ECONOMIC ANALYSIS OF ADAPTATION STRATEGIES TO CLIMATE CHANGE: A COST BENEFIT ANALYSIS RELEBOHILE LETELE, BUREAU OF STATISTICS, LESOTHO Presented at the ICAS-IV Conference held in Rio De Janerio, Brazil, th October, 2013 ABSTRACT Climate change poses threats to the agricultural sector and negatively affects subsidence farmers who have a low adaptive capacity. Therefore adaptation capacity is needed to counteract the impacts of climate change. However, while adaptation is considered crucial for addressing potential challenges of current variability and future climate change, there are many knowledge gaps in the assessment of the cost and benefits of adaptation to climate change in the agricultural sector. T his study draws on the existing literature on best strategies and tailors its use on testing local level of adaptation projects. Three main methods of economic analysis namely; Net present value (NPV), Benefit-Cost ratio (BCR) and internal rate of return (IRR), were used for each of the adaptation strategies. The results show that farmers who practice ‘late planting and recommended fertilizer amount’ in the context of climate change are the ones who would get highest crop production more than farmers who practice early planting and common fertilizer. The study recommends that farmers in Maphutseng should adopt late planting and recommended fertilizer amount in order to protect themselves from the negative impacts of climate change. Keywords: Climate change, climate change adaptation, Lesotho, Maphutseng, cost-benefit analysis RESEARCH PROBLEM In Lesotho, studies that have analyzed climate change and agriculture have paid little attention to the costs and benefits of adaptation options in the country. There is lack of policies directly targeted towards adaptation to climate change and lack of evidence showing the costs and benefits of adaptation to climate change. It is against this background that assessments of adaptation options to climate change in crop production are needed. Objectives  This study will draw on the existing literature on best practices and tailor its use on testing local level economic methods for analysis of adaptation projects. Thus the objectives of the study are:  To quantify the costs and benefits of implementing adaptation strategies in the areas of Maphutseng  To compare the costs and benefits for different adaptation options in crop production taking into account their viability. Methods  Therefore this study is interested in investigating the adaptation strategies used by the farmers due to climate change. And which are the most efficient adaption strategies that will maximize future income in new climate condition? RESULTS SUMMARY OF DISCOUNTED CASH FLOWS FOR FARMERS WHO ARE ADAPTING (TOP TABLE) AND NON- ADAPTERS (BOTTOM TABLE) RECOMMENDATIONS It is important that climate change studies be carried out at local level in order to inform policy makers on the necessary intervention strategies for specific local areas. This study suggests that late planting with recommended fertilizer (LP with RF) is the adaptation strategy that is likely to provide these subsistence farmers the highest yield in maize production in a climate change condition. Since few of the farmers surveyed are currently practicing LP with RF part of the adoption of this option is public education so that more of these farmers would be encouraged especially because it is in line with conservation agriculture which has been proven by a lot of farmers and researchers that it results in successful agricultural production. Selection Criteria EP with RF LP with RF NPV BCR56 IRR Selection Criteria EP with RF LP with RF NPV00 BCR11 IRR