Towards a step-change for dealing with critical risks ‘beyond’ adaptation and the Loss and Damage policy debate.

Making use of mutuality-solidarity-accountability-transparency principles

By Teresa M. Deubelli, researcher in the IIASA Risk and Resilience Program and Reinhard Mechler, Deputy Program Director IIASA Risk and Resilience Program

The Warsaw International Mechanism (WIM) for Loss and Damage and its ongoing review were hot topics at COP25. Hopes for a step-change on the issue of finance to scale up action and support have not been translated into action. Negotiating Parties remain divided over the way forward and the question of what kind of finance and for whom. We suggest to build on principles of risk governance, including insurance, and international cooperation  – mutuality, solidarity, accountability and transparency – and to combine these in novel ways in order to upscale action on both averting and minimizing as well as addressing loss and damage under the WIM in a manner that truly shows responsibility for responding to the climate crisis.

COP25 Madrid, Spain © Reinhard Mechler | IIASA

 Why do we need a step-change on Loss and Damage finance?

Hard limits to adaptation are creating situations beyond adaptation; think for example of communities fleeing desertification or sea-level rise that can only retreat so far. The WIM has made substantial strides on its objectives to advance knowledge and exchange since its creation, but now the time is ripe to take the necessary steps to also move forward on addressing loss and damage from climate change.

So far, this third WIM priority has mostly been addressed through insurance approaches, such as the Fiji Clearing House. While there is value in scaling up risk transfer options, insurance comes with drawbacks: insurance premium costs often exceed financial capacities of vulnerable groups or may result in a false sense of protection that undermines further resilience-building action. Additionally, risk transfer options remain focused on sudden onset events.

Loss and damage from climate change is not just linked to sudden events; sea-level rise, desertification, and glacial melting take years to unfold, but once these tipping points are reached, recovery and reconstruction, and thus the typical logic of humanitarian assistance, are out of the question. As the climate crisis spirals forward tipping points may be reached sooner than expected, also challenging the sustainability of resilience building actions within the framework of development cooperation

How to make a principled case to generate support for addressing loss and damage?

Most vulnerable countries agree that the WIM needs to advance on enhancing action and support for addressing loss and damage from climate change. Discussions at COP25 focused heavily on the issue of mobilizing finance for addressing loss and damage, but little headway was made, as views on the exact modalities of finance and its access differ vastly amongst Parties. Unfortunately, this means that the ongoing WIM review faces a certain risk of replicating the stalemate that characterised the Paris Agreement negotiations on the question of liability, when notions of compensatory justice were crossed out from Article 8 at the request of several developed, high emitting countries.

In order to propel the discourse forward in future rounds of climate talks and in the WIM review, We suggest to build on principles of risk governance, including insurance, and  international cooperation  – mutuality, solidarity, accountability and transparency – and to combine these in novel ways in order to upscale action on both averting and minimizing as well as addressing losses and damages under the WIM:

  • As the underlying insurance principle, mutuality is found in risk pooling and sharing – several parties pool funding to mobilize finance for offsetting losses in times of crisis, essentially spreading out and mutualizing risks across participants.
  • Solidarity describes the shared responsibility for supporting others in times of hardship. As a principle it underpins development cooperation and humanitarian assistance and is at the heart of the Agenda 2030.
  • Accountability links actions with outcomes in a mutually responsible relationship and is motivated by a perceived ethical or legal obligation for supporting each other in addressing climate-attributed loss and damage.
  • As a transversal principle, transparency adds itself as a critical enabler of a finance architecture that expands the WIM to support those who are suffering loss and damage in ways that cannot be addressed through business-as-usual.

All principles lend themselves to the WIM as a ground for advancing on its priority to enhance action and support for addressing loss and damage from climate change, but also offer inspiration for thinking out novel ways to advance further.

What could this mean concretely?

These deliberations are not merely theoretical in nature but are seeing attention. For example through the further development of the (ARC) pool, a regional drought pool established in 2012 as a specialised agency of the African Union to help member states improve their planning, preparation and response capacities. Disbursements from the pool support participating governments’ drought relief efforts, with requirements on how these are used (transparency and accountability).

Initial donor funding (solidarity) and ARC member annual premium payments (mutuality) capitalise the ARC. The pool is currently preparing for the launch of an additional capitalization mechanism, the Extreme Climate Facility (ARC-XCF). This would issue climate catastrophe bonds, resulting in pay-outs whenever the index tracking frequency and magnitude of droughts and extreme temperature exceeds a predefined threshold (transparency). While using the capital markets to access additional funding needs, accountability for climate change is factored in to some extent through the international support divested to setting up the mechanism.

The ARC-XCF is one way to address loss and damage and offers practical inspiration for setting up facilities for addressing loss and damage under the WIM. Especially where hard limits are pushed beyond adaptation and traditional insurance is no longer feasible, drawing on the experience from such risk pooling facilities can be useful input for setting up a specific facility under the WIM that supports those at the frontiers of climate change.

In doing so, it will be important to keep the principles of international cooperation and insurance – mutuality, solidarity, accountability and transparency – in mind to equitably address loss and damage, especially where risks are increasingly intolerable and beyond adaptation.

References:

Deubelli, T.  and Mechler, R. (2019). Finance for Loss & Damage: Towards a comprehensive principled approach, unpublished.

Linnerooth-Bayer, J. Surminski, S., Bouwer, L., Noy, I., Mechler, R., McQuistan, C. (2018). Insurance as a Response to Loss and Damage? In: Mechler R, Bouwer L, Schinko T, Surminski S, Linnerooth-Bayer J (2018). Loss and Damage from climate change. Concepts, methods and policy options. Springer, Cham: 483-512

Mechler R, Bouwer L, Schinko T, Surminski S, Linnerooth-Bayer J (2018). Loss and Damage from climate change. Concepts, methods and policy options. Springer, Cham.

This blog is reposted from a Flood Resilience Portal blog.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

What we’ve learnt from measuring flood resilience

By Finn Laurien, research assistant at the IIASA Risk and Resilience (RISK) Program, and doctoral student at the Vienna University for Economics and Business.

A major challenge in understanding community flood resilience is the lack of an empirically validated measure of it. To plug this gap the Zurich Flood Resilience Alliance (ZFRA) developed the Flood Resilience Measurement for Communities (FRMC). In the first phase of the Alliance we applied the FRMC tool in 118 communities in nine different countries. This is what we learnt from it. 

What is the Flood Resilience Measurement for Communities?

The FRMC approach holistically measures a set of “sources of resilience” before a flood happens (e.g. household savings or whether a community has a flood recovery plan) and looks at the post-flood impacts afterwards (e.g. level of loss and recovery time). The FRMC framework is built around the notion of five types of capital (the 5Cs: human, social, physical, natural, and financial capital) and the 4Rs of a resilient system (robustness, redundancy, resourcefulness, and rapidity). The data is collected and assessed via an integrated and hybrid platform. Each source of resilience is graded from A to D (best practice to significant below good standard) providing communities and decision-makers with an overview of the level of resilience capacity.

The 5 Capitals and 4 sources of resilience © Paulo Cerino

What did we learn from this large-scale analysis of community flood resilience? 

Human and physical capital had the most sources assigned an A or B grade. The highest rated sources are education (value and equity), flood exposure perception, knowledge and awareness, communication, water, personal safety as well as health and sanitation. This could be a result of flood mitigation interventions traditionally being focused on building people’s skills and knowledge and/or physical structures.

Overview of frequency of grades for the sources of resilience by capital. Note: Number in bracket of capitals indicates the number sources in that capital. (Source: Campbell et al., 2019)

Despite the source-specific guidance and standardized data, grading is largely a judgment-based process and the FRMC includes a box where the assessor indicates how confident they are in the assigned grade. Since the trained assessors are practitioners with local understanding of the community the grades are influenced by their field expertise. The assessors were generally confident in the assigned grades and we found that their confidence increased the more data collection methods that were used.

Linking flood resilience and community characteristics

The FRMC was used in a range of different communities in developing and developed countries in contexts ranging from urban to rural and with some difference in past experience of flooding.

We discovered a correlation between poverty and lack of flood resilience and also found that having experienced very severe floods reduced a community’s level of resilience while experiencing frequent but less severe floods could help contribute to resilience, potentially by providing communities with relevant experience to adapt.

Does the FRMC process result in different interventions? 

A key question we asked is whether the process of carrying out the baseline measurement and sharing results with the community resulted in interventions that were substantially different from what would have been implemented anyway. We find that it did, though to somewhat varying degrees.

Country teams overwhelmingly reported that the process helped them, their stakeholders, and communities to see flood resilience in a much more holistic way. For example, by broadening the perspective of flood resilience beyond that of physical infrastructure to also include social capital. The FRMC process influenced the implementation of a wide range of interventions, showing the breadth of the underlying conceptualization of resilience. The purpose of the FRMC approach is to help communities holistically strengthen their resilience and the broad range of interventions shows that this has worked.

Many country programs revised their project plans, log-frames and budgets as a result of the baseline measurement. Program staff highlighted how welcome it would be if other funders followed Zurich’s lead and allowed for similar in-depth analysis prior to intervention design and flexibility to act on the learning coming out of it to ensure the most effective intervention design.

What’s next for the FRMC? 

This testing and data analysis has fed into the revision process for the development of the Next Generation FRMC which is currently being scaled to many more communities.

As the tool and measurement gets used in more communities and as part of more decision-making processes for flood resilient investments, we hope the usefulness and relevance of the tool will be demonstrated and adopted by many more organizations working to build community flood resilience.

Abel from Practical Action interviewing Consuelo, a community member in San Miguel de Viso, Peru as part of FRMC data collection ©Giorgio Madueño –

Reference:

Campbell KA, Laurien F, Czajkowski J, Keating A, Hochrainer-Stigler S, & Montgomery M (2019). First insights from the Flood Resilience Measurement Tool: A large-scale community flood resilience analysis. International Journal of Disaster Risk Reduction 40: e101257. DOI:10.1016/j.ijdrr.2019.101257. http://pure.iiasa.ac.at/id/eprint/16027/

Access available resources on the FRMC here.

This blog is reposted from a Flood Resilience Portal blog.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Cooperation needed! The case of drought management in Austria

By Marlene Palka, research assistant in the IIASA Risk and Resilience Program

Marlene Palka discusses the work done by the IIASA FARM project, which has been investigating drought risk management in Austria for the past three years.

Future climate projections forecast an increase in both the frequency and severity of droughts, with the agricultural sector in particular being vulnerable to such extreme weather events. In contrast to most other climatic extremes, droughts can hit larger regions and often for extended periods – up to several months or even years. Like many other countries, Austria has been and is expected to be increasingly affected, making it necessary to devise a management strategy to mitigate drought damages and tackle related problems. The FARM project – a three year project financed by the Austrian Climate Research Program and run by the IIASA Risk and Resilience and Ecosystems Services and Management programs – kicked off in 2017 and has been investigating agricultural drought risk management both in a broad European context, and more specifically in Austria.

Young sunflowers on dry field © Werner Münzker | Dreamstime.com

Austria represents a good case study for agricultural drought risk management. Despite the agricultural sector’s rather small contribution to the country’s economic performance, it still has value and represents an important part of the country’s historical and cultural tradition. Around 80% of Austria’s total land area is used for agricultural and forestry activities. Equally important is its contribution to the preservation of landscapes, which is invaluable for many other sectors including tourism.

Globally, agricultural insurance is a widely used risk management instrument that is often heavily subsidized. Apart from the fact that the concept is increasingly being supported by European policymakers – the intention being that insurance should play a more prominent role in managing agricultural production risk – more and more voices from other sectors are calling for holistic management approaches in agriculture with the overall aim of increasing the resilience of the system.

There is a well-established mutual agricultural insurance company in Austria, which has high insurance penetration rates of up to 75% for arable land, and comparably high subsidies of up to 55% of insurance premiums. It is also encouraging to note that recent policy decisions support the timeliness of drought risk: in 2013, the Austrian government paid EUR 36 million in drought compensation to grassland farmers and in 2016, premium subsidies of 50% were expanded to other insurance products, including drought, while ad-hoc compensation due to drought was officially eliminated. In 2018, the subsidy rate was further increased to 55%. In light of these prospects, we investigated the management option space of the Austrian agricultural sector as part of the FARM project.

The 2018 Organisation for Economic Co-operation and Development (OECD) report on monitoring and evaluation of agricultural policies claims that efficient (drought) risk management in agriculture must consider the interactions and trade-offs between different on-farm measures, activities of the private sector, and government policies. The report further argues that holistic approaches on all management levels will be vital to the success of any agricultural management strategy.

In the course of our work, we found that agricultural drought risk management in Austria lacks decision making across levels. Although there is a range of drought management measures available at different levels, cooperation that includes farms, public and private businesses, and policy institutions is often missing. In addition, measures to primarily and exclusively deal with drought, such as insurance and irrigation, are not only limited, but (as we found) are also less frequently implemented.

As far as insurance is concerned, products are still being developed, and penetration rates are currently low. Drought risk is also highly uncertain, making it almost impossible to offer extensive drought insurance products. Irrigation is perceived as the most obvious drought management measure among non-agronomists. Simply increasing irrigation to deal with the consequences of drought could however lead to increased water demand at times when water is already in short supply, while also incurring tremendous financial and labor costs and additional stress to farmers. With that said, a large number of agricultural practices may also holistically prevent, cope with, or mitigate droughts. For example, reduced soil management practices are low in operating costs and prevent surface run-off, while simultaneously maintaining a soil structure that facilitates increased water holding capacity. Market futures might also stabilize farm income and therefore allow for future planning such as the purchase of irrigation equipment.

A workshop we held with experts from the Austrian agricultural sector further highlighted this gap. Thinking (not even yet acting) beyond the personal field of action was rare. The results of a survey we conducted showed that farmers were experiencing feelings of helplessness regarding their ability to manage the negative effects of droughts and other climatic extremes despite the implementation of a broad range of management solutions. One way to explain this could be a lack of cooperation across different management levels, meaning that existing efforts – although elaborate and well-proven – potentially reach their limit of effectiveness sooner rather than later.

Due to the more complex effects of any indirect/holistic drought management measure, we need tailored policies that take potential interdependencies and trade-offs into account. With evidence from the FARM project, my colleagues and I would like to emphasize an integrated risk management approach, not only at farm level but also in all relevant agencies of the agricultural sector in an economy. This will help to secure future production and minimize the need for additional public financial resources. Our findings not only contribute to ongoing high-level discussions, but also underpin the resulting claim for more holistic (drought) risk management with bottom-up data from our stakeholder work.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Enhancing urban resilience through nature-based solutions

By Luiza Toledo, IIASA Science Communication Fellow 2019

2019 YSSP participant Regina Buono investigates how the law can support or impede the use of nature-based solutions and help facilitate adaptation to climate change.

Recognizing the need for a systemic change is the first step to overcoming environmental challenges like climate change. In theory, governance systems can be designed and arranged to facilitate and embrace adaptation to climate change. Developing a legal framework that supports such an adaptation is, however, a big challenge. Learning how to manage the environmental crisis we currently find ourselves in while still being able to grow economically further complicates matters. According to Regina Buono, a participant in this year’s IIASA Young Scientist Summer Program (YSSP), nature-based solutions could be an alternative option that offers a multitude of benefits in terms of how this dual goal of economic growth and sustainability can be achieved. Buono’s research will contribute to IIASA as a partner in the EU Horizon 2020 project, PHUSICOS, which is demonstrating how nature-based solutions can reduce the risk of extreme weather events in rural mountain landscapes.

Outdoor green living wall, vertical garden on modern office building | © Josefkubes | Dreamstime.com

Nature-based solutions are actions to protect, manage, or restore natural ecosystems that address societal challenges, such as water security, pollution, or natural disasters – sometimes simultaneously. These solutions take advantage of the system processes found in nature – such as the water regulation function of wetlands, the allowance of natural space in floodplains to buffer flooding impacts, water storage in recharged aquifers, or carbon storage in prairies – to tackle environmental problems. This concept is now widely used to reframe policy debates on biodiversity conservation, climate change adaptation and mitigation strategies, urban resilience, as well as the sustainable use of natural resources.

As part of her research, Buono is exploring how the law can support or impede the use of nature-based solutions and considering how we can make legal systems more adaptive so they can help facilitate societal adaptation to a more uncertain world under ongoing and future climate change.

“My research is about using the law as a tool that works for us, rather than one that, because of its historic interest in stability, gets in the way,” she says.

Regina Buono, YSSP participant. | © Buono

Buono started her career as a lawyer based in the US. In her first job she was assigned to work with water issues and according to her, it was “love at first sight”. Following that first assignment, she continued to work on finding market-based solutions for issues related to endangered species. She decided to pursue a PhD in public policy in 2016, and soon after was asked to join the external advisory board to the Nature Insurance Value: Assessment and Demonstration (NAIAD) project in Europe. While attending the first meeting, she realized that there were no lawyers or legal scholars among the project researchers. As a lawyer, she could see that there was a gap in understanding how law and regulations would impact the uptake, development, and proliferation of nature-based solutions.

Working with NAIAD, she developed her PhD dissertation to address this gap and advance understanding around the role of the law in nature-based solutions, both in terms of governance in implementation and practice and the potential for governance innovation that better supports and promotes future adaptation.

“My YSSP project here at IIASA focuses on the city of Valladolid, Spain, and examines the legal context around the implementation of a collection of nature-based solution projects. I am trying to draw insights from these that could perhaps also be applied to other cases,” she explains.

Buono is doing a critical qualitative study that integrates analyses of interviews and policy documents using NVivo, a qualitative data analysis computer software package specifically designed to work with very rich text-based and/or multimedia information, together with legal analysis. She says that there is still a lot of work to be done to adapt to climate change and an interdisciplinary cross-sector effort will be necessary.

The preliminary results from her YSSP research point to a number of constraints and facilitating factors related to law and regulation. She says that the lack of explicit legal authorization for nature-based solutions that she identified in her study, strict water quality regulations, and bureaucratic hurdles could be some of the factors that constrain the implementation of nature-based solutions. However, flexibility in the law and a polycentric governance structure was identified as facilitating factors that encourage local entities to opt for nature-based solutions.

Buono hopes that her research will help decision makers to assess and address legal components that guide, structure, or impede the use of nature-based solutions, and to consider how the law could be evolved to create a more enabling environment for more adaptive governance arrangements that would better support nature-based solutions.

“Our policies and infrastructure are going to have to change to be able to deal with the impacts that we are already experiencing. Nature-based solutions and a shift toward adaptive governance could help us navigate more gracefully in these important transitions,” she concludes.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Bringing some light into the dark

By Tobias Sieg, IIASA Young Scientists Summer Program alumnus

IIASA Young Scientists Summer Program alumnus Tobias Sieg explains how risk assessments considering uncertainties can substantially contribute to better risk management and consequently to the prevention of economic impacts.

© Topdeq | Dreamstime.com

According to the World Economic Forum’s Global Risk Landscape 2018, extreme weather events and natural disasters are ranked among the top three global risks. For many regions, hydro-meteorological risks – in other words, weather or water related events like cyclones or floods that pose a threat to populations or the environment – constitute the biggest threat. This calls for a comprehensive scientific risk assessment with a particular focus on large associated uncertainties.

Assessing the risk of hydro-meteorological hazards without considering these uncertainties, is like entering a pitch-dark labyrinth. You have no idea where you are and where you will end up. If you enter with a flashlight, you might still not immediately know exactly where you will end up, but at least you can assess your possibilities for finding a way out.

We should all care to see those possibilities and to identify uncertainties, since the consequences of hydro-meteorological hazards can have severe impacts on socioeconomic systems, and global- and climate change could favor the occurrence of floods. An increase in extreme weather events, such as heavy precipitation can be expected along with an increasingly warmer climate. In combination with uncontrolled socioeconomic development, these extreme weather events could potentially trigger more intense hazardous flood events in the future. Appropriate management of their consequences is therefore required, starting from today, while pro-actively thinking about the future. To that end, risk management policy and practice need reliable estimates of direct and indirect economic impacts.

The reliability of existing estimates is usually quite low and, what is maybe even worse, they are not communicated properly. This may signal a false sense of certainty regarding the prediction of future climate-related risks.

In two recent studies, my co-authors and I developed and applied a novel method, which specifically focuses on the communication of the reliability of economic impact estimates and the associated uncertainties. The proposed representation of uncertainties enables us to shed some light on the possibilities of how a specific event can affect economic systems. As a Young Scientists Summer Program (YSSP) participant with the IIASA Risk and Resilience Program, I applied the method together with my supervisors Thomas Schinko and Reinhard Mechler, to estimate the overall economic impacts of a major flood event in Germany in 2013.

The estimated overall economic impacts comprise both direct and indirect impacts. Direct impacts are usually caused by physical contact of the floodwater with buildings, while indirect impacts can also occur in regions that are not directly affected by a flood. For example, obstructions of the infrastructure can lead to delayed deliveries, in turn leading to negative impacts for the production of goods outside the flooded areas. The crucial novelty of this method is the integrated assessment of direct and indirect economic impacts. In particular, by considering how the uncertainties associated with the estimation of direct economic impacts propagate further into the estimates of indirect economic impacts.

Being able to reproduce what has happened in the past is essential to making credible predictions about what could potentially happen in the future. A comparison of reported direct economic impacts and model-based estimates reveals that the estimation technique already works quite reliably. The good news is that anyone can help to increase the predictive reliability even further. The method uses the crowdsourced OpenStreetMap dataset to identify affected buildings. The more detailed the given information about a building is, the more reliable the impact estimations can get.

Our study reveals that the potential of short-term indirect economic impacts (without considering recovery) are quite high. In fact, our results show that the indirect impacts can be as high as the direct economic impacts. Yet, this varies a lot for different economic sectors. The manufacturing sector, for instance, is much more affected by indirect economic impacts, since it is heavily dependent on well-functioning supply chains. This information can be used in emergency risk management where decisions have to be made about giving immediate help to companies of a specific sector to reduce high long-term indirect economic impacts.

We are now looking at different possibilities of how flood events could affect the economic system. Having a range of possibilities of the relation between these impacts makes them transferable between different regions with similar economic systems. Our results are therefore also relevant more broadly beyond the German case. This representation of uncertainties can help to get to a more credible and consistent risk assessment across all spatial scales. Thus, the method is able to potentially facilitate the fulfillment of some of the calls of the UN Sendai Framework for Disaster Risk Reduction.

Detailed risk assessments considering uncertainties can substantially contribute to better risk management and consequently to the prevention of economic impacts – direct and indirect, both now and in the future.

References:

[1] Sieg T, Schinko T, Vogel K, Mechler R, Merz B & Kreibich H (2019). Integrated assessment of short-term direct and indirect economic flood impacts including uncertainty quantification. PLoS ONE 14(4): e0212932. [pure.iiasa.ac.at/15833]

[2] Sieg T, Vogel K, Merz B & Kreibich H (2019). Seamless estimation of hydro-meteorological risk across spatial scales. Earth’s Future. https://doi.org/10.1029/2018EF001122

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Exploring risk in development indicators

By Junko Mochizuki, researcher with the IIASA Risk and Resilience Program

IIASA researcher Junko Mochizuki writes about her recent research in which she and other IIASA colleagues developed an indicator to help identify vulnerable countries that should be prioritized for human development and disaster risk reduction interventions.

© Yong Hian Lim | Dreamstime.com

Working as part of an interdisciplinary team at IIASA, it is not uncommon for researchers to uncover disciplinary blind spots that would otherwise have gone unnoticed. This usually leads to a conversation that goes something like, “If only we could learn from the other disciplines more often, we can create more effective theories, methods, and approaches.”

My recently published paper with Asjad Naqvi from the IIASA Advanced Systems Analysis Program titled Reflecting Risk in Development Indicators was the fruit of such an exchange. In one afternoon, our coffee conversation hypothesized various reasons as to why the disaster risk discipline continued to create one risk indicator after another while the development community remained silent on this disciplinary advancement and did not seem to be incorporating these indicators into ongoing research in their own field.

Global ambitions such as the Sustainable Development Goals (SDGs) and Sendai Framework for Disaster Risk Reduction call for disaster mainstreaming, in other words, that disaster risk be assessed and managed in combination with any development planning efforts. For various reasons, we however continue to measure development and disasters separately. We know that globally the poor are more exposed to risk and that disasters hurt development, but there was not a single effective measure that captured this interlinkage in an easy-to-grasp manner. Our aim was therefore to demonstrate how this could be done using the information on disasters and development that we already have at our disposal.

The Human Development Indicator (HDI) is a summary measure of average attainment in key dimensions of human development – education, life expectancy, and per capita income indicators – that are used to rank countries into four tiers of human development. Using the HDI as an example, Asjad and myself compiled global datasets on human development, disaster risk, and public expenditure, and developed a method to discount the HDI indicator for 131 countries globally – just as others have done to adjust for income– and gender-inequality. Discounting the HDI indicator for education, for instance, involves multiplying it by the annual economic value of the average loss in terms of education facilities, divided by the annual public expenditure on education. We did this for each dimension of the HDI.

Conceptually, the indicator development was an intriguing exercise as we and our reviewers asked interesting questions. These included questions about the non-linearity of disaster impact, especially in the health sector, such as how multiple critical lifeline failures may lead to high death tolls in the days, weeks, and even months following an initial disaster event. Other issues we examined were around possibilities for the so-called build-back-better approach, which offers an opportunity to create better societal outcomes following a disaster.

Our formulation of the proposed penalty function hardly captures these complexities, but it nevertheless provides a starting point to debate these possibilities, not just among disaster researchers, but also among others working in the development field.

For those familiar with the global analysis of disaster risk, the results of our analysis may not be surprising: disasters, unlike other development issues (such as income- and gender inequalities for which HDI have been reformulated), have a small group of countries that stand out in terms of their relative burdens. These are small island states such as Belize, Fiji, and Vanuatu, as well as highly exposed low and lower-middle income countries like Honduras, Madagascar, and the Philippines, which were identified as hotspots in terms of risk-adjustments to HDI. Simply put, this means that these countries will have to divert public and private funds to pay for response and recovery efforts in the event of disasters, where these expenses are sizeable relative to the resources they have in advancing the three dimensions of the HDI indicator. Despite their high relative risk, the latter countries also receive less external support measured in terms of per capita aid-flow.

Our study shows that global efforts to promote disaster risk reduction like the Sendai Framework should be aware of this heterogeneity and that more attention in the form of policy support and resource allocation may be needed to support groups of outliers. Finally, although the cost of most disasters that occur globally are small relative to the size of most countries’ national economies, further sub-national analysis will help identify highly vulnerable areas within countries that should be prioritized for development and disaster risk reduction interventions.

Reference:

Mochizuki J & Naqvi A (2019). Reflecting Disaster Risk in Development Indicators. Sustainability 11 (4): e996 [pure.iiasa.ac.at/15757]

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.