A major priority is to include adaptation into economic project appraisal of large infrastructure investments, because of the long life‐times and high exposure to future climate change. This includes existing planned investment (risk screening), but also new future investment specifically designed to respond to climate change, recognising the need to consider uncertainty for both.
This case study will look at two cases of large infrastructure developments; including flood protection in Prague, Czech Republic and urban development in Bilbao, Spain.
Objectives
The key objective of this study is to assess adaptation costs, benefits and the associated uncertainties for large capital investments in infrastructure.
Outputs
The study will set up a modeling cascade that comprises climate change datasets, hydrological and impact modeling techniques to include impact uncertainty, to assess the benefits of adaptation in terms of avoided damages, and the costs of the investments.
These outputs will constitute the basis for rational decision-making on investments under future uncertainties. The results from the two cases will be transferred to the national/ regional/ EU context, and guidance will be provided for appraisals of adaptation projects in climate change contexts, based on the case-study experience, and on expert knowledge.
Fig.1 - Representation of the dependency of the Expected Shortfall on the expected growth of damages, due to climate change and economic growth, and on the discount rate. It shows the decrease of Expected Shortfall with the adaptation investment in the Zorrotzaurre district of Bilbao (Island case), as compared to the no-adaptation scenario (Peninsula case).
Deliverables
D6.1) Report: Policy and decision context of case studies: The detailed context for the two selected case studies on project appraisal will be synthesised and reported. (Month 14)
D6.2) Report: Description of adaptation options and their costs and benefits. (Month 18)
D6.3) Report; Description of uncertainties associated with planned investments and incorporation in decision rules: Uncertainties in the case study contexts of adaptation project appraisal will be reported as inputs to decision analysis. (Month 24)
D6.4) Report: Policy recommendations, lessons learned and guidance: Findings and guidance that result from the project appraisal case studies will be reported. (Month 30)