6 research outputs found

    Science-based insurance

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    Climate change with its potential to alter seasons, rainfall variability and temperature regimes1 poses a growing threat to the development agenda. Small-scale farmers in developing countries, who have few modern technologies or improved crop varieties at their disposal, are among those most vulnerable to changing patterns of rainfall and temperature. In developed countries, crop insurance is a commonly employed mechanism by which farmers and ranchers can guard against the reduction or destruction of yields by extreme weather events. However, traditional crop insurance is largely absent in less-developed countries, because costs of implementation are high and there are not enough effective financial institutions to broker insurances. Furthermore, insurance policies perversely provide an incentive for farmers to neglect their fields, a problem that is usually countered with expensive site visits by insurance claim adjusters2, which would not be financially feasible in the developing world. So-called index insurances, where an insurance indemnity payout depends on the exceedance of a threshold variable such as water level (for floods) or consecutive days without rain (for droughts), could fill that gap. Many insurance companies and non-profit development organizations are working to develop index insurance for small farmers. In principle, index insurance can serve several purposes. Apart from reducing the risk for small farmers, it can facilitate the availability of credit: banks are more likely to lend to a farmer who is insured against loss of harvest. However, designing and pricing effective index insurance programs has proved to be extremely difficult, even in places where adequate crop and weather data are available. In the developing world, weather stations are few, records are discontinuous and historical weather data difficult to access3. To make the concept viable in these more challenging circumstances, a high degree of participation and engagement from the geoscience community is key, in particular to provide access to satellite remote sensing and high-resolution climate simulations

    Capacity building in analytical tools for estimating and comparing costs and benefits of adaptation projects

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    The broad objective of AIACC project 47 was to develop the capacity to estimate and compare the benefits and costs of projects in natural resource sectors that reduce the expected damages from climate change in Southern and West Africa. There are two parts to this project. The first consists of using well-established principles from economic benefit-cost analysis to develop a framework to estimate the economic benefits and costs associated with the expected climate change damages avoided by a development project that does not take climate change into account. Then, these benefits and costs can be compared to the case where planners incorporate expected climate change into the project assessment. The second part consists of demonstrating this methodology in two project case studies, one in The Gambia and the other in South Africa. The South African case study examines the benefits and costs of avoiding climate change damages through structural and institutional options for increasing water supply in the Berg River Basin in the Western Cape Province. The Gambian study, on the other hand, focuses on the agricultural sector, particularly on millet, the predominant crop in the country. To facilitate analysis, the Gambian study uses a detailed water–crop model, defines and explores adaptation strategies with the model and uses the results to carry out an economic analysis. The South African project develops and applies a Berg River Dynamic Spatial Equilibrium Model as a water planning and policy evaluation tool to compare benefits and costs and economic impacts of alternatives for coping with longterm water shortages due to climatic change. Results from the study will contribute to the development of international climate change policies and programs, particularly in regard to adaptation activities in developing countries under the United Nations Framework Convention on Climate Change (UNFCCC)
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