Transcript Risk sensitive investment planning initiative for Asia

Quantifying Disaster Risk
and optimizing investment
Protecting development gains: A path towards
resilience
Sujit Mohanty
UNISDR – Asia Pacific
Escalating losses
Total economic losses (1981 – 2011) in million US$
for selected countries
Source: GAR 2013
Our collective aim…
“Substantial reduction of disaster losses, in lives and in
the social, economic and environmental assets of
communities and countries”
“Expected outcome” of the Hyogo Framework for Action 2005-2015: Building the
Resilience of Nations and Communities to Disasters (Hyogo Framework)
Risk can not be ‘Managed’ or
‘Reduced’ if it can not be ‘Measured’
One starting point of understanding
‘Disaster Risk Reduction’ and the path
towards ‘Resilience’ could be by :-
Measuring ‘Losses’ over time
Optimizing investment in DRR
to safe guard development gains
Only works if backed by a strong
National Coordination Mechanism/ National Platform
Understand risk
Quantify economic losses (in past and in future)
Understand investment (how much, when, where)
Track investment in DRR
Analyze cost and benefit of doing DRR
Optimize investment (no one has unlimited resource)
National Coordination Mechanism/ National Platform
Component 3
Optimizing public investment in
DRM
Q1 How much money should be allocated to DRM? (size of total pie)
Q2 How to decide the most efficient and effective allocation of money
between option A (risk reduction) and B (risk transfer and risk
retention)?
(how to divide the pie)
Q3 How to comprehensively plan and finance risk reduction policies?
For example, how to design risk sensitive investment mechanism?
Q4 How to design risk transfer and risk retention schemes?
Process of evidence-based decision
making
STEP1 : Produce risk profile (annual average loss & probable maximum loss).
STEP2: Choose the return period to cover : political decision
STEP3: Define the expected level of DRR: political decision
STEP4: Measure the impact of policy tools on DRR (avoided economic loss)
STEP5: Check the gap between the expected level of DRR
and current level of DRR
STEP6: Decide how to do with the gap: implement more DRR or transfer risk?
:political decision
Country perspective: Investment decisions
Hazard,
Exposure,
Vulnerability
Can you avoid
the risk?
Yes
Disaster losses
(Probability of
losses or Annual
Average Loss)
(past)
Prospective DRM
(Risk Avoidance)
Yes
No
Future Risk
Can you mitigate
the risk?
No
Prospective DRM
(Risk Mitigation)
Can you transfer
the risk?
Yes
Risk Reduction
Risk Transfer
No
Risk Retaining
Cost and benefit
Risk Finance
Investment Planning
(Cost and Benefit)
optimize public investment in DRM
Risk management tools for Govts.
Optimization of investments/
resources
•
•
To affect private corporations and
households
To assure government business
continuity & public asset protection
Evidence based decision
making
Investment Planning
(Cost and Benefit)
optimize public investment in DRM
Risk management tools for Govts.
Optimization of investments/
resources
•
•
To affect private corporations and
households
To assure government business
continuity & public asset protection
Evidence based decision
making
Risk transfer and risk financing
Information and data
Hazard
Vulnerability
Exposure
Socio economic data/ Social
statistics
Disaster losses
Capacity
Spatial/ GIS data/ Climate data
Current status of
investment
(Past and future)
……
Also needs better governance (National Coordination Mechanism/ National Platform)
In addition to traditional DM agency, MOF and
Planning Authority should be key stakeholders.
Sectoral ministries, especially Ministry which has
responsibility for infrastructure building, are also
important stakeholders
Private sector, especially insurance sector and
construction sector, had better be mobilized for
cooperation
The enabling factor:
National Platform
•
•
•
•
•
•
Nationally owned and led forum of multi
stakeholders
a coordination mechanism for DRR
mainstreaming in development
Serves as advocate for DRR at all levels
Coordination, analysis, and advice on priority
setting
Engaging higher level policy makers
Facilitating dialogue and partnership among
national and international organisations
Country context: Asia Pacific region
(Lao PDR, Cambodia, Myanmar, Maldives, Srilanka, Mongolia)
Proposed actions:
1. DRR landscape mapping ( institutional mechanism, national
coordination mechanism, who is doing what …)
2. National disaster loss accounting (existing)
3. Probabilistic risk assessments to estimate future losses.
4. Study of public investment practice (In collaboration with ADB)
5. Study of current risk information use and availability (in
collaboration with ADB)
6. Cost benefit analysis
7. Optimal investment plan
8. A strong national coordination mechanism to implement overall
DRR in the country through sectoral investment planning( national
platform) [KEY]
Thank You …