Economic Evaluation of Adaptation Pathways for an Urban Drainage System Experiencing Deep Uncertainty

Abstract

As Decision Making under Deep Uncertainty methodologies are becoming more widely utilised, there has been a growth in the use and generation of Adaptation Pathways. These are meant to convey to policy makers how short-term adaptations can act as elements of longer-term adaptation strategies. However, sets of Adaptation Pathways do not convey the individual pathway’s relative costs and benefits. To address this problem in relation to urban pluvial flooding, an economic analysis of a set of Adaptation Pathways was conducted. Initially, a methodology to conduct an economic assessment for deterministic climate change scenarios is developed. This methodology is then modified, using methods that underpin real options to assess how a pathway performs across a bundle of possible futures. This delivered information on how the performance of adaptations can vary across different climate change scenarios. By comparing the deterministic analysis to the new method, it was found that the order in which options are implemented greatly affects the financial performance of an Adaptation Pathway, even if the final combination of options is identical. The presented methodology has the potential to greatly improve decision making by informing policy makers on the potential performance of adaptation strategies being considered.

Decisions, options, and actions in the face of uncertainty: a systematic bibliometric and thematic review of climate adaptation pathways

“…Radhakrishnan et al 2018). Similar results were obtained at the title and abstract level, although some new keywords appeared, such as 'participatory approach' (Babovic and Mijic 2019a) and 'strategies' (Petr et al 2015). Furthermore, as shown in figure 4 ).…”

“…• Cost and benefits of different APs not accounted for (Babovic and Mijic 2019a) and the community might be more difficult, resulting in a process that only engages a small vocal minority of citizens (Totin et al 2021).…”

“…Node size and link thickness are proportional to the term frequency and link strength, respectively, in this figure . (n = 3) and the Netherlands (n = 3) (table 5). Seven studies report on the application of APs for managing flood risk on the River Thames, London (TE2100 project) (Ranger et al 2013, Kingsborough et al 2016, Babovic and Mijic 2019a, 2019b) and the Rhine Delta in the Netherlands (Haasnoot et al 2013, Zevenbergen et al 2015, Hermans et al 2017. The articles in this theme either focused on management of water resources under climate change pressures (n = 9) or flood risk management systems to reduce vulnerability and increase resilience (n = 7).…”

“…One survey-based article, Radhakrishan et al (2018), closely followed a five step pathways process, with surveys revealing that people could cope with flood levels in Can Tho City in Vietnam if they were at manageable levels. Babovic and Mijic (2019a) used economic analysis combined with climate change scenarios to see which options implemented affected the financial performance of different APs.…”

“…However, while APs aim to inform decision makers about potential adaptation options, seven articles described the challenges of assessing those options, and the limits currently available tools for doing so. For example, the costs associated with potential strategies (Babovic and Mijic 2019a) may not be known, or there may be residual costs and additional risks associated with moving from one strategy to another within an AP or between two different pathways (Bloemen et al 2018, Hall et al 2019, Lawrence et al 2019. Bloemen et al (2018Bloemen et al ( : 1087 suggest that 'all schemes with a cost-benefit greater than one should be funded' , and this cost-benefit ratio should be the determining factor for whether or not an AP is considered worthwhile.…”