Economics for practical adaptation decision making

Mr Martijn Gough1, Mr Simon Hone1

1Aither, Melbourne, Australia


Assessing adaptation options is challenging. First, there are frequently an enormous number of potential mitigation options and combinations of options. Second, there is substantial uncertainty regarding future changes to the climate, particularly at regional and local levels. Such uncertainty makes estimating the benefits of coastal adaptation options and choosing the right time to implement them challenging.

As a result of these complexities, many adaptation plans only weigh the costs and benefits of one or two options and only evaluate these options against a small number of possible future scenarios. The failure to account for important complexities leads to a range of suboptimal outcomes, including:

  • not taking actions that should be taken, often because investors cannot be convinced of the genuine benefits of investment or the beneficiaries cannot be identified
  • taking actions that should not be taken, frequently imposing significant costs today without the prospect of sufficient benefits in the future.

We propose an improved approach that can provide decisions makers with the information and confidence they require to make sound investments of the right scale at the right time.

Combining Benefit Cost Analysis (BCA) with a robust decision making draws on well-established approaches to decision making under uncertainty, which helps to develop adaptive pathways comprised of suites of measures that can be triggered and refined over time to respond to conditions as they evolve. This will often lead to better outcomes than prescriptive solutions that are limited to a single measure addressing a single future.


Martijn Gough is a public policy expert that is known for his ability to apply economic frameworks to policy problems and translate complex issues into concise and relevant stories.

Over his career, Martijn has built extensive knowledge of climate change adaptation policy and economics.

 Martijn has works on a number of coastal adaptation projects both in Australia and internationally during his time at the United Nations Development Programme. This experience has given him a unique insight into the strengths, capability and decision making processes of coastal managers.