Climate-Adaptive Cost–Benefit Analysis Framework for Flood Protection Investment in Australia

Flooding poses an escalating challenge for Australia as climate change and urban expansion increase exposure to high-impact events. Structural defenses such as levees and dams remain central to national resilience, yet their economic justification depends on a robust cost–benefit analysis (CBA). This study examines how CBA is applied to flood protection projects in Australia through two contrasting case studies: (1) operational optimization of the Wivenhoe–Somerset Dam system in Brisbane; and (2) regional levee upgrades in Wagga Wagga, New South Wales. Both analyses demonstrate that a CBA provides a systematic framework for assessing investment efficiency, but that outcomes are highly sensitive to assumptions about flood probabilities, discount rates, and nonmarket benefits. The results reveal three enduring challenges: (1) limited valuation of intangible and social benefits, (2) uncertainty in design floods under climate change, and (3) trade-offs between safety, water supply, and mitigation performance. Drawing on these insights, the paper proposes a climate-adaptive CBA framework that integrates climate-scenario modeling, valuation of social and environmental co-benefits, and system-level optimization. The framework provides a pathway toward a nationally consistent, resilience-focused approach to flood-risk investment, ensuring that future flood-defense decisions in Australia are economically justified, socially equitable, and adaptable under a changing climate.