Cost-benefit analysis (ACB) of climate change adaptation measures in the Brazilian semiarid region

Cost-benefit analysis (ACB) of climate change adaptation measures in the Brazilian semiarid region

The greater frequency of extreme climatic events in Brazil, such as droughts in the Northeast and Southeast and floods in the Amazon region, as well as their social, economic and environmental consequences, demonstrate the relevance and need to deepen analyzes and tools aimed at greater resilience and capacity response to increasing climatic variability.

For some river basins, the need for adaptation is latent. This is the case of the Piancó-Piranhas-Açu River Basin, located between the Paraíba and Rio Grande do Norte backlands and which was immersed in a severe drought between 2012 and 2017. The region experienced, and still lives, social difficulties and serious economic losses due to the absence of rain and the consequent scarcity of drinking water. Due to the commonly critical levels of storage in the main reservoirs, the population remains vulnerable and, in many cases, dependent on water trucks.

Illustrating well the challenge of the semiarid region, this area is considered to be one of the most susceptible in Brazil to the effects of global climate change, a reflection of the new challenges imposed by climate change. Thinking about adaptation measures is fundamental in the current context, especially for the regions most exposed to risk. In this sense, the National Water Agency (ANA) hired FGVces in 2015 to develop a Cost-Benefit Analysis (ACB) of potential adaptation measures in the Hydrographic Basin of the Piancó-Piranhas-Açu Rivers.

Piranhas-Açu river in Rio Grande do Norte (crédito: Fábio Pinheiro/Flickr - CC BY 2.0)

Through an analysis of current and future climatic conditions, and their hydrological and economic impacts, the study assesses the economic loss resulting from the failure to consider climate change in regional water planning, subsequently assessing the economic feasibility of potential adaptive measures.

Throughout 2016, the first two stages were developed, which consisted of estimating the lack of water in the basin over a 50-year horizon, defining the Physical Risk, and the economic loss associated with such scarcity, the Total Climate Risk. The main elements of these steps, as well as the results obtained, are further down on this page.

Then, in 2017, the study entered a new phase, in which several adaptation measures were proposed with different focuses of action. Each measure carries a potential water benefit and associated feasibility cost. The final objective was then to assess the relationship between these two parameters, thus obtaining the Cost-Benefit Ratio for each measure. Results of this nature are powerful tools to assist in more conscious decision-making in relation to climate change, bringing greater resilience to the basin in the future. Below you can access the report with the description of the adaptation measures considered and the results of the ACB.

Each of these steps involved different elements for its constitution. Specific steps of the ACB demanded distinct and unique methodologies, which are detailed in the appendices that accompany each report, being the set of products presented below.

Report on the Characterization of the Total Climate Risk of the Basin in User Sectors
Includes appendices: "Composition of Consensual Climate Scenarios: Future Flow Series", "Future Water Demands", "Simulations of Water Allocation in the Basin from a Decision Support System (AcquaNet)" and "Estimation of Economic Losses".

Report on Cost-Benefit Analysis of Adaptation Measures
Includes appendices: "Result Sheet for Adaptation Measures" and "Beyond ACB: Exploratory measures".

In addition to these reports, which expose the entire process of designing and carrying out an ACB for adaptive measures, auxiliary documents were produced with the function of providing a greater conceptual basis for the process, they are:

Report on Deepening the Understanding (Scientific / Academic) of Measures and / or its Elements Considered Most Strategic - Volume I: Methods of estimating economic loss

Report on Deepening the Understanding (Scientific / Academic) of Measures and / or its Elements Considered Most Strategic - Volume II: Characterization of Possible Adaptation Measures

With the completion of the ACB, the relevance of further analysis was recognized and, thus, complementary activities were proposed, such as the calculation of the Total Climate Risk associated with drought between 2012 and 2017, the study of indicators to detail the influences of each measure, the evaluation of costs and benefits when implementing more than one measure at the same time and, finally, recommendations for water planning in the basin.

The three reports referring to the complementary activities conducted are below:

Total Climate Risk Characterization Report of the Basin based on User Sectors referring to the Current and Recent Drought

Report on the deepening of the results of the ACB: Analysis of Indicators
Includes the technical appendix "Refinement of premises for selected adaptation measures".

Evaluation report of the synergistic effects between measures and recommendations for the Water Resources Plan of the Piancó-Piranhas-Açu River Basin

Aiming at communicating the study and its results, a publication was prepared with the Project Summary, in which its main elements and conclusions are presented. Over ten pages, this document summarizes the essence of the efforts made in the two years of work, compiling its relevant contributions.


Cost-Benefit Analysis of Adaptation Measures to Climate Change: Application trajectories in the hydrographic basin of the Piancó-Piranhas-Açu rivers

The book summarizes the process and results of the study that set out to quantify the total economic value at risk over the next 50 years and to assess the extent to which potential adaptation measures would be effective in reducing the expected loss. In addition, the cost of the current water crisis that has been plaguing the region since 2012 was also calculated.

Click to access the publication


Agência Nacional de Águas (ANA)

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