Seite - 298 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

298 W.J.WouterBotzenet al. Fig.12.6 Net Present Value (bars, left axis) and normalised Benefit/cost ratio (diamonds, right axis) of flood risk adaptationmeasures forHoChiMinhCity for three combinations of climate changeandsocio-economicscenariosRCP4.5andSSP2,RCP8.5andSSP5,RCP8.5High-Endand SSP5,until theyear2100.Note:discount rate is2.5%. SourceScussolini et al. (2017) Thedevelopmentofnewfloodriskprotectionstandardsfor theNetherlandsillus- trates theuseofCBAincombinationwithother considerations and indicators (see Box12.2).Thecasebelowalso illustrateshowtheapplicationofCBAindesigning region-specific protection standards reduced protection investment costs in com- parison to an earlier official proposal for a nation-wide uniform update of the old standards. There are alternatives to CBA that can be applied. Cost-effectiveness analysis (CEA) is amethod that can be applied to identify least-cost options tomeet a cer- tain, pre-defined target or policy objective, for example, a certain safety standard. CEAcanalsobeused if thebenefitsofalternativeoptionsareassumedtobesimilar enoughthat thechoicebetweenoptionscanbemadeonthecostdimension.Theuse ofCEA is appropriate if the benefits of alternative options arefixedor pre-defined (suchas reducingdisaster fatalities or losses to apre-defined level).Theadvantage of CEA is that it does not require tomonetise the benefits of options, such as the monetary benefits of avoiding health or environmental impacts of floods. The dis- advantage of CEA is that it cannot determine whether an option is economically efficient, i.e.whether its benefits exceed its costs.Multi-criteria analysis (MCA) is another decision-supportmethod that can be used in certain circumstances.MCA providesa structuredwayofcomparingbenefitsandcosts that areexpressed indif- ferent units. For example, benefitsmaybe expressed in “number of lives saved”or a qualitative indicator of landscape or environmental quality.MCA is sometimes