Technical Policy Briefing Notes - 1

Summary of Methods and Case Study Examples from the MEDIATION Project


Discussion and Conclusions
Policy Briefs

Summary Methods and Case Study Examples
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Discussion and Conclusions

The various approaches are summarised in the figure below. This outlines the main traditional decision support tools and the new tools that have a greater focus on decision making under uncertainty.


Figure 2. Summary of Tools


The review and case studies provide a number of practical lessons on the application of these tools to adaptation. They provide useful information on the range of adaptation problem types where the various approaches might be appropriate, as well as data needs, resource requirements and good practice.

It is important to stress that the different tools use various metrics, approaches and assumptions, and have potentially different applicability. No one method is right or wrong – different methods may be more or less appropriate according to the adaptation problem and objectives. Furthermore, the methods and tools are not mutually exclusive, and there are several examples where combinations of tools have been used, or where one tool has been used to scope out promising adaptation options from a long-list, which is then subject to detailed appraisal using one of the more complex methods.

Information from the review is summarised in Tables 3 and 4 below. Note that the grading of the resources and expertise required to use these tools are presented in relative terms. Depending on the size or type of adaptation, and the location in the project cycle (from scoping options to detailed implementation analysis) the resources spent on decision analysis may be relatively easy to justify in terms of avoiding misallocation and mal-adaptation.

A number of issues are relevant in considering the applicability to different adaptation problem types.

First, the choice of tools depends on the availability of benefits information. As shown below, MCA and AHP have the flexibility to work with qualitative or quantitative information (and even economic data), while other techniques require quantitative data. CBA and ROA work exclusively with economic data only. The availability of data (or the potential for providing monetary estimates of benefits) may therefore constrain the approach, or affect the application to sectors where valuation is challenging.

This also provides relevant information for the sequencing or complementarity of tools. It may be appropriate to use more qualitative scoping tools, such as MCA, early on in the process to identify promising options, followed by more detailed (economic) appraisal tools to look indetail at a smaller number of options, i.e. as one moves towards implementation.


Figure 3. Metrics used in Benefits Analysis.



Similarly, it may be possible to complement some of the more formal economic approaches (such as CBA) with tools that allow the consideration of qualitative information or issues that difficult to quantify (e.g. environmental or social, equity, acceptability).

Second, the nature of the climate information available may also affect the applicability of the tools. Again, tools such as MCA and AHP can work with very general climate (risk) information, whereas quantitative focused tools need more detailed model outputs to allow quantification of benefits. Tools such as RDM (and IAM) are more suitable where there is deep uncertainty (or high climate uncertainty), as compared to tools such as ROA or PA which require probabilistic climateinformation (or probabilistic like assumptions).


Figure 4. Climate information Needs.



Table 3. Inputs, Benefit Metric and Resource / Expert Requirements.

Decision
Support Tool
Input requirementsBenefit MetricsResources /
expertise
Cost-Benefit
Analysis
  • Individual scenario and climate model
    outputs.
  • Baseline damage costs from scenario-
    based IA. Quantitative adaptation
    effectiveness.
Economic
(monetary).
Medium.
Cost-
Effectiveness
Analysis
  • Scenario and climate model outputs and
    often baseline damage costs.
  • Effectiveness as reduction in impacts (unit /
    total).
Quantitative (but not
economic).
Medium.
Multi-criteria
analysis
  • Qualitative or quantitative information on
    climate change.
  • Effectiveness through expert input or
    stakeholder consultation.
Qualitative,
quantitative or
economic.
Low – Medium.
Real Options
Analysis
  • Probability or probabilistic assumptions for
    climate (multiple scenarios) and decision
    points.
  • Baseline damage costs and adaptation
    effectiveness.
Economic
(monetary).
High.
Robust
Decision
Making
  • Multi-model scenario and climate model
    outputs (more the better).
  • Formal approach requires uncertainty
    information for all parameters.
Quantitative or
economic.
High.
Portfolio
Analysis
  • Probability or probabilistic assumptions for
    climate (multiple scenarios).
  • Variance and covariance of each option.
Quantitative or
economic.
High.
Adaptive
Management /
Adaptation
turning points
  • Sets of scenario and climate model outputs,
    but flexible.
  • Threshold levels for risks.
Quantitative or
economic.
Medium – High.
Analytic
Hierarchy
Process
  • Qualitative or quantitative information on
    climate change.
  • Effectiveness through expert input or
    stakeholder consultation
Qualitative,
quantitative or
economic.
Low – Medium.
Social Network
Analysis
  • Stakeholder consultation (qualitative)
  • Survey data and software analysis
    (quantitative)
N/ALow (Qual.)
High (Quant.)


Table 4. Potential Applications of the Tools to Adaptation.
Decision
Support Tool
Potential applicabilityMost useful whenPotential uses
of approach
Cost-Benefit
Analysis
Short-term assessment,
particularly for market sectors.
  • Climate probabilities known.
  • Climate sensitivity small
    compared to costs/benefits.
  • Good data exists for major
    cost/benefit components.
Low and no regret option
appraisal (short-term).
As a decision support tool within
iterative risk management
Cost-
Effectiveness
Analysis
Short-term assessment, for
market and non-market sectors.
Particularly relevant where clear
headline indicator and dominant
impact (less so cross sector).
  • As for CBA, but for nonmonetary
    metrics;
  • Agreement on sectoral social
    objective (e.g. acceptable risks
    of flooding).
Low and no regret option
appraisal (short-term).
As a decision support tool within
iterative risk management.
Multi-criteria
analysis
Project and policy (programme)
level. Tool for appraising option,
or complementary tool (e.g. to
CBA) to consider qualitative or
non-market elements.
  • Mix of qualitative and
    quantification data.
Scoping of potential options.
Early analysis of uncertainty or
other adaptation characteristics
of options.
Complementary tool to address
non-market / non-monetary
attributes.
Real Options
Analysis
Major project based analysis.
Short-term assessment including
long-term uncertainty.
Comparing flexible vs. non
flexible options, or value of
information.
  • Large irreversible capital
    decisions.
  • Climate risk probabilities known
    or good information.
  • Good quality data for major
    cost/benefit components.
Economic analysis of major
investment decisions, notably
major flood defences, water
storage, particularly where
existing adaptation deficit,
potential for learning and/or
potential for flexibility within
project.
Robust
Decision
Making
Project and programme/
strategy analysis especially under
conditions of high uncertainty.
Near-term investment with long
life times (e.g. infrastructure)
  • High uncertainty of climate
    change signal.
  • Mix of quantitative and
    qualitative information.
  • Non-market sectors (e.g.
    ecosystems, health).
Identifying low and no regret
options. Testing near-term
options or strategies (e.g. infrastructure)
across a large number
of futures, or climate projections.
Comparing technical and nontechnical
sets of options.
Portfolio
Analysis
Project based analysis of
combinations of options,
including potential for project
and strategy formulation.
  • Adaptation actions likely to be
    complementary in reducing
    climate risks.
  • Climate risk probabilities
    known or good information
Designing portfolio mixes as part
of iterative pathways.
Adaptive
Management /
Adaptation
turning points
Project and strategy /
programme level. To develop
adaptation pathways that allow
iterative plans.
  • High uncertainty.
  • Clear risk thresholds and
    indicators.
Flexible, but especially mediumlong-
term where potential to
learn.
As an overall iterative framework,
within which additional decision
support tools used.
Analytic
Hierarchy
Process
Project and policy (programme)
level.
  • Mix of quantitative and
    qualitative information.
  • Mix of qualitative and
    quantification data.
  • Need for consensus building.
Scoping of potential options.
Early analysis of uncertainty or
other adaptation characteristics
of options.
Social Network
Analysis
Project to national level for
adaptive capacity, socioinstitutional
aspects and
identifying barriers to adaptation.
  • Adaptation decisions involving
    many different stakeholders.
Analysis of adaptive capacity,
information and knowledge
flows, decision frameworks.

Third, there some differences in the relevant time periods for application, i.e. between short- and longer-term analyses. The low consideration of uncertainty in conventional CBA and CEA makes them less applicable for longer-term analysis where climate uncertainty is important. Conversely, tools such as RDM, ROA, IAM and PA have the potential to look at both short and longer-term aspects, because they incorporate such aspects.

Finally, many of the new methods that work with decision making under uncertainty (ROA, PA, and to a lesser extent, RDM and IAM) are resource intensive and technically complex. This is likely to constrain their formal application to large investment decisions or major risks, or as part of more detailed appraisal analysis. However, the conceptual aspects for addressing uncertainty in these approaches can be used in ‘light-touch’ approaches, allowing a wider application in qualitative or semi-quantitative analysis. This can include the use of decision trees from ROA, the concepts of robustness testing from RDM, the shift towards portfolios of options from PA and the focus on evaluation and learning from IRM.