ALM UNDP

Summary:

This paper provides guidance to policy-oriented researchers' work on valuing climate change adaptation in developing countries. Its objective is to indicate some issues that may be useful to consider when designing studies to value the impacts of climate change in practice in developing countries. Practitioners are well advised to consider also the huge existing literature on climate change adaptation and on valuation.

Key points

Adaptation to climate change needs to be seen as an integral part of a country’s development planning, rather than as a separate issue, and adaptation measures that lead to better overall development outcomes are preferable to ones that focus exclusively on adapting to climate change impacts while ignoring other stresses. As part of this mainstreaming, economic evaluation of alternative adaptation measures should entail cost/benefit analysis (broadly defined) of those measures, relative to a baseline that includes the effects of climate change if no adaptation is carried out. All other development planning should also include the effects of climate change as a baseline, rather than assume a false status quo scenario. Evaluation methods that implicitly compare adaptation measures with an imaginary baseline where climate change is not taking place run the risk of biasing policy towards less costly adaptation, or towards not carrying out adaptation measures at all, rather than towards those measures that yield the highest net benefits. Thus, such methods should be used only with great care. Governments and policymakers cannot consider their own adaptation measures in isolation; they need to incorporate the fact that their policies will affect the behaviour of firms and households, and include estimates of these changes in behaviour when they compare the effects of different adaptation measures. Impacts on agriculture are likely to be an extremely important part of the overall impact of climate change in developing countries. In many developing countries, own production of food is still an important part of farming, making economic analysis complicated.

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