Project A Project B Costs 100 million Costs
Project A Project B Costs $100 million Costs $90 million Prevents on average $20 million of losses per years Prevents on average $5 million of losses per years 2
Project A Project B Costs $100 million Costs $90 million Prevents on average $20 million of losses per years Prevents on average $5 million of losses per years 3
Two points in this presentation • Physical risks have to be measured with respect to the ability of the affected population or entity to manage these risks. Monetary values alone are insufficient. • Uncertainty makes standard approaches inapplicable – we are moving from cost-benefit analysis to stress-tests
5
6
7
8
9
10
11
13
These estimates can also be used to target intervention within countries Prevents $1 million per year in asset losses In Binh Dinh (resilience 69%) In Kien Giang (resilience 29%) Gains in terms of well-being $3. 4 million Gains in terms of well-being $1. 4 million
What is the right methodology to ensure new investments and decisions account for climate risks?
Deep uncertainty makes standard cost-benefit approach inapplicable… Illustration on wetlands in Colombo • Long-term decisions need to take into account the multiple possible changes in local climate (and nonclimate) conditions • In practice, the World Bank is trying to move toward “stress testing” development strategies and projects Flood losses in the city for different climate and socioeconomic scenarios • A 1. 5 degree target would affect the likelihoods of these changes – but in an unknown manner Source: Rozenberg et al 2015 Today’s city If wetlands are not protected
Deep uncertainty makes standard cost-benefit approach inapplicable… Illustration on wetlands in Colombo • Long-term decisions need to take into account the multiple possible changes in local climate (and nonclimate) conditions • In practice, the World Bank is trying to move toward “stress testing” development strategies and projects • The likelihoods of these changes are not quantifiable at this stage Source: Rozenberg et al 2015 Today’s city If wetlands are not protected
- Slides: 18
