Stage 5.3 Undertake CBA
Who's Involved
- Assignment Management Team
Timing and time required
- Following ‘Climate risk management and cost-benefit analysis’ workshop and collection of data
- Over a period of about 6 weeks
Key questions
- What are the financial, social and environmental costs and benefits of each adaptation option, and how will these be realized?
- What are the appropriate monetary indicators for each of the parameters to be included in the CBA?
- Does the monetary value of a particular parameter need to be ‘transferred’ from international values to local/national values?
- What are the uncertainties related to the costs and benefits and what is the sensitivity of the CBA to these uncertainties
Tools
- CBA and environmental economics methodologies and tools
Guidance
- Apportioning costs and benefits to each adaptation option is the key function of the CBA.
- This task requires specialist environmental economics knowledge and experience.
- It is important to ensure consistency of analysis from one adaptation option to the next.
- Contractors may have their own tools and processes for undertaking CBA, but the key element is to ensure that social and environmental costs and benefits are quantified and monetized, along with financial costs and benefits.
- There may be uncertainty about the valuation of certain parameters. Sensitivity analysis is essential to assess how changes in parameter values affect the results of the CBA i.e. to ascertain how robust the adaptation options are, to sources of uncertainty.
Outputs
- Draft CBA section of the final report, including discussion of relative merits of each adaptation option and sensitivity of the CBA results.
Albania