This report describes the use of cost benefit analysis (CBA), an economic tool used to compare the benefits against the costs of a given project or activity. It highlights the use of CBA, which the author emphasizes, can prove particularly beneficial in a disaster/climate risk context. Firstly, CBA may help communities and local partners, as well as government, NGOs and donors, decide on program options by entering into a more robust process of weighing up costs and benefits of different interventions, both qualitative and quantitative. Secondly, risk reduction requires significant resources to be spent before a disaster, and the benefits are not always overtly obvious. CBA can provide a powerful tool for demonstrating the value of pre-emptive action and investment in risk reduction.
The report includes a brief synthesis produced by Tearfund and OXFAM America, that takes stock of the significant efforts on CBA, of community based disaster risk management, and climate change adaptation to date. The latter reflects on findings, methodological approaches, lessons learned, and also addresses the implications for where and when CBA may be usefully applied at a community level, and points to gaps and methodological constraints that could usefully be addressed going forward.
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