Exploring valuation methods for climate adaptation options, with particular reference to Australian coastal councils

Valuation of adaptation options is crucial to appropriate adaptation decision-making. A range of valuation methods are available, including cost-benefit analysis, cost effectiveness analysis, cost utility analysis and multi-criteria analysis. A complete cost–benefit analysis requires the valuation of all project impacts, whether they are marketed or non-marketed goods. A number of valuation techniques can be used to evaluate non-marketed goods’ direct use and non-use values (option value, quasi option value, bequest value, existence value), with the tangibility decreasing from ‘use’ to ‘non-use’ values. Monetary estimates of the non-use values may be obtained using revealed preference methods like travel cost methods and stated preference methods such as, e.g., willingness to pay and willingness to accept. It is difficult for local government stakeholders to understand the contexts in which various valuation methods should be applied. In this report, as a guide for local government decision makers, we showcase three case study examples where different valuation methods have been applied.