Work Package 5: Costs and Benefits of the Adaptation to Climate Change
Work packages 3 and 4 assess the impacts of climate change and of certain selected adaptation strategies on income and employment by means of economic modelling. These results will be used in work package 5 in order to evaluate possible costs and benefits of climate change and adaptation strategies and to render them comparable.
Climate change - and this holds for adaptation measures as well - might impact not only on income and employment. Its consequences could affect diverse normative concerns: subjective attitudes like degrees of satisfaction or happiness with social states, but also valuable properties like biodiversity, social relationships (by migration pressure), health (by diseases’ spreading), security (by extreme weather events).
Usually, cost-benefit analyses either neglect the broad variety of affected normative concerns or they translate only a narrow selection of affected values into monetary values.
This work package aims at developing an alternative methodology for the integration of different normative properties into a cost-benefit analysis: the extended CBA. The project furthermore intends to apply the methodology in a case study on adaptation policy.
An extended CBA comprises not only an evaluation of market impacts of a measure to which market prices can easily be attached; it also includes an evaluation of impacts of a measure on goods and services that are not traded on markets. The idea behind the extended CBA is to evaluate non-market goods and services based on different valuation theories: teleological approaches (preference-based welfarism, hedonism) as well as deontological theories (rights-based, capabilities approaches)
Approaches and Methodology
The main task in this work package will consist of an identification of indicators by which the valuation theories can be operationalized and be integrated into a CBA. This research will be based mainly on literature review. Subject to the availability of data several case studies will be conducted in which extended CBAs should be tested.
Since an extended CBA evaluates social states or actions in a diversity of normative “currencies” a ranking of social states or actions is only possible by the means of multi-criteria evaluation methods. The work package will introduce them and discuss the advantages and disadvantages of their use.
The result of this work package will consist in a methodology for an application of extended Cost-Benefit-Analyses.