Investing in Disaster Risk Management in an Uncertain Climate
Climate change will exacerbate the challenges associated with environmental conditions, especially weather variability and extremes, in developing countries. These challenges play important, if as yet poorly understood roles in the development pros...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/04/26212121/investing-disaster-risk-management-uncertain-climate http://hdl.handle.net/10986/24204 |
| Summary: | Climate change will exacerbate the
challenges associated with environmental conditions,
especially weather variability and extremes, in developing
countries. These challenges play important, if as yet poorly
understood roles in the development prospects of affected
regions. As such, climate change reinforces the development
case for investment in disaster risk management. Uncertainty
about how climate change will affect particular locations
makes optimal investment planning more difficult. In
particular, the inability to derive meaningful probabilities
from climate models limits the usefulness of standard
project evaluation techniques, such as cost-benefit
analysis. Although the deep uncertainty associated with
climate change complicates disaster risk management
investment decisions, the analysis presented here shows that
these considerations are only relevant for a relatively
limited set of investment circumstances. The paper offers a
simple decision framework that enables policy makers to
identify the particular circumstances under which
uncertainty about future climate change becomes critical for
disaster risk management investment decisions. Accounting
for climate uncertainty is likely to shift the optimal
balance of disaster risk management strategies toward more
flexible, low-regret type interventions, especially those
that seek to promote "development first" or
"risk-coping" objectives. Such investments are
likely to confer additional development dividends,
regardless of the climate future that materializes in a
given location. Importantly, the analysis here also
demonstrates that climate uncertainty does not necessarily
motivate a "wait and see" approach. Instead, where
opportunities exist to avail of adaptation co-benefits,
climate uncertainty provides additional motivation for early
investment in disaster risk management initiatives. |
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