Climate change is increasing the risk of sea level rise, storm surges and extreme rainfall. This, combined with increased urbanisation and intensified land use, leads to significant socio-economic costs in terms of damages to infrastructure and houses, as well as severe public health risks. Implementing Nature Based Solutions (NBSs) to adapt to a changing climate rather than the standard “grey” solutions, can not only address the core problem, but also provide significant social benefits for public health, biodiversity, and Ecosystem Services (ES) such as carbon sequestration and water purification.
Upon deciding how to adapt to a specific threat occurring from sea-level rise, storm surges, and extreme rainfall, the social costs of all adaptive measures should be compared to their social benefits in a Cost Benefit Analysis (CBA) to identify measures which provide the highest net benefits. A CBA seeks to identify all positive and negative impacts of a measure (or project/ policy) to all stakeholders affected in a society (usually at the national level) and monetise these impacts to provide a comprehensive assessment of the social costs and benefits. While most of the cost components, as well as benefits in terms of avoided damage to infrastructure and buildings, can be valued by market prices; external effects on public health, biodiversity and ESSs lack market prices (or market prices reflect only parts of their value) and are often listed as non-priced impacts. However, for CBAs to be an effective decision-making tool the number of non-priced impacts should be minimized. In the evaluation of NBSs for climate adaptation, this means that the externalities should be monetised for a comprehensive monetary assessment also of that these measures provide. This project, funded by the Nordic Working Group for Environment and Economy (NME), explores how the inclusion of monetised values for impacts on identified ESSs can affect the CBA outcomes and thus influence the decisions regarding NBS implementation.
In the project we identify ESSs from six implemented NBS in the Nordic countries and apply a method for a benefit transfer method to monetise their benefits based on an extensive literature search on economic valuation studies on ESSs.