Assessing the Value of Seasonal Climate Forecasts for Decision making€¦ · Assessing the Value of Seasonal Climate Forecasts for Decision making Dr. Meaghan Daly, Dr. Marta Bruno

AssessingtheValueofSeasonalClimateForecastsforDecisionmakingDr.MeaghanDaly,Dr.MartaBrunoSoares,Prof.Suraje Dessai

ESRCCentreforClimateChangeEconomics&Policy/SustainabilityResearchInstitute/SchoolofEarthandEnvironment

[email protected]

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