Pilot approaches to better assess the costs, benefits,
sustainability, and impact of activities with
presumed resilience benefits.
Costs and impacts of presumed adaptationoriented
activities are not well understood.
Original Response: Partially agreed: World Bank: The Economics of Adaptation studies
highlighted many methodological challenges
and data needs that would have to be addressed
to implement this recommendation on cost-benefit
analysis alone. There will be additional challenges
to measure impacts and sustainability. The work
under this recommendation is dependent on additional
resources and partnerships for developing
methodologies and implementing the pilots. Past
experience suggests that this work will take time
and the implementation of pilots is not likely to
start until FY14 and maybe later.
Action 3A: Develop new and alternative analytical approaches for assessing costs, benefits and sustainability of activities with resilience benefits.
Baseline: Existing economic analysis and other approaches do not reflect and are inadequate for capturing multiple and long-term nature of resilience benefits.
Target: An alternative analytical approach to capture resilience benefits (at national, sub-national, sector/sub-sector) for specific climate hazard or general changes in climate developed, made available as a knowledge product through knowledge platforms and other media and tested in at least five countries as a multi-partner effort.
Timeline: FY15-17
Action 3B: Cost-benefit analysis for adaptation-smart energy planning and investments by energy utilities in response to extreme weather and climate events.
Baseline: Little or no such analysis done.
Target: Analysis completed.
Timeline: End FY16
Action 3C: Compendium of examples of economic analysis at project level that capture the long-term/intergenerational resilience benefits.
Baseline: No readily accessible and complied set of examples.
Target: A knowledge product on economic analysis made available through operational portal and other knowledge platforms.
Timeline: End FY15
The recommendation envisioned a change in institutional practice, to build impact assessments into World Bank projects with presumed resilience benefits, with rigorous ex ante and ex post assessments. As noted in IEG's MAR updates, the evaluation suggested a number of specific areas where additional work was needed to assess costs, benefits, sustainability, and impact. These included poverty impacts, sustainable land and water management, ecosystem-based adaptation, land use planning and zoning, flood control and disaster prevention, and hydrometerology (Box 5-1 in the evaluation).
The Bank has been moving in the right direction in these areas, but knowledge gaps remain about the effectiveness of specific interventions, in part because this analysis is seldom built into project results frameworks or evaluation systems. Flagship studies have focused on valuable but different questions, and by their nature may rely on modeled effects rather than observed data.
- The Shockwaves report is focused on estimating the effects of climate change on poverty rather than on assessing the impacts on poverty of climate change adaptation interventions, but does also synthesize existing literature on the impacts of a range of interventions on poverty and other key variables.
- The Unbreakable report is focused on estimating the effects of natural disasters on well-being, rather than on the effectiveness of disaster risk management interventions (though it does incorporate some literature on financial disaster risk management efforts). For example, the report shows for example how reduced asset losses would improve well-being - but is light on evidence showing how specific interventions would reduce asset losses.
Management updates have described good examples (e.g. in Peru, Mozambique, Tanzania, Uganda, Sri Lanka, the Marshall Islands) where ex ante work is being done to estimate costs and benefits of resilience activities, and where these are being used to inform design choices. Yet future work will be needed to also build in ex post assessments to validate this work. Some of this may realistically take longer than the 5 year period of the MAR cycle.
Some projects mentioned in the management update (Nepal, African hydromet, Ethiopa, Ghana) describe interventions that may have benefits for climate resilience, but not improvements in how those benefits will be assessed (which was the subject of the recommendation).
As to the specific actions identified in the action plan:
Action 3A: The unbreakable report provides an alternative analytical approach for assessing the costs of natural hazards on wellbeing.
Action 3B: Updates note that guidance on building climate uncertainty into the design of hydropower and urban water projects are still being developed - but this sounds again more like a focus on design than on impact assessment
Action 3C: Management updates list examples of consideration of climate factors in project design, some of which may also include economic analysis. Yet there is no central compendium of examples of economic analysis at the project level that capture long term resilience benefits. This would still be useful to carry out, to provide a centralized hub to make it easier for teams in GPs to replicate existing efforts.
The ThinkHazard tool is not such a compendium. The tool is more about thinking about how climate risks might potentially hinder the development goals of climate-vulnerable projects, it contributes less to understanding on what the resilience benefits of adaptation interventions could be or their economic analysis.
During FY17, the WB continued to work on pilot approaches to better assess the costs, benefits, sustainability, and impacts of activities with resilience benefits.
Regarding 3A, in the area of poverty reduction, assets and resilience, the Shockwaves: Managing the Impacts of Climate Change on Poverty flagship report examines the potential impact of climate change and climate policies on poverty reduction. The report also provides guidance on how to create a "win-win" situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building. In addition, based on the methodology developed in the Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters flagship report, which estimates the risks to well-being and socioeconomic resilience from multiple climate hazards, efforts are underway to downscale the model used to the country level (Philippines, LAC) to help prioritize resilience investments. In the area of flood control and other disaster prevention efforts, under the programmatic technical assistance "Enhancing climate and disaster resilience of World Bank Sustainable Development Operations", which started in FY17, a paper was published which calculates the net present value of investments that increase the resilience of the Peruvian road network under many scenarios and identified the conditions which make investments profitable. (events" style="font-size: 9pt "> http://documents.worldbank.org/curated/en/691821490628878185/Improving-…). An improved version of the method described in this paper was also used in the PAD of a feeder road project in Mozambique (P158231). In the Dar es Salaam project, which is still underway, the costs and benefits of several resilience interventions will also be quantified under several scenarios to identify the most robust interventions, not only from an engineering perspective but also from an economic perspective. For the Pacific Resilience Project II under the Pacific Resilience Program (P160096), decision making under uncertainty (DMU) methods were used in the economic analysis to demonstrate the economic robustness of a coastal protection project in the Marshall Islands, where it was shown that the net present value of the project was positive under most scenarios considered, and that only extreme assumptions on costs and the discount rate would make the project unprofitable. In addition, the Roads and Bridges Maintenance Project in Mozambique (P146402) is strengthening client capacity to prioritize road network investments based on long term resilience to floods by developing national technical design standards and specifications for climate resilient roads, improving flood modeling capabilities, and piloting climate resilient road designs, with view to scaling up to rest of road network. In the area of ecosystem-based adaptation, a case study from the series on Promoting Green Urban Development in Africa: Enhancing the relationship between urbanization, environmental assets and ecosystem services provides a preliminary investigation of the potential long term costs and benefits of rehabilitating the Nakivubo wetland in Kampala including water quality and flooding mitigation, and implications for the city's expansion plans. Another case study analyzes the return on investment of ameliorating future flood risk in the Msimbazi River Catchment in Dar Es Salaam, including catchment-to-coast restoration measures. Another case study performs a spatial valuation of the natural and semi-natural open space areas in the eThekwini Municipal Area in Durban including carbon sequestration, flood mitigation and sediment retention, water quality amelioration and natural resource provision. In addition, under the Metro Colombo Urban Development Project in Sri Lanka (P122735), a state-of-the-art Robust Decision Making methodology was piloted to examine the economic value and co-benefits of wetland conservation, such as waste water treatment and recreational activities. This guided the Sri Lanka Land Reclamation and Development Corporation and high level decision makers to look at the urban wetlands as a resource and enhanced climate and disaster resilience. With regard to hydromet systems, the Building Resilience to Climate Related Hazards Project in Nepal (P127508) aims to enhance government capacity to mitigate climate-related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities, as well as developing agricultural management information system services to help farmers mitigate climate-related production risks. This will be achieved by establishing multi-hazard information and early warning systems, upgrading the existing hydrometeorological system and agricultural management information system, and enhancing capacity. Activities funded through the project will help improve decision-making and planning in key climate-vulnerable and water resources dependent sectors particularly agriculture, health, water and disaster management, and contribute to building climate resilience for communities at risk. The Regional Framework Program to Improve Hydrometeorological Services in Sub-Saharan Africa aims to improve hydromet services at the national, sub-regional, and continental levels. At the national level, the program seeks to modernize or build infrastructure such as radar, automated weather stations, and others, as well as strengthen institutions and service delivery. Sub-regional efforts will include standardizing procedures to promote trans-boundary collaboration, while Africa-wide efforts will ensure hydromet services across the continent will be linked to regional and global centers, improving data and promoting partnerships. The Program constitutes a joint effort between the African Development Bank, the World Meteorological Organization (WMO), and the World Bank Group. In the power sector, the flagship report on Energy Markets in Latin America: Emerging Disruptions and the Next Frontier analyzes the progress and challenges of the electricity and gas sectors in Latin America and the Caribbean, and examines how emerging disruptions and game changers could shape their future evolution, including climate change. Finally, in the area of sustainable land and water management, the Ethiopia Sustainable Land Management Project (P133133) aims to reduce land degradation and improve land productivity in selected watersheds in Ethiopia through climate-smart land/watershed management and agriculture (including production technologies and value chains). As another example, the Nigeria Erosion and Watershed Management Project (P124905) will support State-led investments to prevent and reverse land degradation in southeastern States that threaten infrastructure and livelihoods. Over the course of the 8-year project, sites in up to 11 States will phase in as States and their designs become ready. The sustainability of these investments will be reinforced by strengthening the country's capacity to promote and implement climate resilient, low carbon development. The project will provide tools and approaches for the government to become better equipped to respond to climate change and support the demonstration projects on the ground
to test the viability and scaling-up potential of low-carbon development options. In addition, the Ghana Sustainable Land and Water Management (P132100) aims to scale up the area under sustainable land and water management in selected watersheds, including biodiversity management and sustainable forest management. Activities are based on the landscape approach in Upper Ghana's savanna, which is characterized by vulnerability, low climate resilience, and high poverty. These activities will contribute to carbon sequestration and increased resilience of the beneficiary communities to climatic variability.
As for 3B, guidelines are also being developed for hydropower projects and urban water and sanitation projects on how to incorporate climate change uncertainties in the planning process and economic analysis of projects to increase their resilience. Climate-Resilient Power Systems Planning (P159094) is an analytical work to develop an approach for power system planning for WBG clients that incorporates information on climate variability projections and potential climate change impacts into system design decisions. This ASA aimed to enhance the traditional least-cost (generation) planning approaches in power systems to render a plan to be more 'climate resilient' to current and future climate risks. More specifically, the objectives are to: (i) develop a set of models using stochastic linear programming (SLP) and robust decision making (RDM) techniques that incorporate climate variables and (ii) apply the methodology for a country (Bangladesh) that has significant exposure to climate change related risks and has experience using conventional least-cost planning models that can be enhanced as part of this planning work. A virtual decision meeting was held from June 16 to 22, 2017. The final summary report included: (i) context, literature review and methodology and (ii) case studies for Bangladesh using SLP and RDM. The Bangladesh case study focuses on approaches for generation planning of the power system to incorporate proactive measures for building climate resilience of existing and new infrastructure.
Finally, for 3C, economic analyses at the project level have been undertaken to capture long-term resilience benefits. The WBG evaluated the costs and benefits of different options to prepare for and manage future drought for Lima's water utility, which is a part of a broader lending Optimization of Lima Water and Sewerage Systems (P117293). The report is planned to be published by the end of CY2017. Under the Power Sector Reform and Sustainable Hydropower Development Project in Nepal (P150066), a comprehensive climate change screening was done under a separate study entitled Programmatic Approach to Impacts of Climate Change on Hydropower. Under the study, a decision tree helped assess whether the selected design for the hydropower project had any climate sensitivities, whether those sensitivities were relatively significant when compared to other non-climate sensitivities, and address risk management. The study also focused on understanding a mix of non-climatic conditions that would either exacerbate or ameliorate climate risks, and thereby make informed recommendations on adaptation measures. The interest was to understand climate risks fully, but also to understand the relative importance of those risks compared to economic and cost-related risks, political risks and disaster risks associated with natural hazards, such as sediment, landslide, and glacier lake outburst flood risks. Under the Strengthening Water Security and Resilience in Mexico (P162473) Project, a technical report has recently been finalized on incorporating climate resilience and uncertainty in the Valle of Mexico to prioritize investments that build robustness of the Cutzamala System and of subsequent lending projects currently under preparation. In addition, the Improving Climate Data and Information Management Project in Jamaica (P129633) aims to improve the quality and use of climate related data and information for effective planning and action at local and national levels. This includes demonstrating the economic benefits of investment in hydromet by updating the downscaled high resolution climate change scenarios and using said scenarios to prepare the State of the Jamaican Climate 2015 and 2019 reports, preparing national vulnerability assessments in selected priority sectors, and carrying out a community-based risk profiling to assess communities' vulnerability to various climate related hazards and developing early warning messaging for vulnerable groups, among other activities. In the Second Phase of Strengthening Climate Resilience Project in Zambia (P127254), climate risk and assessment studies are being undertaken for the Barotse sub-basin and technical assistance is being provided to provincial and council-level planners to mainstream climate resilience into spatial plans and regional budgets. Finally, the operationalization of ThinkHazard (www.thinkhazard.org), has also enabled the WBG to reach the target in 3C. ThinkHazard allows users to access country-based disaster-related information which encourages project planning, project design, and construction methods to take into account the risks of natural disasters and hazards. It includes a wide range of hazards such as floods, water scarcity, wild fire, and heatwaves. Available resources on ThinkHazard includes links to economic analysis, and in the case of Pakistan's river flood section, links such as the following are available: (i) Fiscal Disaster Risk Assessment Options for Consideration (ii) Analysis and evaluation of Flood risk management practice in selected megacities and (iii) Understanding the Economics of Flood Risk Reduction.
The programmatic technical assistance mentioned is relevant to the Bankâs efforts to provide guidance on how to build resilience measures into World Bank operations, covered under a separate recommendation. However it is not clear how it contributes to providing additional evidence on assessing costs, benefits, sustainability and impact of activities with presumed resilience impacts. The positive steps that have been taken on decision-making under uncertainty are similarly covered under the recommendation and action plan on guidance. However, these activities are about trying to build resilience, not on improving techniques for measuring and demonstrating that resilience is being improved.
The goal of the recommendation is was to encourage the Bank to build up a base of evidence on the cost-effectiveness and benefits of resilience-building activites, such that this evidence could be used to persuade decision-makers of the utility of these activities, even when they came at higher cost. For example, analysis showing that building infrastructure to a higher standards had a positive net present value due to avoided expected costs from disasters would help to justify these investments. The analytic work cited in the management update and other Bank work provide some useful preliminary steps on identifying measures of socioeconomic resilience, but these operates at a higher strategic level. The paper takes disaster exposure and vulnerability as fixed, and shows how interventions that had particular assumed effects (e.g. reduced expected losses of $1m) would affect overall resilience, but it does not seek to demonstrate how particular interventions might reduce these (e.g. what kind of flood works at what cost would lead to reduced expected losses of $1m). It is more of this case study evidence, ideally from Bank-financed projects, that are needed, that would help to demonstrate the efficacy of these interventions.
A Programmatic technical Assistance "Enhancing climate and disaster resilience of World Bank Sustainable Development Operations" to help integrate resilience measures into World Bank operations and advisory services with the aim of increasing resilience in client countries was approved. This Programmatic Approach builds on ongoing initiatives to support and enable sector-adapted and sector-led initiatives while ensuring coherence and mutual learning as each GP experiments with different approaches tailored to sector-specific challenges. This work aims to better assess how projects can effectively enhance resilience.
WB is advancing its work on considering costs, benefits and sustainability under different climate change scenarios to inform project design through Decision-Making Under Uncertainty (DMU) methodologies. At the project level, methodologies to support decision making under uncertainty and increase the resilience of mainly infrastructure projects has continued. Examples include: i) a road project in Mozambique in the Northern provinces, with a focus on rural connectivity ii) the evaluation of vulnerability and identification of robustness measures in the Cutzamala system, which supplies approximately 30% of the water consumed by Mexico City and iii) the design of a robust drought management plan for Lima's water utility. In addition, a new analytical study is being designed to meet the government request will be conducted to increase the resilience of Dar Es Salaam's urban transport system.
At the global level, a model to assess the socioeconomic resilience to natural disasters of an economy, defined as its capacity to mitigate the impact of disaster-related asset losses on welfare was published (http://documents.worldbank.org/curated/en/2016/05/26361020/assessing-so…). In addition a tool to help decision makers identify the most promising policy options to reduce welfare losses due to floods was also developed. The underlying information for this tool and the data have been made available publicly (https://github.com/adrivsh https://github.com/adrivsh/resilience_indicator_public/). The tool is now being tailored to specific countries, including the Philippines, Vietnam, and Bolivia.
As noted in the 2014 update, the evaluation suggested a number of specific areas where additional work is needed to assess costs, benefits, sustainability, and impact. These included poverty impacts, sustainable land and water management, ecosystem-based adaptation, land use planning and zoning, flood control and disaster prevention, and hydrometerology (Box 5-1 in the evaluation).
The Management update describes some examples of estimates on the costs of building infrastructure to higher standards, but not on the benefits or cost-effectiveness of doing so. In many cases (including Samoa and the OECS) the more resilient upgrades are needed regardless of climate change, as key roads to not have sufficient drainage to cope well with current climate variability.
The update could be clearer about the Samoa example. The West Coast road in Samoa is an already existing route but is highly vulnerable and is in need of rehabilitation a PPCR-financed World Bank upgrade project is making significant improvements to the road in a prioritized fashion but does not have sufficient resources to conduct full rehabilitation of the road, and as long as the road remains extremely close to the coast then it will remain vulnerable to natural hazards.
Other activities are ongoing but not yet complete. The specific items in the action plan (knowledge product on analytic approaches to resilience benefits, analysis of adaptation-smart planning for energy utilities, and knowledge product on economic analysis at the project level) are not discussed in the management update.
A range of work, including implementation of operations, analytical work, Decision-Making under Uncertainty, a range of cost estimate for "resilience" or "adaptation" measures are available and approaches for doing so have been piloted.
Early stages of implementation are showing considerable costs of resilience. For example, implementation of ongoing operations in Nepal, Samoa and Zambia show that including climate and disaster considerations into the design of infrastructure (dams, canals, and coastal roads) investments is estimated to take about 12-18 months and cost US$1.5 to 2 million. The costs of building resilient infrastructure (with climate change projections to 2050) varies considerably depending on the activity and the location. A coastal road very close to current sea level has been estimated to cost three times the base price. The socio-economic benefits for this road for trade, access to communities and airport and lower maintenance as well as sustainability means that the government is likely seek funding for the work. In a range of countries in sub-Saharan Africa, an ongoing study on infrastructure and the impacts of climate change shows that upgrading roads to standards that factor in anticipated climate risks are estimated to incur significantly higher costs. Similar costing differentials were noted in the Caribbean PPCR program for the OECS countries.
Methodologies to support Decision Making Under Uncertainty (DMU) are being applied to address some of the issues related to the costs, benefits and sustainability of resilience measures. These methodologies help identify options that are robust under a broad range of plausible future climates. Three main types of activities are underway:
(i) raising awareness on the importance of an explicit management of uncertainty via interactive presentations and serious games and include how to make decisions without predictions that has been tested with many different stakeholders (clients, donors, technical experts and WB TTLs and staff)
(ii) mainstreaming uncertainty management in Bank projects' economic analysis. Work is ongoing with different sectors and TTLs to develop guidelines and technical guidance on how to improve the projects' economic analyses for a more explicit management of risk and uncertainty
(iii) Implementing DMU methodologies to support investment decisions. These methods have been and are being applied in different projects: prioritizing investments to reduce the vulnerability of water supply systems in Peru and Mexico and of the transport sector in Peru, Ecuador, and Colombia hydropower planning in Nepal, under uncertain future conditions and robust urban wetland management in Colombo, Sri Lanka.
The evaluation suggested a number of specific areas where additional work is needed to assess costs, benefits, sustainability, and impact. These included poverty impacts, sustainable land and water management, ecosystem-based adaptation, land use planning and zoning, flood control and disaster prevention, and hydrometerology (Box 5-1). This will be necessary to develop evidence on which to base decisions about the design of future operations. As noted in the evaluation, this need not be formal econometric impact evaluation work, but does need better monitoring and evaluation systems at the project level that assess the degree to which resilience was improved within the time scale of the project. The robust decision making exercises when complete have the potential to be useful examples of how to deal with long-term projects under uncertainty.
Work on this recommendation appears to still be in the early stages, and efforts that are underway are not yet complete.
Methodologies to support Decision Making Under Uncertainty which are amongst the leading approaches are developed and being tested to address some of the issues related to the costs, benefits and sustainability of resilience measures. Decision making under uncertainty methodologies have helped identify options that are robust for likely future climates. Three main types of activities are underway: (i) Raising awareness on the importance of an explicit management of uncertainty via interactive presentations and serious games. With the Red Cross Red Crescent Climate Centre, a game was developed on how to make decisions without predictions that has been tested with many different stakeholders (clients, donors, technical experts and WB TTLs and staff). (ii) Mainstreaming uncertainty management in Bank projects' economic analysis: Work is ongoing with TTLs, OPCS and Operation Advisors to develop guidelines on how to improve economic analyses for a more explicit management of risk and uncertainty. Demonstration materials and papers are being prepared. (iii) Implementing Robust Decision Making in pilot projects. These methods are currently applied in three pilot projects: (1) Ensuring Water Security in Lima-Callao, Peru (2) Robust Urban Wetland Management for a Sustainable Metro Colombo, Sri Lanka (3) Building a dam under uncertain hydrological conditions in Nepal.
Work will continue over the coming years.
Work on Actions 3B and C are at planning stage.
Action 3D: To be developed based on work conducted especially in PPCR-supported loans where economic analysis has been carried out for various investment projects. Such analysis has been shared for example from Zambia with SAR countries and provides the basis for generating such a knowledge product.