NOAA Economic Framework - What Will Adaptation Cost?
Developed by the National Oceanic and Atmospheric Administration (NOAA), this framework was designed to help coastal communities evaluate the costs and benefits of different adaptation strategies. The framework walks users through a four-step process for evaluating and monetizing risks from sea-level rise, and for calculating the costs and benefits of various strategies. The report cross-references tools and spatial data that can be used to apply this framework in a user's own local jurisdictions. Case studies demonstrate how different jurisdictions have undertaken unique approaches to the analysis recommended in the framework. The framework also provides flexibility that allows decisionmakers to adapt their approach based upon available data, and the sophistication of the analysis that is needed and feasible. This resource is one of many offered through NOAA's Digital Coast tool.
Step 1 - Understand Baseline Risk: At this stage, users are guided through the process of how to identify sea-level rise scenarios; how to choose a planning horizon and time frames of interest to the community; and how to calculate local increases in sea-levels. Then users are guided to develop a high-water-level event scenario that assesses increases in flood levels during extreme events with increased sea levels. Finally, the framework provides guidance on how to evaluate assets that will be exposed to flood damage or loss if no action is taken - including private property and public infrastructure.
Step 2 - Identify Adaptation Options: In this step, users identify the adaptation options that they want to explore for reducing flood risks. The costs, effectiveness, and implementation barriers to each option should be considered. Different "action scenarios" are developed of one or more adaptation strategy for reducing risks. Each of these action scenarios is then evaluated to determine how they will help to reduce flood impacts.
Step 3 - Calculate Costs and Benefits: After determining exposure of both the no action and action scenarios, users are guided to monetize (estimate a dollar value) of the impacts under each scenario. The framework helps users evaluate primary, secondary and environmental impacts from flooding. Primary impacts include economic costs from loss or damage to assets. Secondary impacts include things like business interruption costs, lost tourism revenues, and emergency response costs. Environmental impacts include loss of ecosystem services. The framework provides additional guidance for evaluating the impacts of different adaptation options (e.g., sea walls may have impacts to beaches and tourism revenues). At this stage, users are provided tools for estimating the capital and maintenance costs for implementing different adaptation strategies.
Step 4 - Make a Decision: Users are guided through processes to help them evaluate the total costs and benefits of various adaptation options or action scenarios. An impact assessment is used to evaluate the flood-risk reduction benefits of different options in terms of economic losses avoided under different sea-level rise scenarios. The damage, probability, and consequence of storm events are each considered as well. Timelines are developed to show the expected annual losses each year as compared to the no-action scenario. Capital and maintenance costs are estimated to determine how much it will cost to implement different adaptation options. Discount rates are applied to determine the present value of investing in adaptation options. Each action scenario is ranked based upon the benefit to cost ratio. The framework also provides guidance on how to consider non-economic benefits both qualitatively and quantitatively.
Additional Appendices provide resources, tools, and data sources for completing stages of the analysis:
- Appendix A - Adaptation Strategies: Includes tools, resources, and fact sheets for identifying assorted coastal adaptation strategies.
- Appendix B - Monetizing Impacts: Includes approaches and tools for evaluating and monetizing flood losses, with guidance on the level of expertise and effort needed to apply each approach.
- Appendix C - Case Studies: Provide tables of different case study examples organized by geographic area and keywords.
Publication Date: June 2013
- Assessment guide