Feb 11, 2015 | Risk and resilience
By Junko Mochizuki, IIASA Risk, Policy and Vulnerability Program
As economic losses due to natural disasters rise globally, there is an increasing consensus that the impacts of public and private investments on disaster risk must properly be monitored and evaluated. Such “risk-sensitive investment” is increasingly recognized as good practice in both public and private sector decision making. As we look beyond the Post-2015 development agenda, the incorporation of risk is increasingly becoming a crucial element to sustainable and resilience development throughout the world.
Risk reduction measures such as bamboo shelters and protected water sources can mitigate risks during and following a disaster ©EU/ECHO Malini Morzaria via Flickr
While risk sensitive investment will likely receive great fanfare at the World Conference on Disaster Risk Reduction to be held in Sendai next month, the prospects for achieving such investments are still distant for many developing countries. Despite much recent progress to collect and analyze natural disaster damage, loss, and risk information globally, data quality remains largely poor for these countries. Many developing countries also lack the expertise to interpret and use such data effectively. Even when capacity exists at the technical staff level, political will and financial capacity may not be sufficient to use risk information tangibly and invest in risk reduction activities.
My participation at a recent workshop in Madagascar, the Training Program on Disaster Risk Assessment and Optimization of Public Investments in Reducing Economic Losses in January confirmed my sense of this inadequate on-the-ground reality. With a per capita GDP of approximately $460 per year, Madagascar is one of the poorest countries and, located in the western corner of the Indian Ocean, one of the most highly exposed to natural disaster risk. In 2008 for example, three consecutive cyclones caused more than $330 million in damage and losses. The annual average loss (AAL) from cyclone wind alone is estimated to be $74 million or nearly 1% of the country’s GDP. After two days of capacity-building training on risk assessment and investment decision-making tools such as IIASA’s Catastrophe Simulation (CATSIM) model and Probabilistic Cost-Benefit Analysis (CBA), discussions by technical staff centered around how to fill the large gap between the reality of where they stand now and where they should be in the future.
At the workshop, the participants asked questions such as “How can we strengthen contingency funding and the mainstreaming of disaster risk reduction at the same time?” and “What can a cash stripped government do when donors themselves do not seem to allocate funding based on the tangible needs of a country’s natural disaster risks?”
Workshop in Madagascar. Credit: Junko Mochizuki
Given the unique constraints facing developing countries, solutions must be tailored to their specific needs, however much of the know-how and technological options that have worked in the developed world cannot be easily replicated in a country like Madagascar. There are no easy answers, but the participants’ earnest opinions certainly gave me a positive impression that they are serious about taking disaster risk into account in their development.
As we deliberate the post-2015 goals on climate change, disaster risk reduction, and sustainable development, it is vital that the international community consider these important questions: Given the unique constraints of developing countries, what can our state-of-the-art science produce as usable and useful information for the realities of their decision making? There are more dialogues to be had and research to be conducted incorporating their viewpoints. This workshop provided an important opportunity to exchange ideas and a glimpse into the real challenges of risk sensitive investment in the developing world.
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.
Dec 18, 2014 | Systems Analysis
By Leena Ilmola-Sheppard, IIASA Advanced Systems Analysis Program
When government officials speak about risks, they are usually referring to natural disasters. And it seems in these discussions that the increasing frequency of flooding, droughts, snow storms, and hurricanes have no link to climate change nor mitigation of it.
Last week, I had an opportunity to sit and listen to discussions at the fourth annual Organisation for Economic Co-operation and Development (OECD) High Level Risk Forum. The objective of the forum is to initiate joint development of the national level risk management tools and procedures. National risk directors form their Prime Minister’s Offices and OECD ambassadors spent three rainy days from December 10-12 discussing risk.
The most of the time, the discussion centered around disaster risks. Whatever the theme of the session, the discussion ended up on disaster management, disaster costs, or best practices. This is a theme that was recognized to be of importance in every government. The other risks that were presented were terrorism, the Ebola epidemic, and illicit trade. The missing themes–that I had expected to be on the agenda–were technology related, financial risks and political risks.
Governments usually take risk to mean natural disasters – but missing from most discussions are climate change, technology, financial, and political risks. Here: storm clouds over England in September 2014. Photo Credit: Ched Cheddles via Flickr
Margaret Wahlstrom, Special Representative of the UN Secretary General for Disaster Risk Reduction, gave the best presentation. Her key message war that climate change related issues were not integrated well enough with risk management. Kate White from the US Army Corps of Engineers supported Wahlstrom by stating that the climate change will radically change disaster management goals, procedures, and volume of investment. There should be a strong motivation for that, she said, as disasters are coming more expensive. According to her data, the total cost of hurricane Sandy was 65 billion US$.
The Australian government calculations presented in the meeting are very revealing as well; from Australian government is spending around 400 million AU$ for disaster prevention and response, and 2.6 billion AU$ for recovery. As the Australian example shows, governments have a long way to go from words to action. Governments have not yet realized the role of mitigation, at least not in the budgeting level.
The main theme of this year’s forum was “risk and resilience.” So the word was used a lot in all of the presentations. However, the concept of resilience seems to have many meanings and concrete substance behind the word is ambiguous. Margaret Wahlstrom pointed out that there is a need for a cross-discipline understanding of resilience, as well as for a generic resilience measurement system. Concrete quantitative indicators would help policymakers to assess the development actions needed, improvement achieved, and provide justification for development actions.
The most vivid discussion concerned the relationship of the national risk management and public involvement. Countries such as the United Kingdom promote full transparency and active risk communications, while some of the governments such as Singapore focus on communicating the vision and improvement ideas instead of risks. My interpretation of the discussion is that many of the represented government experts perceive risks to be too complicated to communicate to a general audience. The Nordic countries even go beyond communication, to encourage and support self-organized actions. For example the government supported people when they started to offer shelter and places to sleep for those that got stuck on the road during the October storms of this year, the worst to hit the region in decades.
Read the forum’s summary document draft (PDF)
Note: This article gives the views of the authors, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Dec 5, 2014 | Energy & Climate, Risk and resilience
By Reinhard Mechler & Thomas Schinko (IIASA) with Swenja Surminski (LSE)
(updated 17 December 2014)
As participants in the 20th Conference of the Parties to the Climate Convention (COP 20) in Lima strived to prepare the grounds for a comprehensive climate agreement expected for COP 21 in Paris, negotiators faced key questions that revolve around responsibility and burden sharing.
These questions are not new and have played a key role in the policy and academic discourse on climate change since the beginning of the UNFCCC process.
On the mitigation of emissions, the debate has circled around burden sharing: How should emission reductions be distributed among countries and what are the distributional consequences? On climate impacts and adaptation, the debate has centered on the question of who should pay for adaption and impacts in the global South, given that the global North has been responsible for the bulk of historic anthropogenic greenhouse gas emissions and that the global South will be facing the most severe risks from climate change.
The 20th Conference of the Parties to the Climate Convention (COP 20) opened in Lima on December 1st with big fanfare. It is considered the key milestone event on the road to a comprehensive global deal on climate change that many hope will be struck in Paris in a year’s time. Photo Credit: UN Climate Change
As a partial response, the Green Climate Fund (CGF) was established at COP 16 in Copenhagen to assist developing economies in addressing climate change adaptation and mitigation. The GCF is currently being capitalized by industrialized and emerging economies with the aim of raising 100 billion USD by 2020. At the UN climate talks in Lima the CGF has achieved – thanks to last-minute pledges by several countries – its short term target of mobilizing at least 10 billion USD for the next four years.
Negotiations covering impacts and adaptation have further proceeded, among others, under the umbrella of the Warsaw Loss and Damage Mechanism (WIM), accepted at COP 19 in Warsaw after strong debate as to its meaning and nature- some suggest this mechanism should be part of adaptation, others want it to focus on residual risks that remain after adaptation efforts have been taken.
As a contribution to the WIM discourse, we recently suggested an approach organized around climate risk management, involving the principle of risk layering. We propose that the WIM can build on this principle to distinguish between risk layers to be managed and residual risk layers ‘beyond adaptation,’ thus involving both equity and efficiency aspects: (i) Equity in terms of financially supporting countries particularly vulnerable to climate change in their efforts to manage risks and deal with the burdens ‘beyond adaptation’; (ii) Efficiency in terms of helping to identify best practice for managing risk through well-designed risk prevention, preparedness and financing measures that address high and low frequency climate-related events.
We argue that the risk layering perspective may contribute to taking the WIM discourse over the apparent red negotiation lines if financial support is coupled with well-targeted risk management efforts – such as coordinated nationally through national platforms for disaster risk reduction,
Notions of risk management have been fundamental for the WIM. In Lima the parties discuss whether to accept a two-year work plan, which was put together with input from policy, science and practice. The work plan would give a strong role to risk management and, among others, would seek advice on “enhanced understanding of how comprehensive risk management can contribute to transformational approaches.”
Inauguration ceremony of COP20 in Lima. Credit: Ministerio de Relaciones Exteriores, Peru
Transformational risk management approaches have been promoted by the disaster risk management community over the last few years in seeking a better balance between pre-event risk management and post-event relief and reconstruction (currently 15% of overseas development assistance goes into pre-event efforts vs. 85% into post-event). As a case in point, regional risk pools (mostly covering climate-related risks) have been springing up in the Caribbean, Pacific, and Africa. These efforts are first and foremost focussed on mutually financing risk, but can also be seen as a first step to a comprehensive approach for reducing and financing risks.
For example, the African Risk Capacity (ARC) pool provides quick finance to provide relief after drought events, and has aimed at linking these efforts to improvements in response planning and early warning. Innovatively, the ARC, initially capitalized by donor support and country contributions, currently explores to set up an Extreme Climate Facility for raising funding for any losses that can be related to climate change and may endanger the solvency of the ARC.
The idea is to monitor variability in a composite index of weather indicators over time and understand whether this variability can be attributed to climate change, which would then lead to a pay-out to the fund from this facility. While promising, the link to attribution is a key scientific challenge, and a number of principled and implementation-related questions for this particular facility as well as for the WIM in general remain open. These open questions will need further attention by science, policy, practice and civil society in the coming months in order to help achieve progress on the Loss and Damage Mechanism.
Reference
Reinhard Mechler, Laurens M. Bouwer, Joanne Linnerooth-Bayer, Stefan Hochrainer-Stigler, Jeroen C. J. H. Aerts, Swenja Surminski & Keith Williges. 2014. Managing unnatural disaster risk from climate extremes. Nature Climate Change. March 26, 2014. http://www.nature.com/nclimate/journal/v4/n4/full/nclimate2137.html
Note: This article gives the views of the authors, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Jun 17, 2014 | Risk and resilience
By Junko Mochizuki, IIASA Risk, Policy, and Vulnerability Program
Catastrophic natural disasters such as Typhoon Haiyan of 2013 and Thailand’s flood of 2011 have highlighted the need for improved preparedness and proactive planning in developing countries. As population and economic activities continue to grow in hazard-prone areas, the economic costs of natural disasters are expected to rise globally, threatening the prospects for poverty alleviation and sustainable development.
Workshop participants learn to use IIASA’s CATSIM tool.
Cambodia is no exception. Frequent natural disasters continue to strain the country’s meager fiscal resources. Flood-related expenditure in particular has increased in recent years. In 2013, the Ministry of Public Works and Transport, in charge of major road construction, diverted approximately 20% of its non-maintenance budget for recovery and reconstruction. Ministry of Rural Development, in charge of rural sanitation, health and agricultural projects, faces similar constraints. Some of the costliest disasters have occurred in recent years: the 2013 flood cost $1 billion and the 2011 flood $624 million in damage and losses. The World Bank recently estimated that the annual average expected cost of natural disasters in Cambodia is approximately 0.7% of GDP.
On June 10-11, I participated in an IIASA workshop on this topic in Phnom Penh, Cambodia, along with IIASA researcher Keith Williges. Our goal was to train Cambodian policymakers on the concept of disaster risk and need for better fiscal preparedness, using IIASA’s CATSIM model. Like many low-income countries, Cambodia’s ability to access resources through taxation and external loans is limited. Using CATSIM, policymakers can evaluate alternative options for preparedness including hazard mitigation and reserve fund and assess how further accumulation of economic assets may raise risk in the longer term.
In 2011, Cambodia experienced heavy flooding after strong typhoons and heavy rain. Photo credit: Thearat Touch EU/ECHO
Risk-based planning is still uncommon globally and particularly so in developing countries like Cambodia. Year after year, scarce resources are wasted because national and local policymakers do not have access to good risk information such as risk maps and timely weather forecasts. This could change, however, as detailed risk maps are becoming available and a new standard operation procedure for early warning system is now being prepared under this project. The CATSIM workshop has also familiarized policymakers with the concept of economic and fiscal risk of natural disasters.
While policymakers understand the potential costs rising from natural disasters, the real challenge is to link such risk information strategically. Without concrete advice on how risk maps can prioritize budget allocation, for example, it is unlikely that decision makers will change their old practice of non-risk based planning. In addition to quantifying and communicating economic, social, and environmental benefits of risk reduction and management, further barriers including financial, institutional and cognitive gaps must also be addressed. Bridging science with policy implementation requires strategic linking, and the CATSIM training marked an important first step for improved risk-based planning and co-production of knowledge in Cambodia.
More information:
Jan 28, 2014 | Risk and resilience
Interview with IIASA risk expert Nadejda Komendantova
In a new study, IIASA Risk, Policy, and Vulnerability Program researcher Nadejda Komendantova and colleagues from Germany and Switzerland examined how natural hazards and risks assessments can be incorporated into decision-making processes in Europe on mitigation of multiple risks.
A cyclist rides along the flooded Danube River in Braila, Romania, in 2010. Credit: cod_gabriel on Flickr
Why did you decide to conduct this study?
European decision makers currently have a number of methods that they can use to assess natural hazards and risks and apply to the decision-making process. These methods include risk and hazard assessments, probabilistic scenarios, and socio-economic and engineering models. The variety of tools is enormous and volume of knowledge and data is growing. However, the process of communication between science and practice leaves a lot of open questions for research.
Researchers have developed a few tools to provide multiple risk assessment of a given territory. But even though these models have been tested by operational and practicing stakeholders, there is limited information about how useful the models are for civil protection stakeholders to use in practice. In order to communicate results from science to practice and make it possible for decision-makers to use such tools, it helps to involve decision-makers in the development process. Participatory modeling, which is an important part of risk governance, allows us to not only to take into consideration the facts, but also values and judgments that decision-makers bring to their actions.
What questions did you aim to answer in your study?
The decision-making process becomes even more complex when we talk about situations with multiple risks – multi-risks – which involve interactions between several risks. How will decision-maker will prioritize their actions on risk mitigation or on resources allocation when facing not single but multiple risks? We also wanted to find out if the tools developed by science such as decision support models could be suitable for these tasks. Another question is if there are differences in perceptions of the usability of decision-support tools between different stakeholders, such as academia (based on more theoretical considerations) and civil protection (based on practice).
What are the multiple risks or hazards that face Europe?
Across Europe, people suffer losses not just from single hazards, but also from multiple events in combination. The most important hazards for Europe are earthquakes, landslides, volcanic eruptions, tsunamis, wildfires, winter storms, and floods along both rivers and coastlines.
What methods did you use to conduct your study?
To answer our research questions we collected feedback from civil protection stakeholders on existing risk and hazard assessment tools as well as on the generic multi-risk framework to understand interrelations between different risks, such as conjoint and cascade effects. The new study was based on a method developed by Arnaud Mignan at ETH Zürich, with a decision-support tool developed by Bijan Khazai at the Karlsruhe Institute of Technology. Through a participatory approach, the decision-support tool allowed stakeholders to assign relative importance to the losses for different sectors for each of the scenarios likely to occur in the region.
We collected data through questionnaires on existing risk assessment tools in Europe and their implementation. Then, using the new framework, we conducted focus group discussions in Bonn and Lisbon, and decision-making experiments applying the developed tools. Afterwards we had a chance to collect feedback from stakeholders.
What did you find?
The study showed that general standards for multi-risk assessment are still missing—there are different terminologies and different methodologies related to data collection, monitoring, and output. According to stakeholders from practice, this variety of data, assessment methods, tools and terminology might be a barrier for implementation of the multi-risk approach.
The study also found a sharp divide in understanding of the usability of the tools and areas for their application. Academic stakeholders saw the risk-assessment tools as being useful to understand loss and communication of multi-risk parameters. The stakeholders from practice instead saw the tool as more useful for training and educational purposes as well as to raise awareness about possible multi-risk scenarios.
What should be done to help decision-makers make better decisions?
The study made it clear that we need to work on training and education, both for policymakers and the public. The models we have developed could be useful for educating stakeholders about the usefulness of a multi-risk approach, and to disseminate these results to the general public. It was recommended to use the tools during special training workshops organized for decision-makers on multi-risk mitigation to see possible consequences of a multi-hazard situation for their region. Participatory modeling, involving cooperation between scientists and decision-makers from practice, could not only improve communication processes between science and policy. In addition, decision-support models can become a part of dialogue to help to avoid judgment biases and systematic errors in decision-making and to help in complex decision-making process grounded on human rationality and judgment biases.
Reference:
Nadejda Komendantova, Roger Mrzyglocki, Arnaud Mignan, Bijan Khazai, Friedemann Wenzel, Anthony Patt, Kevin Fleming. 2014. Multi-hazard and multi-risk decision support tools as a part of participatory risk governance: Feedback from civil protection stakeholder. International Journal of Disaster Risk Reduction. http://www.sciencedirect.com/science/article/pii/S221242091300068X
Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
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