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Economic Analysis of Climate-Proofing Investment Projects

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  • Asian Development Bank (ADB)
  • Asian Development Bank (ADB)

    (Sustainable Development and Climate Change Department, ADB)

  • Asian Development Bank (ADB)

    (Sustainable Development and Climate Change Department, ADB)

  • Asian Development Bank (ADB)

Abstract

Climate change represents an increasing threat to the continued development of the people, preservation of ecosystems, and economic growth of Asia and the Pacific. Mainstreaming climate risk management in all aspects of development is thus key to an effective transition to climate-resilient development pathways. ADB’s climate risk management framework aims to reduce risks resulting from climate change to investment projects in Asia and the Pacific. A key step in this framework is the technical and economic valuation of climate-proofing measures. This report describes the conduct of the cost-benefit analysis of climate proofing investment projects. An important message is that the presence of uncertainty about climate change does not invalidate the conduct of the economic analysis of investment projects, nor does it require a new type of economic analysis. However, the presence of uncertainty does require a different type of decision-making process in which technical and economic expertise combine to present decision makers with the best possible information on the economic efficiency of alternative designs of investment projects.

Suggested Citation

  • Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB), 2015. "Economic Analysis of Climate-Proofing Investment Projects," ADB Reports RPT157588-2, Asian Development Bank (ADB).
    • Handle: RePEc:asd:wpaper:rpt157588-2
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    References listed on IDEAS

    as
    1. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, January.
    2. Evelyn L. Wright & Jon D. Erickson, 2003. "Climate variability, economic adaptation, and investment timing," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 3(4), pages 357-368.
    3. Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
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