models, hydrologic analysis, and the contingent valuation method. Using this framework, together with primary data on a 2005 flooding event, we estimate market and non-market annual average flood damage under a number of climate and population scenarios. We find that non-market costs can represent up to 50% of total household costs of flooding events, and 23–42% of the total costs of flooding due to climate change, depending on the different climate and population scenarios considered. Incorporating such costs into flood adaptation planning may substantially increase support for active adaptation activities, especially in ‘worst case’ climate scenarios.     

Fern species richness and abundance are indicators of climate change on high-elevation islands: evidence from an elevational gradient on Tahiti (French Polynesia)

Coastal sector impacts from sea level rise (SLR) are a key component of the projected economic damages of climate change, a major input to decision-making and design of climate policy. Moreover, the ultimate global costs to coastal resources will depend strongly on adaptation, society’s response to cope with the local impacts. This paper presents a new open-source optimization model to assess global coastal impacts from SLR from the perspective of economic efficiency. The Coastal Impact and Adaptation Model (CIAM) determines the optimal strategy for adaptation at the local level, evaluating over 12,000 coastal segments, as described in the DIVA database (Vafeidis et al. 2006), based on their socioeconomic characteristics and the potential impacts of relative sea level rise and uncertain sea level extremes. A deterministic application of CIAM demonstrates the model’s ability to assess local impacts and direct costs, choose the least-cost adaptation, and estimate global net damages for several climate scenarios that account for both global and local components of SLR (Kopp et al. 2014). CIAM finds that there is large potential for coastal adaptation to reduce the expected impacts of SLR compared to the alternative of no adaptation, lowering global net present costs through 2100 by a factor of seven to less than $1.7 trillion, although this does not include initial transition costs to overcome an under-adapted current state. In addition to producing aggregate estimates, CIAM results can also be interpreted at the local level, where retreat (e.g., relocate inland) is often a more cost-effective adaptation strategy than protect (e.g., construct physical defenses).     

The long history of environmental migration: Assessing vulnerability construction and obstacles to successful relocation in Shishmaref,Alaska

Migration decisions are complex and are linked to multiple vulnerabilities, including changing ecological conditions precipitated by climate change. As ecological thresholds are met, community-wide migrations will become more common. These community-wide migrations are more likely to occur to already vulnerable populations, and may levy high social costs. In order to prevent the negative outcomes associated with forced migration and diaspora, policy intervention is likely. Our research examines the case study of Shishmaref, Alaska, where relocation as an adaptation strategy to changing ecological conditions is the only sustainable option. We find that the colonial history in Shishmaref is explicitly linked to contemporary exposure to hazards and increased vulnerability. We further assess obstacles to a State sponsored relocation. These obstacles include disaster response protocol that does not adequately accommodate climate change scenarios. Relocation planning is further complicated by feelings of mis- and under-representation of local voices in political arenas. This case demonstrates the interrelatedness between historically constructed vulnerability and obstacles to adaptation planning. We also offer unique insight into the details of relocation planning as an adaptation strategy among one of the first community-wide migrations associated with climate change.     

On the role of climate scenarios for adaptation planning

Climate scenarios have been widely used in impact, vulnerability and adaptation assessments of climate change. However, few studies have actually looked at the role played by climate scenarios in adaptation planning. This paper examines how climate scenarios fit in three broad adaptation frameworks: the IPCC approach, risk approaches, and human development approaches. The use (or not) of climate scenarios in three real projects, corresponding to each adaptation approach, is investigated. It is shown that the role played by climate scenarios is dependant on the adaptation assessment approach, availability of technical and financial capacity to handle scenario information, and the type of adaptation being considered.     

The need for and use of socio-economic scenarios for climate change analysis: A new approach based on shared socio-economic pathways

Socio-economic scenarios constitute an important tool for exploring the long-term consequences of anthropogenic climate change and available response options. A more consistent use of socio-economic scenarios that would allow an integrated perspective on mitigation, adaptation and residual climate impacts remains a major challenge. We assert that the identification of a set of global narratives and socio-economic pathways offering scalability to different regional contexts, a reasonable coverage of key socio-economic dimensions and relevant futures, and a sophisticated approach to separating climate policy from counter-factual “no policy” scenarios would be an important step toward meeting this challenge. To this end, we introduce the concept of “shared socio-economic (reference) pathways”. Sufficient coverage of the relevant socio-economic dimensions may be achieved by locating the pathways along the dimensions of challenges to mitigation and to adaptation. The pathways should be specified in an iterative manner and with close collaboration between integrated assessment modelers and impact, adaptation and vulnerability researchers to assure coverage of key dimensions, sufficient scalability and widespread adoption. They can be used not only as inputs to analyses, but also to collect the results of different climate change analyses in a matrix defined by two dimensions: climate exposure as characterized by a radiative forcing or temperature level and socio-economic development as classified by the pathways. For some applications, socio-economic pathways may have to be augmented by “shared climate policy assumptions” capturing global components of climate policies that some studies may require as inputs. We conclude that the development of shared socio-economic (reference) pathways, and integrated socio-economic scenarios more broadly, is a useful focal point for collaborative efforts between integrated assessment and impact, adaptation and vulnerability researchers.     

The AVOID programme’s new simulations of the global benefits of stringent climate change mitigation

Quantitative simulations of the global-scale benefits of climate change mitigation are presented, using a harmonised, self-consistent approach based on a single set of climate change scenarios. The approach draws on a synthesis of output from both physically-based and economics-based models, and incorporates uncertainty analyses. Previous studies have projected global and regional climate change and its impacts over the 21st century but have generally focused on analysis of business-as-usual scenarios, with no explicit mitigation policy included. This study finds that both the economics-based and physically-based models indicate that early, stringent mitigation would avoid a large proportion of the impacts of climate change projected for the 2080s. However, it also shows that not all the impacts can now be avoided, so that adaptation would also therefore be needed to avoid some of the potential damage. Delay in mitigation substantially reduces the percentage of impacts that can be avoided, providing strong new quantitative evidence for the need for stringent and prompt global mitigation action on greenhouse gas emissions, combined with effective adaptation, if large, widespread climate change impacts are to be avoided. Energy technology models suggest that such stringent and prompt mitigation action is technologically feasible, although the estimated costs vary depending on the specific modelling approach and assumptions.     

Costs of Reducing Carbon Emissions: An Integrated Modeling Framework Approach

This paper presents an approach to estimating world-regional carbon mitigation cost functions for the years 2020, 2050, and 2100. The approach explicitly includes uncertainty surrounding such carbon reduction costs. It is based on the analysis of global energy-economy-environment scenarios described for the 21st century. We use one baseline scenario and variants thereof to estimate cumulative costs of carbon mitigation as a function of cumulative carbon emission reductions. For our baseline for estimating carbon mitigation cost curves, we use the so-called IIASA F scenario. The F scenario is a high-growth, high-emissions scenario designed specifically to be used as a reference against which to evaluate alternatives. Carbon emissions and energy systems costs in the F scenario are then compared with (reduced) emissions and (higher) costs (including macroeconomic adjustment costs) of alternative scenarios taken from the IIASA scenario database. As a kind of sensitivity analysis of our approach, we also present the results of a scenario involving assumptions on particularly rapid technological progress.     

Towards extended shared socioeconomic pathways: A combined participatory bottom-up and top-down methodology with results from the Barents region

A major challenge in planning for adaptation to climate change is to assess future development not only in relation to climate but also in relation to social, economic and political changes that affect the capacity for adaptation or otherwise play a role in decision making. One approach is to use scenario methods. This article presents a methodology that combines top-down scenarios and bottom-up approaches to scenario building, with the aim of articulating local so-called extended socio-economic pathways. Specifically, we used the Shared Socioeconomic Pathways (SSPs) of the global scenario framework as developed by the climate research community to present boundary conditions about potential global change in workshop discussion with local and regional actors in the Barents region. We relate the results from these workshops to the different elements of the global SSPs and discuss potential and limitations of the method in relation to use in decision making processes.     

Challenges to scenario-guided adaptive action on food security under climate change

This paper examines the development and use of scenarios as an approach to guide action in multi-level, multi-actor adaptation contexts such as food security under climate change. Three challenges are highlighted: (1) ensuring the appropriate scope for action; (2) moving beyond intervention-based decision guidance; and (3) developing long-term shared capacity for strategic planning. To overcome these challenges we have applied explorative scenarios and normative back-casting with stakeholders from different sectors at the regional level in East Africa. We then applied lessons about appropriate scope, enabling adaptation pathways, and developing strategic planning capacity to scenarios processes in multiple global regions. Scenarios were created to have a broad enough scope to be relevant to diverse actors, and then adapted by different actor groups to ensure their salience in specific decision contexts. The initial strategy for using the scenarios by bringing a range of actors together to explore new collaborative proposals had limitations as well as strengths versus the application of scenarios for specific actor groups and existing decision pathways. Scenarios development and use transitioned from an intervention-based process to an embedded process characterized by continuous engagement. Feasibility and long-term sustainability could be ensured by having decision makers own the process and focusing on developing strategic planning capacity within their home organizations.     

Spatial targeting of floodplain restoration to equitably mitigate flood risk

Floodplain restoration offers an opportunity to enhance communities’ resilience to flooding. However, the degree to which these interventions mitigate damages is often unknown, and identifying the best locations for implementation is a challenge. Further, the extent to which the benefits of flood mitigation are equitably distributed within communities is rarely considered in restoration projects. Here, we develop a novel framework to optimize investments in floodplain restoration that maximizes the utility of avoided damages from flood inundation for a range of budgetary constraints. We estimate the expected reduction in flood damages from restoration interventions by integrating a hydraulic flood model and an economic damage cost model. Using equity-weighted utility functions, we explicitly evaluate how the value of reduction in flood damages varies for different property owners. We demonstrate the potential of this approach in the Lewis Creek watershed, located in Vermont, USA. Under all optimal scenarios, the benefits of avoided flood damages over a 100-year time period outweigh the costs of restoration by at least 5-to-1. Floodplain restoration has the potential to reduce the present value of damages by up to $400,000, a 5% decrease from the baseline, at a cost of only $75,000. We also show that the equity-weighted utility of flood mitigation increase when restoration interventions protect the lowest-income property owners, particularly those who live in mobile homes. Together, our results illuminate the importance of evaluating the distribution of benefits and costs associated with alternative restoration strategies, as well as underscore the capacity for floodplain restoration to build resilience to flooding.     

Deep uncertainty in long-term hurricane risk: Scenario generation and implications for future climate experiments

Current projections of long-term trends in Atlantic hurricane activity due to climate change are deeply uncertain, both in magnitude and sign. This creates challenges for adaptation planning in exposed coastal communities. We present a framework to support the interpretation of current long-term tropical cyclone projections, which accommodates the nature of the uncertainty and aims to facilitate robust decision making using the information that is available today. The framework is populated with projections taken from the recent literature to develop a set of scenarios of long-term hurricane hazard. Hazard scenarios are then used to generate risk scenarios for Florida using a coupled climate–catastrophe modeling approach. The scenarios represent a broad range of plausible futures; from wind-related hurricane losses in Florida halving by the end of the century to more than a four-fold increase due to climate change alone. We suggest that it is not possible, based on current evidence, to meaningfully quantify the relative confidence of each scenario. The analyses also suggest that natural variability is likely to be the dominant driver of the level and volatility of wind-related risk over the coming decade; however, under the highest scenario, the superposition of this natural variability and anthropogenic climate change could mean notably increased levels of risk within the decade. Finally, we present a series of analyses to better understand the relative adequacy of the different models that underpin the scenarios and draw conclusions for the design of future climate science and modeling experiments to be most informative for adaptation.     

The Vulnerability of the Australian Beef Industry to Impacts of the Cattle Tick (Boophilus microplus) under Climate Change

An integrated assessment is presented of the potential impacts of the cattle tick (Boophilus microplus Canestrini) on the Australian beefindustry under climate change. The project was carried out as a case study to test an impact assessment approach that was designed to integrate biological, production and socio-economic impacts on managed and natural systems. A climate-driven, tick population model was run for European, zebu and crossbred cattle breeds having different levels of resistance to cattle ticks. A geographical information system (GIS) was used to organise spatial data on climate scenarios and industry statistics and to undertake regional analyses.A comparison was made of the two available approaches to conducting impact assessments, namely a bottom-up approach using sensitivity analysis and a top-down approach using climate change scenarios from a global circulation model (GCM) (CSIRO, 1996). The output, in terms of the abundance of tick populations and reductions in cattle productivity for each breed showed significant expansions in potential geographical impacts. In the absence of any adaptation measures, the results indicated changes in the losses in live weight gain of cattle tick ranging from 7780 tonnes per year by 2030 to 21637 tonnes per year by 2100, in comparison with estimates for current losses of 6594 tonnes per year.The principal adaptation options available to the beef industry are to switch to breeds that are more resistant to cattle ticks, or to increase the frequency of treatments with various tick control products. In this paper we focus on switching breeds as an adaptive measure when appropriate damage thresholds are triggered under the climate change scenarios. When adaptation measures were put in place, the losses ranged from 4962 tonnes in 2030 to 5619 tonnes in 2100 compared with 2636 tonnes at present if all producers adopted the optimal breed structure. Optimal breed structure was defined as one that would prevent tick numbers per animal exceeding 100 ticks per animal for European and 700 ticks per animal for crossbred breeds of cattle in any week of the year under a tick control strategy that was suitable for present climatic conditions. The lower threshold for European breeds reflects their vulnerability to explosive increases in numbers because of their low resistance to ticks. The results of the analyses using the GCM scenarios were used in an economic model to calculate costs of lost live-weight gain for 2030, 2070 and 2100. The greatest increases in costs were incurred in the southern parts of the current distribution in Queensland and potentially in northern New South Wales if the present quarantine barrier failed.Given the great uncertainty of the nature of possible regional changes in climate, analyses of the sensitivity of losses in live weight gain to changes in climatic variables were also undertaken. The analyses included a measure of likely impacts of cattle tick on the beef cattle industry, in the absence of adaptation measures, as a baseline measure of sensitivity. The likely impacts on crossbred cattle were insensitive to the climatic variables.When adaptive breed changes were allowed, the economic impacts on the industry were insensitive to the GCM scenarios. This suggests that, at least in this instance, reducing the uncertainties in climate change scenarios is not a priority if the adaptation strategies can be implemented in a cost-effective manner. Finally we made a qualitative assessment of the sustainability and robustness of alternative approaches to adaptation and assessed regional vulnerability to cattle tick under climate change. The conclusions were so strongly dependent on assumptions about the future of other global changes, in particular the ability to maintain quarantine barriers and to retain effective acaricides at comparable costs to the present, that we strongly recommend that risk assessments of climate change extend to all relevant variables in involved in global change where possible.     

Assessing climate change impacts,sea level rise and storm surge risk in port cities: a case study on Copenhagen

This study illustrates a methodology to assess the economic impacts of climate change at a city scale and benefits of adaptation, taking the case of sea level rise and storm surge risk in the city of Copenhagen, capital of Denmark. The approach is a simplified catastrophe risk assessment, to calculate the direct costs of storm surges under scenarios of sea level rise, coupled to an economic input–output (IO) model. The output is a risk assessment of the direct and indirect economic impacts of storm surge under climate change, including, for example, production and job losses and reconstruction duration, and the benefits of investment in upgraded sea defences. The simplified catastrophe risk assessment entails a statistical analysis of storm surge characteristics, geographical-information analysis of population and asset exposure combined with aggregated vulnerability information. For the city of Copenhagen, it is found that in absence of adaptation, sea level rise would significantly increase flood risks. Results call for the introduction of adaptation in long-term urban planning, as one part of a comprehensive strategy to manage the implications of climate change in the city. Mitigation policies can also aid adaptation by limiting the pace of future sea level rise.     

Integrating top–down and bottom–up approaches to design global change adaptation at the river basin scale

The high uncertainty associated with the effect of global change on water resource systems calls for a better combination of conventional top–down and bottom–up approaches, in order to design robust adaptation plans at the local scale. The methodological framework presented in this article introduces “bottom–up meets top–down” integrated approach to support the selection of adaptation measures at the river basin level by comprehensively integrating the goals of economic efficiency, social acceptability, environmental sustainability and adaptation robustness. The top–down approach relies on the use of a chain of models to assess the impact of global change on water resources and its adaptive management over a range of climate projections. Future demand scenarios and locally prioritised adaptation measures are identified following a bottom–up approach through a participatory process with the relevant stakeholders and experts. The optimal combinations of adaptation measures are then selected using a hydro-economic model at basin scale for each climate projection. The resulting adaptation portfolios are, finally, climate checked to define a robust least-regret programme of measures based on trade-offs between adaptation costs and the reliability of supply for agricultural demands.This innovative approach has been applied to a Mediterranean basin, the Orb river basin (France). Mid-term climate projections, downscaled from 9 General Climate Models, are used to assess the uncertainty associated with climate projections. Demand evolution scenarios are developed to project agricultural and urban water demands on the 2030 time horizon. The results derived from the integration of the bottom–up and top–down approaches illustrate the sensitivity of the adaptation strategies to the climate projections, and provide an assessment of the trade-offs between the performance of the water resource system and the cost of the adaptation plan to inform local decision-making. The article contributes new methodological elements for the development of an integrated framework for decision-making under climate change uncertainty, advocating an interdisciplinary approach that bridges the gap between bottom–up and top–down approaches.     

Assessing mitigation-adaptation scenarios for reducing catastrophic climate risk

Countries can use both mitigation and adaptation strategies to protect their citizens from catastrophic risk posed by climate change (e.g., shift in the jet stream). A nation can mitigate by reducing CO₂ emissions, which reduces the probability of a catastrophic event; it can adapt by altering the infrastructure so that damages can be reduced in the event a catastrophe is realized. Herein we add to the current literature by extending the endogenous risk framework into a dynamic framework permitting analysis of both mitigation and adaptation while allowing for the dynamic process of global climate change. Our results suggest adaptation to catastrophe is a small fraction of the national climate protection budget relative to mitigation when nations cooperate fully, when damages are both continuous and catastrophic, and when nations have a short planning horizon. Adaptation becomes more important relative to mitigation when nations are unlikely to cooperate, when damages are mainly catastrophic, or when the nation’s planning horizon increases.     

Dynamic adaptive policy pathways: A method for crafting robust decisions for a deeply uncertain world

A new paradigm for planning under conditions of deep uncertainty has emerged in the literature. According to this paradigm, a planner should create a strategic vision of the future, commit to short-term actions, and establish a framework to guide future actions. A plan that embodies these ideas allows for its dynamic adaptation over time to meet changing circumstances. We propose a method for decisionmaking under uncertain global and regional changes called ‘Dynamic Adaptive Policy Pathways’. We base our approach on two complementary approaches for designing adaptive plans: ‘Adaptive Policymaking’ and ‘Adaptation Pathways’. Adaptive Policymaking is a theoretical approach describing a planning process with different types of actions (e.g. ‘mitigating actions’ and ‘hedging actions’) and signposts to monitor to see if adaptation is needed. In contrast, Adaptation Pathways provides an analytical approach for exploring and sequencing a set of possible actions based on alternative external developments over time. We illustrate the Dynamic Adaptive Policy Pathways approach by producing an adaptive plan for long-term water management of the Rhine Delta in the Netherlands that takes into account the deep uncertainties about the future arising from social, political, technological, economic, and climate changes. The results suggest that it is worthwhile to further test and use the approach.     

Can adaptation and mitigation be complements?

It is often claimed that mitigation of greenhouse gases and adaptation to climate change are complementary strategies. If this means that it will usually be optimal to use both mitigation and adaptation to deal with climate change; and that a perceived increase in the damages caused by climate change should require an increase in both mitigation and adaptation, then simple economic analysis would support such an interpretation. However, complementarity has a more technical meaning in economics, which implies if the costs of mitigation fell, then the optimal response would be to increase the level of both mitigation and adaptation. We develop a range of economic models to explore the relationship between mitigation and adaptation; and show that in general adaptation and mitigation will be substitutes. We also find that it is possible for complementarity to occur in the special case where adaptation costs depend on the amount of mitigation.     

Water resources for agriculture in a changing climate: international case studies

This integrated study examines the implications of changes in crop water demand and water availability for the reliability of irrigation, taking into account changes in competing municipal and industrial demands, and explores the effectiveness of adaptation options in maintaining reliability. It reports on methods of linking climate change scenarios with hydrologic, agricultural, and planning models to study water availability for agriculture under changing climate conditions, to estimate changes in ecosystem services, and to evaluate adaptation strategies for the water resources and agriculture sectors. The models are applied to major agricultural regions in Argentina, Brazil, China, Hungary, Romania, and the US, using projections of climate change, agricultural production, population, technology, and GDP growth.For most of the relatively water-rich areas studied, there appears to be sufficient water for agriculture given the climate change scenarios tested. Northeastern China suffers from the greatest lack of water availability for agriculture and ecosystem services both in the present and in the climate change projections. Projected runoff in the Danube Basin does not change substantially, although climate change causes shifts in environmental stresses within the region. Northern Argentina's occasional problems in water supply for agriculture under the current climate may be exacerbated and may require investments to relieve future tributary stress. In Southeastern Brazil, future water supply for agriculture appears to be plentiful. Water supply in most of the US Cornbelt is projected to increase in most climate change scenarios, but there is concern for tractability in the spring and water-logging in the summer.Adaptation tests imply that only the Brazil case study area can readily accommodate an expansion of irrigated land under climate change, while the other three areas would suffer decreases in system reliability if irrigation areas were to be expanded. Cultivars are available for agricultural adaptation to the projected changes, but their demand for water may be higher than currently adapted varieties. Thus, even in these relatively water-rich areas, changes in water demand due to climate change effects on agriculture and increased demand from urban growth will require timely improvements in crop cultivars, irrigation and drainage technology, and water management.     

Exploring pathways for sustainable water management in river deltas in a changing environment

Exploring adaptation pathways into an uncertain future can support decisionmaking in achieving sustainable water management in a changing environment. Our objective is to develop and test a method to identify such pathways by including dynamics from natural variability and the interaction between the water system and society. Present planning studies on long-term water management often use a few plausible futures for one or two projection years, ignoring the dynamic aspect of adaptation through the interaction between the water system and society. Our approach is to explore pathways using multiple realisations of transient scenarios with an Integrated Assessment Meta Model (IAMM). This paper presents the first application of the method using a hypothetical case study. The case study shows how to explore and evaluate adaptation pathways. With the pathways it is possible to identify opportunities, threats, timing and sequence of policy options, which can be used by policymakers to develop water management roadmaps into the future. By including the dynamics between the water system and society, the influence of uncertainties in both systems becomes clearer. The results show, among others, that climate variability rather than climate change appears to be important for taking decisions in water management.