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Compendium on methods and tools to evaluate impacts of, and vulnerability and adaptation to, climate change


Costing the Impacts of Climate Change in the UK
Description

This costing guidance describes a method for calculating the cost of climate impacts and explains how to compare these to the costs of adaptation measures.

Appropriate Use The proposed method is flexible enough to be applied across a wide range of scales from broad aggregated impacts on a sub-national region to well-defined disaggregated impacts on a particular receptor. The guidance is provided through two reports (Overview Report and Implementation Report), a series of case studies and a web-based spreadsheet tool (limited in terms of sectors and impacts scope). The Overview Report, including a specific set of case studies, is designed to provide guidance to the non-economists who need to commission and interpret costing studies, whereas the more detailed Implementation Report is aimed at providing guidance for economists who need to undertake these studies.
Scope

The guidance has been specifically developed for use within the UK, but could be further developed to work elsewhere. This would necessitate the development of costing matrices for the direct and knock-on effects of the identified impacts.

The web-based spreadsheet tool has also been specifically developed for use with in the UK. The principles and concepts of the methodology are transferable and can provide a framework for broader application. Sectors specifically supported through the provision of impact matrices include coastal zones, water resources, agriculture, and buildings and infrastructure. Impacts on non-market goods or services are difficult to value, and so the guidance includes individual guidance for valuing the impacts on habitat and biodiversity, human health, recreation and amenity, cultural objects, leisure and working time, and non-use benefits.

Key Output Specifically identified physical impacts are converted into monetary values and then, after calculating the resource costs of adaptation options, information is available to support the weighing up of the costs and benefits of the adaptation options towards choosing the preferred option. This assessment of adaptation options is seen to take place within a risk assessment framework that accounts for the risks and uncertainty (e.g., UKCIP risk framework).
Key Input Inputs include identifying and measuring (quantifying) climate impacts in physical units (e.g., through a climate impact assessment); impact valuations matrices that allow for the identification of costs/unit of direct impacts of climate change and knock-on (higher-order) effects. This includes both market price data that should be readily available. Also required are the values associated with impacts on non-market goods or services which result from conducting primary valuation studies. Also required are the costs of adaptation options such as those required to support a cost-benefit analysis.
Ease of Use The guidance, including the web-based spreadsheet version and case studies does provide the non-economist with the ability to obtain a preliminary understanding of the potential costs. It is intended, however, for an economist to undertake a more comprehensive assessment of the costs for a particular concern.
Training Required Training is required, including using this guidance in conjunction with a risk assessment procedure (e.g., UKCIP risk framework). For a more detailed analysis it is essential that an experienced economist be involved.
Training Available Training is not available at this time. The guidance and availability of case studies and the web-based spreadsheet version of the tool do provide a limited learning environment.
Computer Requirements The costing reports, case studies and web-based spreadsheet version are all available from the UKCIP website and are accessible using any web browser software. The web-based spreadsheet costing tool requires Microsoft Excel.
Documentation The costing reports, case studies and web-based spreadsheet version are all available from the UKCIP website:  http://www.ukcip.org.uk/resources
Applications

Case studies included with the report include: agriculture: the cost of not meeting irrigation needs; transport disruption: the cost of time lost due to short-term disruptions; water resources: the cost of increasingly stringent effluent standards; and flooding: the cost of flood alleviation.

Contacts for Framework, Documentation, Technical Assistance

Roger Street

Technical Director, UK Climate Impacts Programme; e-mail: roger.street@ukcip.org.uk or through enquiries at: enquiries@ukcip.org.uk; or Alistair Hunt, Metroeconomica Limited.

Cost There is no charge for access to this guidance. It is expected that users of this guidance (and all UKCIP tools) would provide feedback to UKCIP regarding the overall results, as well as comments and suggestions towards improving the guidance. Enhancing the scope of the guidance or developing it for use outside of the UK will necessitate developing the various matrices and costs information, including through primary valuation studies which could be relatively costly depending on the scope and ease of availability of the costing information.
References

Included with the guidance are case studies that demonstrate the use of the costing guidance. Metroeconomica carried out a study of the costs and benefits of climate change associated with different sectors.

This is one of the first studies to apply costing methods to sectors on a microscale. Details of this and other cross-regional studies are available on the Defra website at http://www.defra.gov.uk/environment/climatechange/uk/adapt/research.htm.
Final reports are available through the Defra research pages at http://www.defra.gov.uk/research/project_data/default.asp (search by "cross regional").


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