Angry waves that eat the coast: An economic analysis of nature-based and engineering solutions to coastal erosion

Coastal areas in developing countries are very vulnerable to the effects of sea-level rise. Adaptation to sea-level rise through protection measures can include both engineering and nature-based solutions. However, comparative economic analyses across both types of solutions are sparse. Moreover, stated preference studies in developing countries that are commonly applied to estimate the benefits of adaptation projects increasingly include time payments as an alternative to money payments. The implications of this payment mode on policy recommendations remains unclear. In this study, we conduct cost-benefit analyses (CBA) that incorporate the results of discrete choice experiments with money as well as time payments for both an engineering (groynes) and a nature-based (beach nourishment) solution. We provide a range of sensitivity analyses regarding discount rates, effectiveness of the measures, cost estimates and different projections in the benefit calculations. These quantitative CBAs are complemented by qualitative insights from focus group discussions. We find overall negative net present values of both engineering and nature-based erosion solutions when money payments are applied, but positive values when time payments are applied. Qualitative insights describe the disruptive effects of erosion on local livelihoods. The qualitative results combined with previous studies’ results provide support for the use of the time payment results. Furthermore, our results indicate that nourishment has a larger positive effect on welfare than groynes. These results provide relevant insights for decision-makers regarding coastal adaptation and stated preference practitioners in developing countries regarding the use of time payments.