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AssessingtheValueofSeasonalClimateForecastsforDecisionmakingDr.MeaghanDaly,Dr.MartaBrunoSoares,Prof.Suraje Dessai
ESRCCentreforClimateChangeEconomics&Policy/SustainabilityResearchInstitute/SchoolofEarthandEnvironment
ICCS-528February– CapeTown,SouthAfrica
Centre for Climate Change Economics and Policy
WhymeasurevalueorbenefitsofSCFs?
• Growingtopicofresearch–developed&developingcontexts• Difficultyofdemonstrating/tracingbenefitsofpublicservices• Justificationofpublicinvestment• Betterunderstandingofimprovementsindecision-makingorinformedpolicydevelopment
Whatismeantby‘value’?
Differentmeaningsacrossdisciplines• somethingthatismonetaryworthorfairreturninservicesorgoods• somethinguseful,estimable,orimportant
SCFsdonothaveintrinsicvalueperse– onlyacquiredthrough“abilitytoinfluencethedecisionsmadebyusersoftheforecasts[and]toguidetheirchoicesamongalternativecoursesofaction.”
(Murphy,1993,p.285)
FactorsInfluencingValueofSCFforDecision-making
Threekeypoints:
1. Tendencytoequateimprovementsintechnicalqualitywithvalue2. ValueofSCFsderivedonlyinrelation toexistinginformation3. Theremustbearangeofsupportingfactorsinplacetoenableuse
FactorsInfluencingValueofSCFforDecision-makingFourtypesoffactorsthatdeterminevalue:
1) Characteristicsofthedecision-maker:
• valuevariesfromusertousereveninsamedecisioncontext• individualinterpretation/cognitivebiases• accesstoalternativeinformation• dependentuponsocialpositionandidentity• levelsofrisktolerance
FactorsInfluencingValueofSCFforDecision-makingFourtypesoffactorsthatdeterminevalue:
2) Characteristicsoftheforecastitself:
• timeliness,spatialandtemporalresolution• leadtime• typeofclimateparameterspredicted• uncertaintyandtreatmentofuncertainty• probabilisticvs.deterministic• forecastskill(seasonally/geographicallyvariable)
FactorsInfluencingValueofSCFforDecision-makingFourtypesoffactorsthatdeterminevalue:
3) Micro&Macrodecision-makingcontexts:
• Macro:political,cultural,socialfactors,othertrends(tradeliberalisation,productionsubsidies)• Micro:routines/practices,livelihoodconstraints,powerdifferentialsamongactors,landholdingsandscaleofoperations
Microandmacrocontextsarealwaysinteractinganddecisioncontextisa’movingtarget’(e.g.,markets,demography,technology)
FactorsInfluencingValueofSCFforDecision-making
Fourtypesoffactorsthatdeterminevalue:
4) Science-societyinterface&’downstream’factors:
• levelsoftrust/publicexpectationsaboutscientificcredibility• disseminationandcommunication• provisionofsupplementaryinformation• dedicatedinstitutionalarrangements• co-production
MethodsforassessingthevalueofSCFsMethod Description
Decision-basedtheorymodels
describeshowagentsmakedecisions(i.e.descriptivedecisiontheory)and/orhowagentsshouldmakedecisionstomaximise aspecificobjective
Generalequilibriummodels
potentialvalueinspecificsectors,choicesofdisparatedecision-makersarelinked/affecttheother – highlevelsofcomplexity/abstraction
Contingentvaluation estimatesmonetarybenefitsofpublic/non-marketgoodsandservices – elicitthemaximumamount(inmonetaryvalue)that individualswouldbewillingtopay
Benefittransfer transferoftheestimatedeconomicvaluesfromonestudysitetoadifferentcontext– intrinsicmethodologicalchallengesrelatedtoissuesoftransferability
Qualitative &participatory
variousmethods,emphasisoninvolvingthedecision-maker,interestincontextwithinwhichtheuserisembedded&wheretheSCFisexpectedtobeused
CurrentApproachestoValuation
• Exanteandexpoststudies– expectedvs.observedbenefits• Moststudiesareexante,measuringeconomicbenefit• Assumptionsofperfectknowledgeanddecisionoptimisation
Thereisageneral “…lackofdistinctionbetweenactualandpotentialvalueofclimateforecasts.”(Stern&Easterling,1999,p.5).
CurrentLimitationsofMethods/MetricsforValuationofSCFs
• Focusonnarrowsetsofdecisions• VariedInvolvementofdecision-makers• Diffusechainsofcausality&complexity• Exclusionofpotentialnon-economicbenefits/losses• Spatio-temporalscale– lackofattentiontodistributionofbenefits• Limitedinvolvementofthedecision-makerinthevaluationprocess• DifficultyinexaminingthevalueofSCFasarelativeanddifferentialconcept(e.g.valueacrossdifferentgroupsandacrossscales)
Co-production&ValueofSCFs
• Needforforecaststhatareresponsivetoneedsofdecision-makers• Manystudieshighlighttheimportanceofiterativeinteraction betweenproducers&usersasadeterminantofrealizingvalueofSCFs
HOWEVER…• Lackofevidenceregardingwhetherandhowtheseprocessestranslatetoenhancedbenefittosociety• Costsofco-production(time,resources)alsoneedtobeconsideredwithinvaluationstudies• Needstobeownershipofboththeproblemandprocessofco-production• Equityissuesaroundco-production– thosewhoarealready’betteroff’aremoreabletotakeadvantageofco-productionprocesses
Conclusion
• NosingleapproachtoevaluatingSCFcanfullyassessvalue• MoststudiesofSCFhavefocusedonasinglemethod• Needformixedapproaches– qualitative&quantitative,multiplescales,economic&non-economicvalue
Needforashifttowardco-evaluation• tobetterreflectsocietalvalue,capturemultipleperspectivesofvalue• Providesincreasedopportunitiesforintegrationandsociallearning
Thankyouforlistening.Questions?Comments?
Bruno-Soares,M.,Daly,M.,Dessai,S.(Submitted)Assessingthevalueofseasonalclimateforecastsindecision-making.WIREsClimateChange
Workingpaperavailablesoonat:http://www.see.leeds.ac.uk/research/sri/working-papers/
MeaghanDaly:[email protected]:[email protected] Dessai:[email protected]
Qualitativevs.QuantitativeBenefits
Table 1 – Examples of potential qualitative and quantitative benefits of using climatic information to inform decision-making (adapted from Nicholls, 1996).
QualitativebenefitsQuantitativebenefits
Notconvertedtoeconomicvalues
Convertedtoeconomic values
Supportingplanningactions(e.g.selectionofcroptype)
Improvements(orlossreduction)inyields(e.g.tonnage)
Improvedearningsorreducedlossesinmonetaryvalue
StudiesExaminingEconomicValueofSCFsTable 2 – Examples of studies looking at seasonal climate forecasts value according to economicsector and main scope of the study (drawing from Clements et al., 2013; Hill & Mjelde, 2002).
SectorsMainScopeofStudy
Individual/Organisational
Sectoral Regional/National
Agriculture 11 6 10
Energy 4 2 3
Water - 2 3
Transport 3 2 3
Insurance - - 1
Fisheries - 3 1
Other/Multi 3 1 4
