In the previous step, you identified a suite of adaptation options that may be suitable for addressing the climate change risks faced by your organisation.

In this step you will investigate these options and to determine which should be funded. This involves evaluating each option’s potential to deliver the intended benefits and identifying any risks of maladaptation. You should also consider which options, or components of an option, can be implemented within the available funding.

Note that you can potentially stage the implementation of your selected option by developing a suite of ‘actions’, which can be sequenced by identifying thresholds that, when reached, trigger the implementation of a particular action.

Evaluating and comparing adaptation options begins with establishing a set of decision criteria. These criteria should be informed by various factors, including the level of risk that will be accepted by your organisation, stakeholders, and community.

Understanding the level of risk your organisation, stakeholders, and community are willing to accept is a crucial part of evaluating climate change adaptation options.

Your organisation may have already defined what risks are acceptable or unacceptable in an organisational risk register or similar document. Although an organisational risk register tends to be broad in scope – i.e. not specific to climate change – it might provide you with a general understanding of the risk tolerance of your organisation. However, it is important to know the original rationale for the risk register as these objectives will have shaped the register’s scope and detail (and therefore its relevant to climate adaptation planning. Note that high level organisational risk assessments tend to not be sufficiently detailed for climate change adaptation decision-making. This means you need to do a more detailed analysis at your scale of interest.

For example, an existing risk assessment may have been developed as a:

• voluntary corporate sustainability commitment
• requirement to meet an insurance obligation
• regulatory reasons or as part of a government-funded program.

If climate change-relevant risks have been identified in the organisational risk register, you should (where possible) use these risks to underpin selection of adaptation options. If such risks are not included in the register, you should seek to understand the level of risk that is acceptable to your organisation.

For example, an organisation may be quite comfortable operating with a risk of 1-in-100 year flood affecting its premises, but if the flood risk frequency increases then will invest in flood risk reduction

However, another organisation might calculate that the losses resulting from a 1-in-100 year flood are significant for their operation: they may wish to reduce that risk to a probability of 1 in 1,000 year event by investing in adaptation options ((see Box 1 for a case study).

The degree to which you need to address climate change risk depends on your exposure to current and future climate risks, and on the amount of risk that will be accepted or tolerated by your organisation, stakeholders and community.

As discussed in Step 3: Identify Options, one potential option is to ‘do nothing right now’ and ‘let nature take its course’. This is a valid option, and if it is considered and adopted, it should be clearly documented. At a minimum, you should record the decision-making process that led to this selection as well as the rationale behind it.

This documentation should also outline a process to indicate what will be required to prompt action in future (e.g., threshold or trigger events, new information) and how these would be determined and measured or monitored.

The extent to which you need to act now will depend on the risk to your organisation, and its stakeholders– both now and in the future – as well as the amount of risk (financial, legal, etc.) your organisation and community are willing to accept and tolerate.

In some cases, there may be limited benefit to implementing an adaptation option immediately. However, as climate changes and impacts intensify - such as reaching a specific level of sea-level rise – it may becomes necessary to implement adaptation options.

In assessing options, you will need to determine what is the required level of funding and the type and timing of effective stakeholder engagement to get a social licence to implement the actions. This will help to determine the trigger levels or thresholds that can be tracked (monitored). When the trigger levels are reached, they signal the need to begin to engage and move to implementation

It is important that climate risk and options are considered proactively, even if the decision is made to delay actions until a specific (or set of) threshold/s are reached that will trigger actions.

The plan would include a process for making the decision, for example by elected representatives, a management committee or board.

At this stage, it is important to refine the decision criteria that will help guide the process of evaluating adaptation options. These criteria can be selected in a various ways, depending on what best suits your organisation and its resources. They can be unilateral decisions made by an individual, or by a committee, or through wide engagement with internal and external stakeholders. Whichever approach is adopted, it is important to document the rationale for selecting that approach.

In general, the decision criteria selected will reflect the values of the organisation or stakeholders. These values can be shared or individual, and are likely to be quite diverse (social, cultural, economic, and ecological). This diversity makes it challenging to integrate theses values into a decision process

Broad categories of decision criteria that can be used in adaptation option assessments include the:

• importance and relevance of the benefits of a given option
• benefits across different time scales – are there immediate as well as long-term benefits?
• potential of co-benefits and opportunities – will the option achieve outcomes in other areas apart from climate change (e.g., improve community and ecosystem health, provide opportunities for business)?
• extent to which it can minimise negative impacts on other activities
• impact on greenhouse gas emissions – will the option increase emissions, and thereby have a long-term negative impact (undermine climate goals)?

Not all options require a comprehensive evaluation. Some options may be easy to rule out through an initial screening approach because they contravene certain requirements.

An initial screening approach can be guided by a series of questions about each option.

• Does the option contravene local, state or Commonwealth legislation or policies? If so, the option may be rejected now, but can be revisited at a later stage if the legislation or policy changes. In some cases, it might be necessary to lobby for legislation and policy reform.
• Are stakeholders likely to be negatively affected if the option is implemented? If so, how many, when, where?
• Could stakeholders perceive they may be negatively affected (if the communication about the option is not timely or clearly)?
• Is the option likely to be effective in addressing the specific climate change impact?
• Would implementing this option cut out or limit other future options?
• Are there other obvious impacts of the option on other priorities or activities that are important to the organisation or its stakeholders?
• What is the lifespan of the option? Does it match your business' planning horizon or long-term strategy?
• Are there other co-benefits associated with the option?
• Will the option reduce the risk to a level considered to be acceptable by your organisation?

It is important to engage with the community and stakeholders during this screening process. It is best to work through relevant existing community groups, networks or sectors. This can help to limit concern or discontent, and help build support for adaptation plans particularly for options that may appear controversial

See Box 2 for an example of collaboration engagement

At this stage, you have short-listed a series of options that are broadly acceptable to your organisation, its stakeholders and the community. The next step is to consider which of these options best aligns with your adopted decision criteria (i.e., is it cost effective, does it maximise benefits to your organisation, does it minimise impact on other sectors, etc.).

There are several methods available to support this comparison, including (but not exclusively):

• cost-benefit analysis
• cost-effectiveness analysis
• cost-minimisation
• multi-criteria analysis.

Each method has its own assumptions, strengths and limitations. It is also important to be aware of any government requirements in your jurisdiction that may influence what methods are used. Many guides and tools are available to help apply these methods, however they generally require significant expertise and may need to be outsourced to a consultant.

There is a range of tools that help to understand the implications, and interactions between different management options: they can also help identify unintended consequences.

EXPLORE: the Catalogue of adaptation support tools that can assist with this step

When selecting decision criteria for assessing adaptation options, it is important to consider social and environmental factors alongside standard economic factors.

EXPLORE: methods to help evaluate options and consider environmental and social-cultural values in Section 3 of Information Manual 4: Costs and benefits.

Implementation of these assessments depends largely on the methods chosen for comparison, options that are included for comparison, and decision criteria that are finalised for the analysis. It can be done through one process, or a combination of processes, including participatory approaches (to understand community preference and priorities), and scenario generation and modelling (to understand how an option may perform when implemented), just to name a few.

The implementation of these assessments will depend on the comparison method chosen, options included in the analysis, and decision criteria applied.

This process can be undertaken through a single method or a combination of approaches, such as:

• participatory processes to understand community preferences and priorities,
• scenario generation and modelling to explore how options may perform under different future conditions. exampes ????

It is important that you continue to involve stakeholders and community throughout this step.

This will be helped if you established a clearly defined engagement strategy early in the adaptation planning process.

In addition to engaging with the broader community, you should consider how you will work with advisory committees and other formal groups that may have been established for climate change adaptation, as well as with any existing committee in your organisation.

Not engaging effectively with the community, or other relevant stakeholders, can have significant implications: it can result in a selection of options that have unintended of unacceptable consequences for certain groups or areas; or its can result in a lack of community support, which can hinder implementation.

Decision making for climate change adaptation decision includes a high degree of uncertainty.

These uncertainties stem from a range of factors, including:

• future emissions – uncertainty around which greenhouse gas scenarios will unfold
• climate impacts – how emissions interact with climate systems and drive change
• social-economic shifts – global changes in economy, population, and governance
• technological advances – unknown future solutions, costs, and community acceptance.

There are a range of tools and approaches available to help with decision-making under uncertainty. Some of these tools and approaches include Valuation and Applying a pathways approach.

These can help you to consider different uncertainties and help to determine the most appropriate time when you need to act to implement a given option).

Using these tools can help avoid premature investment in costly measures, allowing action to be taken only when necessary.

Information Manual 4: Costs and benefits).

Once you have evaluated your shortlist of options and identified those that meet your decision criteria, the next step is to prioritise and sequence actions to implement your selected option.

One effective method for sequencing is a pathways approach

This is a flexible, long-term planning method that allows adaptation strategies to evolve as climate change impacts evolve. Instead of committing to a single solution, it identifies multiple options that can be enacted over time as conditions change.

A key feature is decision thresholds, where adaptation actions shift when risks — such as sea level rise or storm surges — exceed acceptable levels and trigger a shift in action. This approach ensures cost-effective, adaptable solutions that enhance coastal resilience over the long term.

For example:

• A council may begin with replanting dune vegetation in partnership with a local community group. At a point, this may become insufficient and so the council may implement beach nourishment and dune restoration. If risks escalate, it may be necessary to protect the community through building seawalls or facilitate managed retreat if appropriate.
• A marina may first elevate infrastructure and then if flooding worsens, may relocate assets if flooding worsens. This approach ensures cost-effective, adaptable solutions that enhance coastal resilience over the long term.

Supporting a pathways approach, sequences of actions should be combined with a series of triggers or thresholds (see Box 3 for definitions) which help identify when a particular action should be implemented.

The timing of actions must consider the minimum lead time required for community and stakeholder consultation and engagement: and also the time required to secure funding and to plan and implement the activities.

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Whether you're seeking endorsement for your adaptation plan or funding to implement a specific option, preparing a business case is essential. This process can be challenging, as adaptation outcomes often take time to materialise and may involve complex, non-monetary benefits that are difficult to quantify.

Seven key elements were identified through a review of business cases for adaptation (Hales et al. 2016).