Technical Policy Briefing Notes - 2
Cost-Effectiveness Analysis
Case Studies
Policy Briefs
Cost-Effectiveness Analysis
Case Studies
The MEDIATION study has applied CEA to a
number of adaptation case studies, as well as reviewing existing
literature examples. A number of these case studies are summarised in
the box below.
Box 3. Case Studies
Boyd et al (2006) undertook a detailed application of cost-effectiveness analysis for the South-East of England, looking at the impact of climate change (including potential scenarios of reduced precipitation) and socio-economic growth (increased demand) on water resource zones and the potential adaptation response to address household water deficits. The
study undertook detailed basin modelling for the water catchment (Wade et al, 2006) and assessed baseline 30-year average household water deficits in three future time periods (2011-2040, 2041-2070 and 2071-2100) for four separate climate-socioeconomic scenarios.
The cost of addressing the projected water deficits was analysed through a cost-effectiveness analysis, looking at a range of options for managing public water supply (including options that reduced demand and options that increased supply). Detailed cost-yield curves (cost-effectiveness curves) were produced to estimate how to eliminate the household water deficit at minimum cost, providing cost curves for each scenario, for each of the three future time periods in an inter-linked analysis. This addresses many of the issues raised above, by working with multiple projections and multiple time periods. An example of one of the cost curves is presented below.
Source: Boyd et al (2006)
Boyd et al (2006) undertook a detailed application of cost-effectiveness analysis for the South-East of England, looking at the impact of climate change (including potential scenarios of reduced precipitation) and socio-economic growth (increased demand) on water resource zones and the potential adaptation response to address household water deficits. The
study undertook detailed basin modelling for the water catchment (Wade et al, 2006) and assessed baseline 30-year average household water deficits in three future time periods (2011-2040, 2041-2070 and 2071-2100) for four separate climate-socioeconomic scenarios.
The cost of addressing the projected water deficits was analysed through a cost-effectiveness analysis, looking at a range of options for managing public water supply (including options that reduced demand and options that increased supply). Detailed cost-yield curves (cost-effectiveness curves) were produced to estimate how to eliminate the household water deficit at minimum cost, providing cost curves for each scenario, for each of the three future time periods in an inter-linked analysis. This addresses many of the issues raised above, by working with multiple projections and multiple time periods. An example of one of the cost curves is presented below.
Source: Boyd et al (2006)
Case Study 2: Cost-effectiveness
analysis for biodiversity in Finland (MEDIATION)
Semi-natural grasslands and wooded pastures are among the most species-rich habitats in Finland and include numerous red-listed species. However, intensification of agriculture and abandonment of traditional management practices have reduced the area of valuable grasslands and their biodiversity. Climate change is projected to cause additional challenges, as species may need to shift their ranges to follow the changes in climatically suitable areas. However, the success of species moving to new areas depends on their dispersal ability and the availability of suitable habitats.
The Mediation case study investigated thee impacts of climate change on grassland biodiversity through a case study on grassland butterflies, which are a key indicator species group as well as having a high amenity value. The study compared the sufficiency of habitat in the areas projected to be climatically suitable in the future or where ecological corridors might be constructed to aid dispersal, and then considered alternative adaptation options to enhance grassland biodiversity in Finland under a changing climate.
The analysis first looked at future bio-climatic envelopes to explore which areas would be simultaneously suitable for various species, considering a range of climate outputs and a series of different modelling methods to explore their uncertainty. The model predictions show large variations in the suitable areas for many species, (see figure below), as a consequence of different modelling methods and climate scenarios being used. However, a common finding is that the current extent of grassland habitats in Finland is far lower than the target level estimate required to sustainably support current populations, as well as to secure species dispersal.
Figure 1. Projected suitability of future climate for the Parnassius mnemosyne butterfly averaged over the time slice of 2051-2080. The red colour indicates the most suitable areas.
The projections are based on bioclimatic envelope models developed with three different modelling methods (GAM, GLM, GBM) and five different climate scenarios.
The study then considered alternative conservation measures (adaptation options) which could maintain the biodiversity of Finnish semi-natural grasslands under a changing climate. Three major adaptation options were considered: agri-environmental scheme (AES) measures (which are already used in Finland), construction of ecological corridors, and species translocation. The results show that management of traditional biotopes by cattle grazing is the most efficient measure for butterflies, but when costs are taken into account buffer zones appear to be the most cost-effective AES measure.
Cost-effectiveness of Agri-Environmental Scheme Measures.
The analysis was complemented with a farmer survey to understand farmer attitudes to biodiversity conservation and how different factors affect farmers’ willingness to implement different AES measures, thereby providing useful complementary information on the attractiveness of management options and the possible barriers to implementation.
Source: Tainio et al. (2013).
Semi-natural grasslands and wooded pastures are among the most species-rich habitats in Finland and include numerous red-listed species. However, intensification of agriculture and abandonment of traditional management practices have reduced the area of valuable grasslands and their biodiversity. Climate change is projected to cause additional challenges, as species may need to shift their ranges to follow the changes in climatically suitable areas. However, the success of species moving to new areas depends on their dispersal ability and the availability of suitable habitats.
The Mediation case study investigated thee impacts of climate change on grassland biodiversity through a case study on grassland butterflies, which are a key indicator species group as well as having a high amenity value. The study compared the sufficiency of habitat in the areas projected to be climatically suitable in the future or where ecological corridors might be constructed to aid dispersal, and then considered alternative adaptation options to enhance grassland biodiversity in Finland under a changing climate.
The analysis first looked at future bio-climatic envelopes to explore which areas would be simultaneously suitable for various species, considering a range of climate outputs and a series of different modelling methods to explore their uncertainty. The model predictions show large variations in the suitable areas for many species, (see figure below), as a consequence of different modelling methods and climate scenarios being used. However, a common finding is that the current extent of grassland habitats in Finland is far lower than the target level estimate required to sustainably support current populations, as well as to secure species dispersal.
Figure 1. Projected suitability of future climate for the Parnassius mnemosyne butterfly averaged over the time slice of 2051-2080. The red colour indicates the most suitable areas.
The projections are based on bioclimatic envelope models developed with three different modelling methods (GAM, GLM, GBM) and five different climate scenarios.
The study then considered alternative conservation measures (adaptation options) which could maintain the biodiversity of Finnish semi-natural grasslands under a changing climate. Three major adaptation options were considered: agri-environmental scheme (AES) measures (which are already used in Finland), construction of ecological corridors, and species translocation. The results show that management of traditional biotopes by cattle grazing is the most efficient measure for butterflies, but when costs are taken into account buffer zones appear to be the most cost-effective AES measure.
Cost-effectiveness of Agri-Environmental Scheme Measures.
| AES Type | Total PVC | Effectiveness (Y) | CE measure (PVC/Y) |
| Environmental Fallow | 710 | 0,7 | 1014 |
| Buffer Zone | 944 | 1,16 | 858 |
| Traditional biotope | 2520 | 2,29 | 1096 |
The analysis was complemented with a farmer survey to understand farmer attitudes to biodiversity conservation and how different factors affect farmers’ willingness to implement different AES measures, thereby providing useful complementary information on the attractiveness of management options and the possible barriers to implementation.
Source: Tainio et al. (2013).
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