Author(s): Alexus Van Der Weyden; Liyana Fad’L
Linked Author(s):
Keywords: Resilience Adaptation Adaptive planning Water security Real options analysis Real options economics Climate change Drought Flooding Economics Valuation Social Cultural Environmental
Abstract: Protecting coastal regions may require high cost and largely irreversible ‘grey’ investment or urban form decisions. They may also provide significant value to the community. However, future conditions relating to sea levels, storm surge impacts, population growth and land-use are uncertain, raising the risk of "investment regret". Applied economic frameworks are often limited by overlooking the intangible benefits provided by ‘blue-green’ multi-functional investments, and the value of decision-making flexibility including ‘buying time or options’. Frontier Economics has developed an economic framework to both value the tangible and intangible economic, social, cultural and environmental benefits and costs of coastal protection investment, and by applying advanced techniques such as Real Options Economics to ‘high value-high risk’ decision-making of coastal protection, we can estimate the value of adaptive decision-making. As an example, we look at decision-making for building a permanent seawall for coastal flood resilience.
Year: 2025