Multiple benefits of Disaster Risk Reduction investments

By Julian Joseph, research assistant in the Water Security Research Group

Julian Joseph explains the concept of the triple dividend of disaster risk reduction investments based on the application of a novel economic model applied to a case study undertaken in Tanzania and Zambia.

What are the benefits of Disaster Risk Reduction (DRR) investments such as dams and the introduction of drought-resistant crops in agriculture for an economy? They are threefold and called the “triple dividend” of DRR investments. The first dividend comprises the direct effects of DRR investments, which limit damage to houses, infrastructure, and other physical assets and prevent death and injury. The second dividend unlocks the economic potential of an economy because risk reduction drives people and businesses to invest more, as they expect less of what they invest in to be destroyed by disasters, while the third dividend is comprised of development co-benefits through other uses the investments provide.

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Using a new macroeconomic model called DYNAMMICs, my colleagues and I have found that there is often a significant growth effect for the economy attached to investing in mitigation measures like dams and drought resistant crops, which is commonly underestimated in traditional models. One reason for this is the focus of other models on only the first, direct dividend. We specifically looked into the examples of Tanzania and Zambia, which show that governments and other stakeholders in developing countries can spur economic growth by investing in DRR measures, thus increasing future earnings and creating a safe environment for investments into other economic activities.

In Tanzania and Zambia, floods affect tens of thousands of people each year (on average 45,000 or .08% of the population in Tanzania and 20,000 or .11% of the population in Zambia). Droughts have more widespread consequences and already affect 11.8% of the population in Tanzania and 19% of Zambians who often lose all or parts of their harvest. This poses an imminent threat to food security in countries where substantial shares of the population rely on subsistence farming as their primary source of income. Given the effects of climate change, these numbers and their ramifications are bound to become ever more pressing issues. However, policymakers, institutions, enterprises, and individuals tend to underinvest in adaption measures.

A promising avenue for demonstrating the potential of DRR investments is offered by including all economic growth effects they invoke into policy analysis, thus showing that besides risk reduction and post-disaster mitigation of destruction, investing in DRR measures can help countries achieve many of their other development goals as well.

We tend to only think of the first dividend of DRR investments, the direct effects of which stop people from being immediately affected by disasters. In the case of Tanzania and Zambia, we examined, among others, the benefits of constructing additional dams. The direct benefits of dams lie in the safeguarding of livelihoods, infrastructure, housing, and agricultural production. These are seen as the first dividend, called the ex-post damage mitigation effect. There are however also additional co-benefits.

In both Tanzania and Zambia, large shares of the population are heavily dependent on agriculture, which makes the introduction of drought-resistant crop varieties such an additional benefit. These crop varieties do not only help farmers preserve their yields in times of disastrous droughts, but additionally support farmers by generating higher yields, even in the absence of disaster. This effect is boosted by the lowered risk for the loss of crops, which spurs investment into farming activities and inputs. Farmers who do not fear losing their entire harvest can, and generally will, invest more into the production of this crop – an example of the second type of dividend, the ex-ante risk reduction effect. This type of economically beneficial effect materializes regardless of the onset of disaster.

The same is true for the third type of dividend, the co-benefit production expansion effect, which is especially relevant for the advantages of dams. The power generation capability of dams, leads to much larger economic gains than the two other dividends combined. In countries such as those at hand with frequent power cuts and comparably low levels of electrification, especially in rural areas, the additional electricity generated can lead to particularly pronounced positive effects by supplying economic actors with access to power. In other scenarios, the provision of ecosystem services is also an important effect falling into this category.

The results we obtained using the DYNAMMICs model are promising: Constructing only two additional dams leads to a 0.3% increase of GDP growth in Tanzania for the next 30 years (0.2% in Zambia) with results largely (97%) driven by the co-benefit production expansion effect. Similarly, the introduction of drought resistant crops and exposure management (i.e., land use restrictions) significantly boost economic growth perspectives. Finally, introducing insurance is a driver for a reduction in the variance of GDP growth, which helps to reduce uncertainty for everyone in the economy. Modeling in such a fashion is therefore an important means of weighing policy options for DRR against each other and for determining optimal levels of investment.

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.

Restructuring the food system after COVID-19

By Husam Ibrahim, International Science Council (ISC)

The IIASA-ISC Resilient Food Systems report looks at the vulnerabilities in the food system and recommends changes to move forward through COVID-19 recovery plans that prioritize society’s least protected.

Credit: Adam Islaam – IIASA

The COVID-19 pandemic has amplified and brought to the fore existing vulnerabilities and global interdependency in societal institutions, including the food system. The pandemic has exaggerated the scarcity in some areas’ food supplies and highlighted the divide between the haves and have-nots.

The number of people suffering from poverty had been on a steady decline, going from 2 billion people in 1990 to 740 million in 2015. However, for the first time in decades, the global poverty rate is once again increasing due to the pandemic. Early estimates suggest that an additional 88 million to 115 million people may suffer extreme poverty, with the total rising to as many as 150 million by 2021.

The socioeconomic impacts of the pandemic are further exacerbating inequalities within and between  countries, and intensifying the rise in food insecurity observed since 2014. It has been estimated that the effects of the pandemic could have longer-term repercussion for low-income countries, greatly undermining their development prospects, unless sufficient international support is provided.

In order to explore how the world can recover from the crisis sustainably, IIASA and the International Science Council (ISC) launched the Consultative Science Platform: Bouncing Forward Sustainably Post COVID-19. The two organizations have drawn on their combined strengths, expertise, and large scientific communities, to come up with a set of insights and recommendations based on a series of online consultations that have brought together over 200 experts from all regions of the world. The Resilient Food Systems report is a contribution to this effort.

Resilient Food Systems

Transformations within reach:
Pathways to a sustainable and resilient world

 

 

 


While the pandemic exerted supply and demand shocks across economic sectors, the report highlights that the food system was particularly affected by impacts on employment and income in relation. This is because international food supply has been strong, and the supply-demand ratios have remained stable throughout the pandemic. However, job and income losses, insufficient safety nets, and constraints on local access to food created conditions for food insecurity.

Lack of access to basic services, such as water and sanitation, and the prevalence of informal employment, have forced many people in low- and middle-income countries to make the impossible choice between following physical distancing measures or maintaining basic income and access to food. Before the pandemic, an estimated 3 billion people were unable to afford a healthy diet on a consistent basis.

Therefore, the report argues that the emphasis on efficiency – which has in large part been driving the evolution of food systems – must be balanced with an emphasis on concerns related to resilience and equity. With this, the food system can combat future crises while serving society’s most vulnerable. The recovery process should be harnessed to strengthen the preparedness of the food system to manage multiple risks.

As highlighted by the pandemic, this would entail expanding the scope and reach of social safety nets and protection schemes. Future food systems should be characterized by better pricing-in of environmental externalities. The sustainable management of natural resources should be seen as an integral part of strengthening the resilience of food systems, recognizing also the close linkage between human and planetary health concerns.

‘ In light of resilience and sustainability concerns the focus should be on using agricultural areas that we already have, rehabilitating degraded environments, and looking into the potential of diversification of practices and technologies.’

Frank Sperling, Senior Project Manager, IIASA

The role of different agricultural practices in building resilience needs to be looked into. This includes high-tech solutions like biotechnology, as well as an increase in the trade of agricultural goods, a sustainable increase in crop yields, and using underutilized crops to their full potential.

This also means protecting biological diversity, minimizing the destruction of pristine natural environments and focusing on the regeneration of natural ecosystems.

The report also states that strong international institutions are necessary to coordinate policies and limit tensions between multiple social, economic, and environmental interests represented within food systems internationally. Further funding, integration, and emphasis on context-specific solutions can help make changes, and emerging action-oriented knowledge and funding platforms are being used to help transform the food systems.

‘It is very important that these reforms are characterized by global collaboration, keeping nutritional security at the forefront with society’s most vulnerable people in mind, so that no one gets left behind.’

Frank Sperling, Senior Project Manager, IIASA

For more information on how COVID-19 is impacting the food system, and the lessons learned from the pandemic, read the IIASA-ISC Resilient Food Systems Report.


You can also watch the discussion on Strengthening Science Systems as part of the launch event for the Bouncing Forward Sustainably: Pathways to a post-COVID World, which explores the key themes of Sustainable Energy, Governance for Sustainability, Strengthening Science Systems and Resilient Food Systems.

This blog post was first published on the website of the International Science Council. Read the original article here.

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.

Modeling ancient history to inform the future

By Marcus Thomson, IIASA alumnus and a researcher at the National Center for Ecological Analysis and Synthesis (NCEAS), the University of California, Santa Barbara

IIASA alumnus Marcus Thomson explains how what we have learnt about prehistoric farming cultures can be used to provide useful insights on human societal responses to climate change.

The climate of the western half of the North American continent, between the Rocky Mountains and the Pacific coastal region, is dry by European standards. The American Southwest, in particular, centered roughly on the intersection of the states of Colorado, New Mexico, Arizona, and Utah, is predominantly desert between high mountain plateaus. It is, and has always been, a challenging environment for farmers. Yet the prehistoric Southwest was home to complex maize-based agricultural societies. In fact, until the 19th century growth of industrial cities like New York, the Southwest contained ruins of the largest buildings north of Mexico — and these had been abandoned centuries before the Spanish arrived in the Americas.

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For more than a century, researchers have pored over data, from proxies of paleo-environmental change, to historiographies collected by explorers, to archaeology and computational models of human occupation, and produced a detailed picture of the socio-environmental, economic, and climatic conditions that could explain why these sites were abandoned. While details vary in fine-grained analyses of the various sub-groupings of peoples in the region, the big picture is one of societal transformation in adapting to climate change.

Also important is just how the climate changed during the period, because similar dynamics are expected to emerge in the future as a consequence of global warming. European historians point to a medieval era with generally warmer mean annual temperatures. In the Southwestern United States however, which is more sensitive to changes in drought than temperature, the period between roughly AD 850 to 1350 is known as the Medieval Climate Anomaly (MCA). The warm, dry MCA was followed by a long stretch of increased changes in the availability of water, known as the Little Ice Age (LIA). More frequent “warm droughts” at the end of the MCA, and generally increasing changes in water resources at the onset of the LIA, is thought to be a good analogy for future conditions in western North America.

When I had the good fortune to visit IIASA as a participant of the Young Scientists Summer Program (YSSP) in 2016, I worked with research scholars Juraj Balkovič and Tamás Krisztin to develop a model of ancient Fremont Native American maize. The Fremont were an ancient forager-farmer people who lived in the vicinity of modern Utah. We used a climate model reconstruction of the temperature and rainfall between AD 850 and 1450 to drive this maize crop model, and compared modeled crop yields against changes in radiocarbon-derived occupations – in other words, the information gathered from carbon dated artifacts that show that an area was occupied by a particular people – from a few archaeological areas in Utah.

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Among our findings was that changes in local temperatures appeared to play a larger role in the lives, practices and habits of the people who lived there than changes in regional, long-term temperature conditions [1]. Later, while a researcher at IIASA myself, I returned to the subject with one of our coauthors, professor Glen MacDonald of the University of California, Los Angeles, using an expanded geographic range and a more sophisticated treatment of radiocarbon dated occupation likelihoods.

We used the climate model to reconstruct prehistoric maize growing season lengths and mean annual rainfall for Fremont sites. We found that the most populous and resilient Fremont communities were at sites with low-variability season lengths; and low populations coincided with, or followed, periods of variable season lengths. This study confirmed the important dependence on climate variability; and more importantly, our results are in line with others on modern smallholder farming contexts.

More details on our latest study [2] have just been published online in Environmental Research Letters (ERL). It will become part of an ERL special issue looking at societal resilience drawing lessons from the past 5000 years. Studies like these can give useful insights on human societal responses to climate change because these ancient civilizations are, in a sense, completed experiments with complex human-environmental systems. For decision makers, who must plan early to commit resources to offset the effects of future climate change on smallholder farmers in similarly drought-sensitive, marginally productive environments, these studies indicate that year-to-year climatic variability drives occupation change more than long-term temperature change.

References:

[1] Thomson MJ, Balkovič J, Krisztin T, & MacDonald GM (2019). Simulated impact of paleoclimate change on Fremont Native American maize farming in Utah, 850–1449 CE, using crop and climate models. Quaternary International, 507, pp.95-107 [pure.iiasa.ac.at/15472]

[2] Thomson MJ, & MacDonald GM (In press). Climate and growing season variability impacted the intensity and distribution of Fremont maize farmers during and after the Medieval Climate Anomaly based on a statistically downscaled climate model. Environmental Research Letters.

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.

Cost effective solutions to manage nutrient pollution in the Yangtze

By Maryna Strokal, Department of Environmental Sciences, Water Systems and Global Change, Wageningen University and Research, The Netherlands

Maryna Strokal discusses a new integrated approach to finding cost-effective solutions for nutrient pollution and coastal eutrophication developed with IIASA colleagues.

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Have you ever wondered why the water in some rivers appear to be green? The green tinge you see is due to eutrophication, which means that too many nutrients – specifically nitrogen and phosphorus – are present in the water. This happens because rivers receive these nutrients from various land-based activities like run-off from agricultural fields and sewage effluents from cities. Rivers in turn export many of these nutrients to coastal waters, where it serves as food for algae. Too many nutrients, however, cause the algae and their blooms to grow more than normal. Because algae consumes a lot of oxygen, this lowers the available oxygen supply in the water, killing off fish and other marine life. Some algae can also be toxic to people when they eat seafood that have been exposed to, or fed on it. Polluted river water on the other hand, is unfit for direct use as drinking water, or for cooking, showering, or any of our other daily needs. Before we can use this water, it needs to be treated, which of course costs money.

To better understand and address these issues, I worked with colleagues from IIASA, Wageningen University, and China to develop an integrated approach to identify cost-effective solutions (read cheapest) to reduce river pollution and thus coastal eutrophication. Our integrated approach takes into account human activities on land, land use, the economy, the climate, and hydrology. We implemented the new approach for the Yangtze Basin in China.

The Yangtze is the third longest river in the world and exports nutrients from ten sub-basins to the East China Sea, where the coast often experiences severe eutrophication problems that may increase in the coming years. The Chinese government has called for effective actions to ensure clean water for both people and nature.

In our paper on this work, which was recently published in the journal Resources, Conservation, and Recycling, my colleagues and I conclude that reducing more than 80% of nutrient pollution in the Yangtze will cost US$ 1–3 billion in 2050. This cost might seem high, but it is actually far below 10% of the income level in the Yangtze basin. We also identified an opportunity in the negative or zero cost range, which would result in a below 80% reduction in nutrient export by the Yangtze. This negative or zero cost alternative involves options to recycle manure on land and reduce the use of chemical fertilizers (Figure 1). More recycling means that farmers will buy less chemical fertilizers and potential savings can then compensate for the expenses related to recycling the manure. We also illustrated the costs that would be involved for ten sub-basins to reduce their nutrient export to coastal waters.

Figure 1. Summarized illustration of eutrophication causes and cost-effective solutions for reducing nutrient export by Yangtze and thus coastal eutrophication in the East China Sea in 2050.

Recycling manure on cropland is an important and cost-effective solution for agriculture in the sub-basins of the Yangtze River (Figure 1). Manure is rich in the nutrients that crops need, and opting for this alternative instead of chemical fertilizers avoids loss of nutrients to rivers, and thus ultimately to coastal waters. Current practices are however still far from ideal, with manure – and especially liquid manure – often being discharged into water because crop and livestock farms are far away from each other, which makes it practically and economically difficult to transport manure to where it is needed. Another reason is the historical practice of farmers using chemical fertilizers on their crops – it is simply how they are used to doing things. Unfortunately, the amounts of fertilizers that farmers apply are often far above what crops actually need, thus leading to river pollution.

The Chinese government are investing in combining crop and livestock production, in other words, they are creating an agricultural sector where crops are used to feed animals and manure from the animals is in turn used to fertilize crops. Chinese scientists are working with farmers to implement these solutions.

In our paper, we showed that these solutions are not only sustainable, but also cost-effective in terms of avoiding coastal eutrophication. We invite you to read our paper for more details.

References

Strokal M, Kahil T, Wada Y, Albiac J, Bai Z, Ermolieva T, Langan S, Ma L, et al. (2020). Cost-effective management of coastal eutrophication: A case study for the Yangtze River basin. Resources, Conservation and Recycling 154: e104635. https://doi.org/10.1016/j.resconrec.2019.104635.

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.