Ecosystem based adaptation (EbA) solutions were identified and selected in a participatory process conducted across low-lying atoll islands and high islands communities of Palau and the Federated States of Micronesia (FSM). Cost-Benefit Analysis (CBA) was conducted to assess the costs and benefits of each EbA solution, in terms of welfare losses, due to the implementation of projects or policies, and welfare gains associated with the improved provision of ecosystem services.