back x

From Risk to Resilience Working Paper Series

 

From Risk to Resilience #1: The Cost-Benefit Analysis Methodology

Authors: Reinhard Mechler; The Risk to Resilience Study Team

This paper addresses Cost-Benefit Analyses (CBA) and their roles in Disaster Risk Reduction (DRR). It outlines the different steps, opportunities, and key constraints of using CBA for disaster risk management, and is the foundation for the three applications in the working paper series (From Risk to Resilience WP4, WP5, and WP7). It is important while conducting CBA to acknowledge the complexity of assessing risks, especially risks induced by climate change. This paper also highlights the importance of CBA as a process, not just an outcome; it is important to keep the process transparent as sometimes this process is more valuable in decision making than the CBA itself. Shared Learning Dialogues are a good way to keep the process transparent and utilize it to inform project implementation and keep all stakeholders involved. This paper concludes that CBA is a useful tool as long as it is participatory and helps mainstream DRR among a diversity of stakeholders who then plan interventions together.

Citation: Mechler, R., & The Risk to Resilience Study Team. (2008). The cost-benefit analysis methodology (Risk to Resilience Working Paper No. 1). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.

Funded By: UK Department for International Development (DfID); National Oceanic and Atmospheric Association (NOAA); Canadian International Development Research Centre (IDRC).


 

From Risk to Resilience #2: Pinning Down Vulnerability: From Narratives to Numbers

Authors: Daanish Mustafa; Sara Ahmed; The Risk to Resilience Study Team

Social vulnerability analyses have typically relied upon narratives to capture the nuances of the concept. While narratives have enhanced our understanding of the multiple drivers of vulnerability, they have had limited influence on hazards and climate adaptation policy. This is partially a function of the different needs and goals of the policy and research communities. The former prioritizes generalized quantitative information, while the latter is more concerned with capturing complexity. A theoretically driven and empirically tested quantitative vulnerability and capacities index (VCI) for use at the local scale is presented to help connect vulnerability research and policy. There are four versions of the index for use in rural and urban contexts at the household and community levels. There can be an infinite number of drivers of vulnerability,but the VCI draws upon 12 indicators to represent material, institutional and attitudinal aspects of differential vulnerability and capacities.

Citation: Mustafa, D., Ahmed, S., Saroch, E., & Bell, H. (2011). Pinning down vulnerability: From narratives to numbers. Disasters, 35, 62-86. doi: 10.1111/j.1467-7717.2010.01193.x


 

From Risk to Resilience #3: Downscaling: Potential Climate Change Impacts in the Rohini Basin, Nepal and India

Authors: Sarah Opitz-Stapleton; Subhrendu Gangopadhyay; The Risk to Resilience Study Team

This paper presents a new statistical technique for downscaling climate information from general circulation models so that this information can be used as an input to economic evaluation of options for reducing flood and drought risks and responding to the impacts of climate change.

Floods, droughts, and other weather related disasters are a major factor contributing to endemic poverty in regions such as South Asia, and this is likely to increase as climate change proceeds. Risk reduction interventions represent a major avenue for responding to both existing flood and drought hazards and the increases likely to emerge as a consequence of climate change. Yet investments in risk reduction are difficult to economically justify unless their returns can be assessed. Cost-benefit techniques are the primary set of economic tools through which such assessments are currently made. The ability to make such assessments depends, however, on the availability of probabilistic information, which is generally not available at the local level in developing countries where populations are large and particularly vulnerable.

The focus of this study is the Rohini Basin, which straddles the border of Nepal and India. Data paucity in this region makes it difficult to employ numerical downscaling techniques to provide forecasts of potential climate change impacts. Therefore, a robust stochastic technique was developed to generate precipitation ensembles that can be utilized to test climate change scenarios at the river basin level. 

Citation: Opitz-Stapleton, S., Gangopadhyay, S., & The Risk to Resilience Study Team. (2008). Downscaling: Potential climate change impacts in the Rohini basin, Nepal and India (Risk to Resilience Working Paper No. 3). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience #4: Evaluating Costs and Benefits of Flood Reduction under Changing Climatic Conditions: Case of the Rohini River Basin, India

Authors: Daniel Kull; Praveen Singh; Shashikant Chopde; Shiraz A. Wajih; The Risk to Resilience Study Team

This paper analyzes embankments and other flood control strategies along the Rohini Basin in Eastern Uttar Pradesh, India. It shows that traditional flood control structures, when all benefits and real costs are taken into account, actually were not economically beneficial. The maintenance of existing embankments into the future, as opposed to removal, however, would be beneficial since the investment in existing infrastructure has already been made. This paper also looks at a package of people-centered, flexible interventions which have lower initial investments and conclude that these interventions have high benefits and are resilient for the future. The analysis took into account existing river conditions, potential future flooding under climate change using downscaling (Risk to Resilience WP3), and also the various uncertainties presented by a lack of data. A key conclusion drawn methodologically, is that a stakeholder approach to cross-check the quantitative cost-benefit analyses, especially under data-poor conditions, is essential to proper disaster risk management planning. This prevents the misuse of cost-benefit analyses and allows it to become an effective disaster management tool.

Citation: Kull, D., Singh, P., Chopde, S., Wajih, S. A., & The Risk to Resilience Study Team. (2008). Evaluating costs and benefits of flood reduction under changing climatic conditions: Case of the Rohini River basin, India (Risk to Resilience Working Paper No. 4). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience # 5: Uttar Pradesh Drought Cost-Benefit Analysis, India

Authors: Reinhard Mechler; Stefan Hochrainer; Daniel Kull; Praveen Singh; Shashikant Chopde; Shiraz Wajih; The Risk to Resilience Study Team

The case study presented here analyzes the costs and benefits of alternative strategies for mitigating the impact of drought on rural livelihoods in Uttar Pradesh, India. The case study explores both insurance mechanisms for spreading drought risk and, as an alternative, the development of groundwater irrigation for eliminating such risk. While the study is based on analysis within a relatively narrow case area, the results have more general implications for the development of effective strategies for responding to drought and the challenges associated with global climate change. Specifically, the study suggests that the benefits of insurance are likely to decline in relation to the costs if climatic variability increases substantially as a consequence of climate change. In addition, the study suggests that approaches to drought mitigation that are based on integrated combinations of strategies rather than a single set of techniques or mechanisms may perform better. Our analysis indicates that irrigation plus insurance has higher return rates than either technique would if practiced on its own.

Citation: Mechler, R., Hochrainer, S., Kull, D., Singh, P., Chopde, S., Wajih, S., & The Risk to Resilience Study Team. (2008). Uttar Pradesh drought cost-benefit analysis, India (Risk to Resilience Working Paper No. 5). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience #6: Costs and Benefits of Flood Mitigation in the Lower Bagmati Basin: Case of Nepal Tarai and the North Bihar

Authors: Ajaya Dixit; Anil Pokhrel; Marcus Moench; The Risk to Resilience Study Team

This paper presents the results of a systematic, qualitative Cost-Benefit Analysis of embankment construction in the lower Bagmati River basin in Nepal and India. Using a unique Shared Learning Dialogue (SLD)-based qualitative cost-benefit analysis that also begins to quantify impacts, the paper provides insights into the trade-offs among strategies that are similar to, but more transparent than, those used in a full cost-benefit analysis. Additionally, it reveals the costs and benefits for different sections of the populations as opposed to just the society as a whole (which is typically the focus of traditional CBA). The focus of the qualitative CBA is to analyze the costs and benefits of both structural flood control measures, and a wide array of local, "people-centered" strategies. It shows that many of the current structural measures costs have exceeded their benefits and as a result, especially under the increasing uncertainty of climate change, more people-centric, flexible solutions will likely be more resilient.

Citation: Dixit, A., Pokhrel, A., Moench, M., & The Risk to Resilience Study Team. (2008). Costs and benefits of flood mitigation in the lower Bagmati basin: Case of Nepal Tarai and North Bihar (Risk to Resilience Working Paper No. 6). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience #7: Evaluating the Costs and Benefits of Disaster Risk Reduction Under Changing Climatic Conditions: A Pakistan Case Study

Authors: Fawad Khan; Daanish Mustafa; Daniel Kull; The Risk to Resileice Study Team

This working paper provides insights from an evaluation of the costs and benefits of disaster risk reduction and adaptation to climate change in South Asia, with the report based on a set of work undertaken in the Nepal Tarai, Eastern Uttar Pradesh, and Rawalpindi, Pakistan. This case study is designed to use both social and natural science tools to answer a set of basic questions on proactive risk reduction. The primary question is to determine whether and/or in what cases is proactive disaster risk reduction cost effective. Second, how can we compare the cost effectiveness of various proposed strategies to assist policy makers in making decisions? Finally, what are the limitations and risks in the use of CBA (cost-benefit analyses) for decision-making? Although political expediency and organizational biases tend to dominate policy level decision-making, it is essential to see how compelling the economic justifications for various strategies are. Such an analysis also helps compare competing demands on most appropriate use of the land by various interest groups, and allows us to lend a lens of economic scale to such comparisons.

Citation: Khan, F., Mustafa, D., Kull, D., & The Risk to Resilience Study Team. (2008). Evaluating the costs and benefits of disaster risk reduction under changing climatic conditions: A Pakistan case study (Risk to Resilience Working Paper No. 7). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience #8: Moving from Concepts to Practice: A Process and Methodology Summary for Identifying Effective Avenues for Risk Management Under Changing Climatic Condition

Authors: Marcus Moench; Sara Ahmed; Daanish Mustafa; Fawad Khan; Reinhard Mechler; Daniel Kull; Ajaya Dixit; Sarah Opitz-Stapleton; The Risk to Resilience Study Team

The role of disasters in building and maintaining the cycle of poverty and undermining development progress is increasingly recognized as a major global challenge. While many recent disasters are related to geophysical events (earthquakes, tsunamis, etc.), approximately 70% are weather related and this proportion is likely to grow as climate change processes increase the variability and intensity of weather events. As a result, cost-effective strategies for reducing disaster risk are central both to meeting development goals and responding to the challenges climate change will present all sectors of society, particularly the poor, women, and other vulnerable groups. The purpose of this summary report is to present practical approaches for identifying, prioritizing, and ultimately demonstrating the costs and benefits of tangible interventions to reduce disaster risks, particularly those likely to emerge as a consequence of climate change. Such practical approaches are essential if governments, humanitarian organizations, the private sector and local communities are going to invest substantial resources in reducing both current disaster risks and those anticipated as a consequence of climate change. We outline key elements and the methodologies associated with them for understanding risk and vulnerability within communities, identifying potential response strategies and evaluating the qualitative costs and benefits associated with them. The approach is based on a shared learning process that moves iteratively from initial scoping through systematic vulnerability analysis, and identification of potential risk reduction options to qualitative and quantitative evaluation of their costs and benefits as a basis for decision-making. 

Citation: Moench, M., Ahmed, S., Mustafa, D., Khan, F., Mechler, R., Kull, D., Dixit, A., Opitz-Stapleton, S., and The Risk to Resilience Study Team. (2008). Moving from concepts to practice: A process and methodology summary for identifying effective avenues for risk management under changing climatic conditions (Risk to Resilience Working Paper No. 8). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.


 

From Risk to Resilience #9: Understanding the Costs and Benefits of Disaster Risk Reduction under Changing Climatic Conditions

Authors: Marcus Moench; The Risk to Reilience Study Team

The benefits of investing in disaster risk management substantially exceed the costs. This is the core finding that emerges from a series of detailed probabilistic analyses of avenues for flood and, to a lesser extent, drought risk reduction in India, Nepal and Pakistan. In most cases investigated, benefit/cost ratios are positive and in some instances may be well above those achieved through other common development investments. This finding holds true for an array of interventions that range across a spectrum from insurance to early warning and from distributed responses at the village level to large-scale infrastructure. Return rates are often higher when the impacts of climate change are considered, particularly for strategies that are resilient under uncertainty. Return rates appear particularly robust for the often lower-cost “people-centered” interventions that reduce risks associated with high frequency but low magnitude events rather than large disasters. Such events are a source of chronic, in some cases annual, losses that can erode the wealth of affected populations. The economic benefits from interventions that require high initial investments and are targeted at less frequent “extreme events” are particularly vulnerable to assumptions regarding the appropriate discount rate to use and to uncertainties regarding the frequency and magnitude of extreme events as climate conditions change. Investing in lower cost forms of risk reduction that are designed to increase the resiliency of livelihoods, housing and other infrastructure at the household and community level may be among the most economically effective avenues for reducing risks and thereby supporting adaptation to climate change. This does not, however, imply that investments should be directed away from the lower frequency-higher magnitude disasters that can set individuals, households and regions back for many years. Instead, it implies the need for a balanced approach that combines sustained attention to the small disasters that receive little public or policy attention as well as the large-scale, high-profile impact of extreme events.

Citation: Moench, M., & The Risk to Resilience Study Team. (2008). Understanding the costs and benefits of disaster risk reduction under changing climatic conditions (Risk to Resilience Working Paper No. 9). M. Moench, E. Caspari, & A. Pokhrel (Eds.). Kathmandu, Nepal: Institute for Social and Environmental Transition-Boulder, Institute for Social and Environmental Transition-Nepal, & Provention Consortium.