This stylized depiction of present-value benefits, costs and residual damage costs of adaptation (in 2016 dollars) assumes that the decision makers’ objectives are as follows: to reduce negative impacts and minimize the total cost of climate change, to cancel out all negative impacts through adaptation and to reduce residual costs to zero. a) Projected baseline scenario (estimated damage function with climate change), b) estimated present-value social costs of climate change under the baseline scenario with no new adaptation actions, c) estimated reduction in projected social costs with new adaptation actions (i.e., defines the present-value benefits of adaptation), and d) estimated net benefits of adaptation actions, once the lifecycle costs of actions are taken into account.
