Lessons from the dismal science (economics)

Charlton-Henderson S1, Binney J1

1Natural Capital Economics


Economics is a useful toolkit for assessing the costs, benefits and risks of coastal hazards and coastal hazard adaptation. Cost-benefit analysis (CBA) is the tool of choice for assessing the viability of interventions and prioritising options based on their outcomes. However, there are many aspects of coastal hazard risk and adaptation that are difficult to capture using the CBA approach. This calls for considered thinking around the way we apply and interpret CBAs, as well as the need to find alternative approaches for quirky situations that cannot be captured quantitatively within a CBA framework. These alternative approaches can include:

• Studying the implications of loss of access
• Considering the potential for ecosystems to migrate
• Using threshold analysis for situations where frequency or likelihood was not able to be modelled
• Comparing non-infrastructure options such as nature-based or planning options

We present a summary of the lessons learned from applied experience in incorporating robust economics into coastal hazard assessments. Through a number of case studies, these lessons demonstrate the utility of economics and provide insight into the understanding of coastal risk for prioritization of coastal hazard adaptation strategies. Furthermore, it informs how policies can be used to share the economic burden of implementation across stakeholder groups.


Located in Brisbane, Jim is a Director of Natural Capital Economics and a resource and environmental economic practitioner with over 25 years of experience. Jim is one of the most experienced economists nationally in the integration of environmental values into mainstream economic decision making and investment, having undertaken over 220 consulting projects. Cost-benefit analysis, cost-effectiveness analysis, and non-market valuation are tools used in most of his projects. Jim has led economic studies of coastal hazards in Australia and Fiji, flood studies, and valuation of natural capital using an ecosystem services approach. Prior to commencing his consulting career in 2006, Jim was the Director of Economics for the Department of Natural Resources in Queensland Australia.