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Climate Change Uncertainty and Risk: From Probabilistic Forecasts to Economics of Climate AdaptationDavid N. Bresch, IED ETHReto Knutti, IAC ETHAssistants: Kathrin Wehrli, Thomas Röösli, Marius Wälchli
David N. Bresch, Reto Knutti, ETH Zürich
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Schedule26.02.18(1) Logistics, Introduction to probability, uncertainty and risk management
(RK, DB)05.03.18 (2) Predictability of weather and climate (RK)
Exercise 1 (toy model)12.03.18 (3) Probabilistic risk assessment model and some insurance basics (DB)19.03.18(4) Detection/attribution (RK)
Exercise 2 (toy model)26.03.18 (5) Model evaluation & calibration (RK)
Exercise 3 (toy model), preparation of presentation02.04.18 Ostermontag (no course)09.04.18 (6) Climate change and impacts, use of scenarios (RK, DB)16.04.18 (7) Presentations of toy model work, discussion (DB, RK)23.04.18 (8) 2-degree target and adaptation in UNFCCC (RK, DB)
Exercise 4 (introduction to climada)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Schedule
30.04.18 (9) Basics of economic evaluation and economic decision making (DB)
07.05.18 (10) The cost of adaptation - in developing and developed regions (DB)
Exercise 5 (impacts)
14.05.18 (11) Shaping climate-resilient development – valuation of a basket of adaptation options (DB)Exercises 6 (adaptation measures, preparation of presentation)
21.05.18Pfingstmontag (no course)28.05.18 (12) Presentations of climada exercise and final discussion (DB, RK)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Research opportunitiesThe weather and climate risks (WCR) group is currently looking for students to support and engage in our work, namely:
Student Research Assistant (HiWi): § Analyzing the Private Climate Services Sector, see
http://www.wcr.ethz.ch/the-group/open-positions/research-assistants.html:
Master thesis topics:§ Health costs due to heat waves in the canton of Zurich§ Climate change and labor: Impacts of heat in the workplace§ How do organizations include weather in their decision-making? A
quantitative analysis of Swiss organizations
See https://www.intranet.usys.ethz.ch/UMNW/master-arbeitenAnd please feel free to contact the assistants and/or David N. Bresch
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
https://services.iac.ethz.ch/survey/index.php/335513/lang-en
Case study selection – your choice!
A short list of proposed case studies to learn more about, you made your
choice… this defines the content of today’s lecture (22 responses):
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
What about this?
A house near the flooded village of Moorland in Somerset.
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
How are those two connected?
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Causal chain of climate change from actions by people to impacts on people
weather
eval
uatio
n
From: Smith, L. A., & Stern, N., 2011: Uncertainty in science and its role in climate Policy
design policy
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Climate-compatible development requires both mitigation and adaptation
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Shaping climate-resilient developmentKey questionsDecision makers of national and local economies ask
§ What is the potential climate-related damage to the economies and societies over the coming decades
§ How much of that damage can we avert, with what measures?
§ What investments will be required to fund those measures and will the benefitsof that investment outweigh the costs?
The Economics of Climate Adaptation (ECA) methodology provides decision makers with a fact base to answer these questions in a systematic way. It enables them to understand the impact of climate change on their economies and identify actions to minimize that impact at the lowest cost to society. It therefore allows decision makers to integrate adaptation with economic development and sustainable growth.
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Climate-resilient developmentEconomics of climate adaptation (ECA)Objectives§ Provide decision makers with the facts and methods necessary to design and
execute a climate adaptation strategy
Key features of the methodology:§ Follow a rigorous risk management approach to assess local total climate risk,
the sum of§ today’s climate risk,§ the economic development paths that might put greater population and value
at risk (à projection)§ the additional risks presented by climate change (à scenarios)
§ Propose and prioritize a basket of adaptation measures (i.e. options) to addresstotal climate risk on an economic basis
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
More than twenty Economics of Climate Adaptation (ECA) studies worldwide
Guyana: Flash flood risk to a developing urban area
Tanzania
Tanzania: Drought risk to health and power generation
Samoa: Risk of sea level rise to a small island state
Florida: Hurricane risk to public and private assets
Mali: Risk of climate zone shift to agriculture
India: Drought risk to agriculture
Caribbean: Hurricane risk to small islands
US Gulf Coast: Hurricane risk to the energy system
New York: Cyclones and surge risk to a metropolis
Hull, UK: Flood and storm risk to urban property
China: Drought risk to agriculture
Bangladesh: Flood risk to a fast-developing city
El Salvador: Flood and landslide risk to vulnerable people
Economics of Climate Adaptation (ECA) Working Group, a partnership between the Global Environment Facility, McKinsey & Company, Swiss Re, the Rockefeller Foundation, ClimateWorks Foundation, the European Commission, and Standard Chartered Bank.
http://www.wcr.ethz.ch/research/casestudies.html
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Economics of climate adaptation (ECA)
The working group
Plus scientific advice by many institutions, e.g. ETH Zürich
Comprehensive report at https://www.ethz.ch/content/dam/ethz/special-interest/usys/ied/wcr-
dam/documents/Economics_of_Climate_Adaptation_ECA.pdf
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Hull, UK: Flood and storm risk to urban property
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Eco
nom
ics_
of_
Clim
ate_
Adap
tion_
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Fact
shee
t.pdf
New York: Tropical cyclones and storm surge risk to a metropolis
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/EC
A_N
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ECA full report featuring the first 8 case studies, 164 pages
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/EC
A+Br
ochu
re-
Fina
l.pdf
US Gulf Coast: Hurricane risk to the energy system
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Ent
ergy
_st
udy_
exec
_rep
ort_
2010
1014
Caribbean: Hurricane risk to small islands
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/EC
A+Br
ochu
re-
Fina
l.pdf
Guayana: Flash flood risk to a developing urban area
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Eco
nom
ics_
of_C
lim
ate_
Adap
tion_
Guy
ana_
Fact
shee
t_en
Mali: Risk of climate zone shift to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Eco
nom
ics_
of_C
lim
ate_
Adap
tatio
n_Fa
ctsh
eet_
Mal
i.pdf
India: Drought risk to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Eco
nom
ics_
of_C
lim
ate_
Adap
tatio
n_In
dia_
Fact
shee
t.pdf
China: Drought risk to agriculture
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/reth
inki
ng_s
hapi
ng_c
limat
e_re
sile
nt_d
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opm
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df#p
age=
74
A global overview of ECA studies with a focus coastal communities
http
://m
edia
.sw
issr
e.co
m/d
ocum
ents
/Eco
nom
ics_
of_C
limat
e_Ad
apta
tion_
focu
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mm
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df
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
TEST CASE ONBARISAL, BANGLADESH – FOCUS ONFLOOD AND TROPICAL CYCLONE RISK
Study partners funded by
Ecorys
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Tropical Cyclones 1950-2016 x 100 (probabilistic)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Risk and capacity based allocation of resources: Poor in the West of the city most affected
∼2km
exposure
simulated impact
CLIMADAweather
red: highgreen: low
Barisalcity center
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Risk assessment
?
Risk today+development+climate change: the ‘waterfall chart’Annual average expected flood victims in the city of Barisal, Bangladesh
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Options appraisalThe adaptation cost curve: adaptation measures sorted by cost and benefità Powerful measures exist to save people’s lives in the city of Barisal, Bangladesh
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Solid waste management reduces flood losses by 10% in the core city of Barisal
CLIMADA
Barisalcity center
low averted damage
high averted damage
exposure
∼2km
red: highgreen: low
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Flood resilient crops reduce agricultural losses by
40% mostly in the western part of Barisal
Barisalcity center
low
averted
damage
high
averted
damage
relative damage
∼2km
red: high
green: low
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […].
Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
TEST CASE ONSAN SALVADOR, EL SALVADOR – FOCUS ONFLOOD AND LANDSLIDE RISK
Study partners funded by
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
100 year flood event around Acelhuate River, San Salvador, reaches up to 4 m water depth Acelhuate region, as a part of the metropolitan area of San Salvador, is selected to analyse flood risk and identify adaptation measures
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Exposure
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Annual expected flood damage in Acelhuate can increase from USD 5 to 19 mio by 2040Roughly 140 people are affected today, we project almost 200 people affected due to flood under an extreme climate scenario in 2040
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Drainage, relief channel and ecologic restauration can protect up to 4’500 people until 2040
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Ecologic restauration, absorption wells and urban planning are powerful measures to reduce flood riskRoughly USD 200 mn assets are at risk from flooding until 2040
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Ecologic restauration in the upper catchment area an reduce up to USD 50 mn flood damage until 2040The restoration of forest areas in the upper catchment of Acelhuate leads to increased infiltration of rainwater and therefore reduces flood runoff in the city
Wieneke & Bresch, 2016: Economics of Adaptation (ECA) in Development Cooperation: A Climate Risk Assessment Approach Supporting decision making […]. Materials on Development Financing, UNU, KfW. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No5_Economics-of-Adaptation_EN.pdf
CLIMADA
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Synergies and dis-synergies, an example: Implementation of 4 cost efficient measures may avert 53% of the expected loss in 2030
Samoa case study
http://media.swissre.com/documents/rethinking_shaping_climate_resilent_development_en.pdf#page=110
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
TEST CASE ONMAHARASHTRA, INDIA – FOCUS ONDROUGHT RISK TO AGRICULTURE
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
India, Maharashtra – Overview
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
India, Maharashtra case study
Focus on drought due to its large impact on agriculture and human livelihood
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Maharashtra has the largest drought prone area of all states in India
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
• Predicting local climate is inexact given limited data. Therefore, 3 scenarios were developed for rainfall change in the 2030 timeframe– Based on temp and precipitation
predictions from 22 global climate models
– Distribution in rainfall varied from 92-102% of today’s value
• While some regional climate models exist assessing at a higher resolution and smaller grid area than GCMs, the science behind these models is still developing
• Climate scenarios were later used to develop 3 hazard scenarios
Description2030 scenarios
• Historic rainfall and drought data used to estimate rainfall frequency
Today’s climate
1
• Average change based on the mean rainfall predicted from 22 GCMs1
“Moderate”change
2
• Extreme change based on average of 90th percentile values for predicted rainfall from 22 GCMs
“High”change
3
GCM results consistent with output from regional models (A2 and B2) for Maharashtra
SOURCE: Results for GCMs from Prof. Reto Knutti, ETH Zurich; RCM results for A2 and B2 from Prof. Krishna Kumar, Indian Institute of Tropical Meteorology
1 22 GCMs for Maharashtra, run with the A1B scenario
India, Maharashtra case study
Given the uncertainty in future climate projections, we developed 3 scenarios for climate change
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
200
570
238
2030, total expected loss
Incremental increase from climate change
2008, Today’s expected loss
132
Incremental increase from economic growth; no climate change
35% of 2030 total expected loss
23% of 2030 total expected loss
• Expected loss is driven by current risk, agricultural growth, and climate change
• Agriculture income growth would contribute to an additional 23% of 2030 upper bound loss
• Climate change (occurring in combination with income growth) will account for 35% of 2030 upper bound loss
Expected loss from exposure to climateHigh climate change scenario, 2008 USD millions
The economic value at risk – driven by economic growth and climate changeIndia, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
570
360370
238
Percent of region’s agriculture output
Annual expected loss in 2008 and 2030$ Millions, 2008 dollars
4.1
Scenarios
SOURCE: Swiss Re; team analysis
2.5
2008Today’s climate
2030Today’s climate
2030Moderate change
2030High change
2.63.1
• The three scenarios represent a range of uncertaintyaround the implications of climate change
• Even without an increase in hazard from climate change (scenario 1), there is still significant “annual expected loss” in the 2030 timeframe
The economic value at risk – driven by economic growth and climate changeIndia, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Severe impact of an extreme event on small and marginal farmers
figures for today’s climateSource: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Infrastructure and asset- based responses
Technological and procedural optimization responses
Systemic and behavioral responses
Risk transfer and contingent financing
Portfolio of responses
Hazards
Value
Vulnerability
Total Climate
Risk
Managing total climate risk requires a cost-effective adaptation portfolio
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Measures are first screened based on feasibility and availability India, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Cost (mn $)
74
1,109
447
1,438
7,978
1,155
3,280
551
1,374
4,545
5,467
2,733
2,733
1,384
12,027
20
1,035
NA
-80Drainage systems (rf)
-197Soil techniques
-74Drainage systems (ir)
14Irrigation controls
139Drip irrigation
81Crop engineering (ir)
285Sprinkler irrigation
49Integrated Pest Mgmt. (ir)
146IPM (ir)
534Watershed +rwh
1,553Last mile irrigation
966Rehab. of irrigation systems
1,837Ground water pumping
271Crop engineering (rf)
8,987Planned irrigation projects
16Canal lining
1,035Insurance
NARelief and rehabilitation
1
3
499
1,036
556
21
16
59
547
64
225
36
91
312
227
113
113
35
-2.13
-0.18
-0.16
0.01
0.02
0.07
0.12
0.09
0.11
0.12
0.28
NA
0.73
0.67
0.35
0.75
0.81
1.00
*All figures are in terms of PV values, in current prices, up to 2030
Measure* Cost/Benefit ($/$)Benefit (mn $) Loss averted (mn $)
Totals 2,200 24,370 NA 3,000
• Only 80% of the expected loss can be mitigated by 12 measures. The remaining 20% is “residual” loss, which will require additional penetration of insurance, or relief and rehabilitation to address
11
10987654321
12
CBA
DE
Second, measures are analyzed in respect of costs and benefits (averted loss) in great detailIndia, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich1 Estimated present value out to 2030 at 2009 dollars
In addition to agricultural ‘best practice’, index-based micro insurance is a powerful toolIndia, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich1 Estimated present value out to 2030 at 2009 dollars
In addition to agricultural ‘best practice’, index-based micro insurance is a powerful toolIndia, Maharashtra case study
Source: ECA group
Total climate risk570 mn USD
Dra
inag
e sy
stem
s an
d so
il te
chni
ques
Drip
and
spr
inkl
er ir
rigat
ion
Rai
n w
ater
har
vest
ing
Cro
p en
gine
erin
g
Insu
ranc
e
Averted damage (mn USD)
Reduced damage per USD invested (USD)
0 100 200 300 400 5001
7
13
19Most cost−effectiveFurther measures
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich1 Estimated present value out to 2030 at 2009 dollars
Need for a set of changes to take place to achieve thefull extent of benefits of these 5 measuresIndia, Maharashtra case study
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
▪ The top eleven cost effective measures can address ~80% of the expected loss across a range of risk frequency/severity – However, the only measure
truly effective in high severity events is index insurance
▪ Measures included (to cover the range of risks) are:– Drainage systems (rf) – Soil techniques – Drainage systems (ir) – Irrigation controls – Drip irrigation – Crop engineering (ir) – Integrated Pest Mgmt. (ir)– IPM Rainfed– Sprinkler irrigation – Watershed +rwh– Crop engineering (rf)– Indexed insurance
11,657
11,6570
1/25 to 1/10
21,163
39,302
4,03404,655
7,054
<1/50
64,499
Residual loss
Index insurance
Other measures
1/10 to annual
29,665
0
9,512
13,099
4,655
1/50 to 1/25
0
Hazard frequency(1/return period) 11
10987654321
Loss profile
Loss across hazard frequencies*$ Million, 2008 dollars
* This is loss before adjusting for frequency range. Annual expected loss is area under the curve12
Micro insurance most effective for rare eventsIndia, Maharashtra case study
à see climada_adaptation_event_view
• Swiss Re significantly supported development of Indian weather insurance market as a first mover
• First deal in 2004 with Basix (microfinance institution) for Castor and Groundnut crop in Mehbubnagar, Andhra Pradesh against deficit rainfall covering 1’500 farmers
• Since then numerous reinsurance contracts closed providing coverage for >1’500’000 insured
• Most policies cover precipitation, temperature or a combination thereof
Source: ECA group
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Global overview: Expected loss averted by adaptation measures
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Roadmap and business case for adaptation funding
Risk assessment
Cost-benefit analysis
Risktoday
Develop-ment
Climate change
Risk 2030
What if we …
• specify our risk appetite in line with development priorities
• incorporate further criteria relevant to us in addition to cost-benefit ratio
• (re-)prioritize risk mitigation and transfer measures based on our priorities
• calculate an adaptation business plan and corresponding investment plan
• develop a roadmap including priority initiatives
• use roadmap and business case for funding discussions
• speed-up implementation with the additional funding and hence further strengthen resilience
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
www.climatefinancelandscape.org
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
1. Problem definition, Goal
7. Implementation
6. Decision (?)
NO
NO
Criteria met?
Problemdefined
correctly?
2. Decision criteria
3. Risk analysis
8. Monitoring
Note on decision strategies
CLIMADA
4. Identify options5. Options appraisal
Souvignet, Wieneke, Müller & Bresch, 2016: Economics of Climate Adaptation (ECA) - Guidebook for Practitioners. https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No6_Guidebook_Economics-of-Climate-Adaptation_EN.pdf
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Notes on validity – adaptation
Unrealistic?
ModelledNot modelled
Reality à Model: Abstraction
Described in Model
Model à Reality : Interpretation (Verification/Falsification/Calibration)
incrementalconceptional
Cha
ngin
g re
ality
àe.
g. c
limat
e ch
ange
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
The purpose of a model
§ A prediction for the future§ A tool to test different scenarios§ A tool to test hypothesis about the system and to better
understand it
§ A framework to compare different options and put them on a common scale
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Do we trust a model?§ “A vigorous Climate Prediction Project [] would ensure that the goal
of accurate climate predictions at the regional scale could begin to aid the global society in coping with the consequences of climate change.” (http://wcrp.wmo.int/documents/WCRP_WorldModellingSummit_Jan2009.pdf )
§ “New models that exploit extreme scale computing could determine the future frequency, duration, intensity, and spatial distribution of droughts, deluges, heat waves, and tropical cyclones.”(http://www.sc.doe.gov/ober/ClimateReport.pdf )
§ “Verification and validation of numerical models of natural systems is impossible. This is because natural systems are never closed and because model results are always nonunique.” (Oreskes et al. 1994)
§ “…what these instances of fit [between their output and observational data ] might confirm are not climate models themselves, but rather hypotheses about the adequacy of climate models for particular purposes.� (Parker 2009)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Do We Need Better Predictions to Adapt to a Changing Climate?
§ “Given the deep uncertainties involved in the prediction of future climate,
and even more so of future climate impacts, and given that climate is
usually only one factor driving the success of adaptation decisions, we
believe that the “predict-then-act” approach to science in support of
climate change adaptation is significantly flawed.”
§ “…use climate models to provide information that can help evaluate
alternative responses to climate change, without necessarily relying on
accurate predictions as a key step in the assessment process. The basic
concept rests on an exploratory modeling approach whereby analysts use
multiple runs of one or more simulation models to systematically explore
the implications of a wide range of assumptions and to make policy
arguments whose likelihood of achieving desired ends is only weakly
affected by the irreducible uncertainties.”
(Dessai et al. EOS 2009)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
The Hartwell Paper: A new direction for climate policy after the crash of 2009§ “A second misunderstanding has developed in parallel with that of the
misapplied analogies from other treaty situations. In its way, it is as profound and as widely shared a ‘mis-framing’ and it concerns the popular view of science as projected by users of scientific information and by those producers of primary science on climate issues who have chosen also to act as advocates and activists. They employ a ‘deficit model’ of science. The expert scientist pours knowledge into the ignorant and passive heads of the public and their representatives. Their deficit is remedied. They trust the expert’s superior knowledge and qualifications and the scientist then leverages that power to instruct further the ignorant public and to delineate the correct actions to remedy the situation which the expert has described.”
§ “This error has led to the common and flawed assumption that the solutions to climate change should be ‘science driven’ as if a shared understanding of science will lead to a political consensus.”
(http://eprints.lse.ac.uk/27939/)
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
§ “Politics is not about maximising rationality. It is about finding compromises that enough people can tolerate to allow society to take steps in the right direction. So, contrary to all our modern instincts, political progress on climate change simply cannot be solved by injecting more scientific information into politics. More information does not automatically reduce uncertainty and increase public confidence, which is the common politicians’ assumption. But, in consequence of that assumption being present and potent in this (or any) politically hot field, there is a constant temptation for experts to overstate and to oversimplify: something that is plainly revealed in the recent history of climate issues. But this is a recipe for political disappointment…”
(http://eprints.lse.ac.uk/27939/)
The Hartwell Paper: A new direction for climate policy after the crash of 2009
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
§ “The consequence of this misunderstanding [the climate change problem is a ‘pollution problem’ and CO2 must be reduced] was that there was a fundamental framing error, and climate change was represented as a conventional environmental ‘problem’ that is capable of being ‘solved’. It is neither of these. […] Rather than being a discrete problem to be solved, climate change is better understood as a persistent condition that must be coped with and can only be partially managed more – or less – well.”
(http://eprints.lse.ac.uk/27939/)
The Hartwell Paper: A new direction for climate policy after the crash of 2009
David N. Bresch / IED ETH Zurich | Reto Knutti / IAC ETH Zurich
Making a decision
Theory
Obser-vationsModels 42
(Answer to the Ultimate Question of Life, the
Universe, and Everything)
57
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