The Global Facility for Disaster Reduction and Recovery

The Global Facility for Disaster Reduction and Recovery Making Good Decisions Under Uncertainty Marianne Fay, World Bank

Good Decision Making Is Challenged By Uncertainty and Disagreement Rapid Changes Uncertain Future Competing Priorities Shanghai 1990 vs. 2010 Climate Change Conservation vs. Development 2

The stakes are high Flood Protection Energy Investments Land Use Policies Transportation Systems 3

Agenda • A real case • Traditional “Predict-then-Act” Planning • Decision-making under uncertainty 4

Ho Chi Minh City As Context For Our Discussion Over 15 years, HCMC has planned multi -billion dollar flood investments using best available projections 5

Conditions have diverged from projections and the city is at significant risk 6

Today, HCMC seeks an innovative, integrated flood risk management strategy 7

Risk = Hazard x Exposure x Vulnerability Hazard Exposure • Future rainfall intensity • Population in the study area • Height of the Saigon River • Urban form Vulnerability • Vulnerability of population to flood depth Risk Model Risk = Expected Number of People Affected By Floods Each year 8

Model Calculates Risk From Six Parameters Of Hazard, Exposure, Vulnerability Rainfall Increase River Height Population Urban Form Poverty Rate Vulnerability 9

Each Parameter Could Take A Range of Values Rainfall Increase River Height Population Urban Form Poverty Rate Vulnerability +0% + 35% 20 cm 100 cm 7. 4 M 19. 1 M Growth in Outskirts 2. 4 % Not Vulnerable Growth in Center 25 % Very Vulnerable 10

We Can Use This To Make Projections Rainfall Increase River Height Population Urban Form Poverty Rate Vulnerability 10% 30% +0% 30 cm 20 cm This projection assumes little climate change and relatively small population + 35% 70 cm 100 cm 11 M 17 M 19. 1 M 7. 4 M Growth in Center Growth in Outskirts 5% 2. 4 % Not Vulnerable 18% 25 % This projection assumes more climate change. It also has a larger, poorer, but Very Vulnerable less vulnerable population 11

Traditional Planning Asks “What Will The Future Bring? ” Predict Act 12

Most likely projection We could rely on the most likely projection for decision making… 10% 30 cm 11 M 5% Risk Model Risk From Policy In Your Projection Policy 13

But there can be disagreement about what is the most likely projection The Meteo-France model, from IPCC

Climate models can disagree with each other The Meteo-France and the Australian model, from IPCC

… and we have a lot of models… (Epistemic uncertainty)

… whose results depend on future climate policies and socio-economic trends…

It can be difficult to make good projections – even with good data Gross national product (trillions of 1958 dollars) • In the early 1970 s forecasters made projections of U. S energy use based on a century of data 2. 2 2. 0 1. 8 1. 6 1. 4 1. 2 1. 0. 8. 6. 4. 2 0 1975 Scenarios 1973 1890 1900 1973 1910 0 20 Historical trend continued 40 1970 1960 1950 1940 1929 60 80 100 120 140 Energy use (1015 Btu per year) 160 180

Believing Forecasts of the Unpredictable Can Contribute to Bad Decisions Gross national product (trillions of 1958 dollars) • In the early 1970 s forecasters made projections of U. S energy use based on a century of data …they were all wrong 2. 2 2. 0 1. 8 1. 6 1. 4 1. 2 1. 0. 8. 6. 4. 2 0 1975 Scenarios 2000 Actual 1990 1890 1900 1973 1910 0 20 Historical trend continued 1980 1977 1973 40 1970 1960 1950 1940 1929 60 80 100 120 140 Energy use (1015 Btu per year) 160 180

Scenario Planning asks: What Might The Future Bring? ” Imagine Possibilities Act 20

10% 30 cm 11 M We may chose to use several different scenarios for decision making… 17 M 18% 25 cm Risk Model Risk From Policy In Your Scenarios Policy 21

1000 Scenarios Few Scenarios Leaves Many Possible Futures Uncovered…Instead Use 1000 Scenarios For Decision Making… Risk Model Risk From Policy In 1000 Scenarios Policy 22

Use many scenarios to identify robust decisions • Decisions that perform well in many scenarios even if not optimal in any single one. • Examples… Get an education even if you hope to be a basketball star Plant drought-resistant cassava even if water-sensitive maize fetches higher prices 23

Robust decision-making • Uses very many scenarios to find – Limitations of current strategies – Strategies that are truly robust • Focus on understanding policies & their weaknesses – not on making projections 24

Under What Conditions Does The Current Infrastructure Keep Risk Low? It protects our city if… < 6% increase in rainfall intensity < 45 cm increase in river height < 5% poverty rate 6% 45 cm 5% 25

Is it reasonable to assume these conditions will hold? 45 cm rise Infrastructure 6% increase 26

Should We Rely On Current Infrastructure? Probably Not. NOAA SLR + SCFC Subsidence 75 cm 45 cm rise Even if stakeholders disagree about the future, they can probably agree that current infrastructure will not be sufficient Infrastructure MONRE SLR Estimate 30 cm 6% increase IPCC SREX Mid Value (20%) IPCC SREX High Value (35%) 27

What options usefully complement the current infrastructure? And How? 2. Raise Homes 1. Rely on current infrastructure 4. Manage Groundwater 3. Relocate Areas 5. Capture Rain Water 28

How Will Adding These Options Improve Our Strategy? Relocate (17%, 100 cm) Rainwater (10%, 100 cm) NOAA SLR + SCFC Subsidence (75 cm) Ministry of Urban Planning Groundwater (7%, 55 cm) Infrastructure Ministry of Environment Elevate (23%, 55 cm) Adding these measures improves robustness This “map” helps stakeholders have structured discussions MONRE SLR Estimate 30 cm IPCC SREX Mid Value (20%) IPCC SREX High Value (35%)

What Are Tradeoffs Between Robustness And Cost? Rainwater (10%, 100 cm) Relocate (17%, 100 cm) Stakeholders debate about how much robustness they can afford (which is much more useful than debating what the future will be) NOAA SLR + SCFC Subsidence (75 cm) Groundwater (7%, 55 cm) Elevate (23%, 55 cm) Infrastructure MONRE SLR Estimate 30 cm High Cost IPCC SREX Mid Value (20%) IPCC SREX High Value (35%) Low Cost

Robust Decision Making Asks “What Are The Limitations of Our Plan and How Can We Improve It? Predict-then-act Robust Decision Making What will the future be? Under what future conditions does our plan perform poorly? What is the best near-term decision given our prediction? How sensitive is our decision to our prediction? Can we modify the plan to make it more robust? What are the tradeoffs between robustness, costs, feasibility, etc. ?

For More Information…. Hallegatte et al. “Investment Decision Making under Deep Uncertainty: Application to Climate Change, ” Policy Research Working Paper WPS 6193, World Bank, Sept. 2012 Lempert et al. , “Ensuring Robust Flood Risk Management in Ho Chi Minh City, ” Policy Research Working Paper WPS 6465, World Bank, May 2013. 32

GFDRR’s Resilience to Climate Change Thematic Program Sofia Bettencourt, Lead Adaptation Specialist GFDRR

GFDRR’s Resilience to Climate Change Thematic Program • Based on “Building Resilience” report • Recognizes that: ü Most disasters are weather-related ü Adaptation and DRM use similar approaches • Internationally, the two agendas are coming together under Loss and Damage mechanism

The Resilience to Climate Change Thematic Program GFDRR Resilience to Climate Change Thematic Program Help formulate enabling policies and investments integrating climate and disaster risk into development PILLAR 1 PILLAR 2 PILLAR 3 Risk Identification Risk Reduction Preparedness PILLAR 4 Financial Protection PILLAR 5 Resilient Reconstruction q A thematic funding window under the GFDRR Multidonor Trust Fund q Supports same pillars and outputs, but q Activities selected through a climate eligibility filter 35

Climate Eligibility Criteria Activities: 1. Linked to resilience to weather-related disasters and climate change 2. Benefiting Low-Income or Low-to. Medium Income Countries at high risk (including global and regional initiatives) 3. With potential to leverage wider investment and/or policy reforms 4. Supporting one or more of GFDRR strategic pillars and clearly contributing to its core results 36

Examples of Potential Activities 1. Climate and Disaster Risk Management in the Andes –risk assessment applied to “climate proof” priority sectors 38

Climate Resilient Infrastructure

Examples of Potential Activities 2. Africa Regional Hydro-Met – strengthened capacity of regional and national services 40

Hydromet – diagnosing weaknesses

Examples of Potential Activities 3. Just-in-time Assistance - use of robust decision making (e. g. Kazakhstan); assistance to Togo on coastal erosion control 42

Managing Settlements at Risk East Coastline in 1955 LOME, TOGO Coastline in 2009 West

Jan. 2011 Nov. 2007 Sept. 2013 Sept. 2008

Examples of Potential Activities 4. Priority analytical work – Global study on poverty, climate and disasters; Knowledge notes on critical topics (e. g. preventive resettlement); 45

Proposed Steering Mechanism • An Advisory Group on Climate Resilience as part of the CG • Activities presented as a sub-set of the GFDRR Work Plan 46

For questions please contact GFDRR’s Climate Resilience Team: Sofia Bettencourt, Lead Adaptation Specialist, GFDRR, Climate Change Group Vice Presidency sbettencourt@worldbank. org Robert Reid Disaster Risk Management and Adaptation Specialist GFDRR, Climate Change Group Vice Presidency rreid 1@worldbank. org 47