Addressing non-economic losses and damages associated with climate change:
Learning from the recent past extreme climatic events for future planning
A regional policy-science workshop on loss and damage in collaboration with UKM-SEADPRI in October.
The losses and damages associated with climate change, including extreme climatic events and slow onset events, are likely to increase, especially with "non-economic factors and the inter-linkages of phenomena leading to cascading, transnational effects" (UNFCCC, 2012a). Non-economic losses in the context of climate change 1) "occur in three distinct areas: private individuals, society and the environment" , 2) "can be understood as losses of, inter alia, life, health, displacement and human mobility, territory, cultural heritage, indigenous/local knowledge, biodiversity and ecosystem services", and 3) "may be directly linked to adverse climate change impacts (e.g. loss of ecosystems) or occur indirectly (e.g. malnutrition as a consequence of impacts in the agriculture sector)" (UNFCCC, 2013).
Urgent challenges include a lack of comprehensive understanding of the non-economic losses and damages, assessment methodologies, and integration of non-economic losses and damages into the decision-making process for policymakers. "In many developing countries, non-economic losses may well be more significant than economic losses", and "recognizing and managing the risk of noneconomic loss should therefore be a central aspect of climate change policy" (UNFCCC, 2013).
Taking some examples from submissions by Parties to COP 18; LDCs stressed the importance of "further understanding of noneconomic damages and losses", and that "neither assessments of the risk of loss and damage nor decision-making support tools should favour economic over non-economic losses". "Understanding and analysis of issues such as social resilience, livelihoods, food security, and human mobility (migration, displacement, planned relocation) must be included in assessments to give policy makers a comprehensive view of loss and damage" (UNFCCC, 2012b). As a result, COP 18 acknowledged "the further work to advance the understanding of and expertise on loss and damage, including noneconomic losses and damages" in the decision (UNFCCC, 2012c).
In order to take into account non-economic losses on the decision-making process for policymakers, various assessment frameworks have been developed so far, including "environmental impact assessment (EIA), strategic environmental assessment (SEA), environmental risk assessment, cost-benefit analysis (CBA), wealth/capital accounting, vulnerability assessment, disaster loss/damage assessment and climate change impacts, adaptation and vulnerability assessment (CCIAV)" (UNFCCC, 2013). However, these methodologies have not yet been tested for their application to country-specific conditions and hence have not yet been employed in real-world situation for decision-making purposes.
Thus far, the decisions made by various stakeholders engaged in disaster risk reduction and climate change adaptation have largely been based on the quantifiable and economic impacts of climatic events. While this approach has helped to make certain progress in disaster risk reduction and climate change adaptation, the emerging body of evidence, recognising the losses and damages after adaptation and mitigation, suggest the greater need to understand the non-economic losses and damages associated with climate change and to incorporate this understanding into decision-making processes for climate risk reduction (UNFCCC, 2012d). Keeping this in view, the research team intends to study the non-economic losses and damages associated with climate change through case study of recent past climatic extreme events in Bangladesh (floods), India (droughts), Philippines and Japan (typhoon) and Thailand (urban floods).
The research will have three components:
to develop an assessment framework to identify and measure non-economic losses for key vulnerable sectors (e.g., agriculture, water, livelihood and gender);
to identify range of best practices for addressing the non-economic loss and damage; and
to develop policy mainstreaming guidelines addressing non-economic losses and damages targeting key policy makers and practitioners.
This research will help improve our understanding of the non-economic damages associated with the extreme climatic events (rapid and slow onset) and help introduce necessary changes in the risk reduction, transfer and pooling measures including risk insurance, compensation, microfinance etc.
As a result, this research is relevant to multi-trans disciplinary research and assessment of impacts of extreme weather events and slow onset events at regional, sub-regional and local levels (what are the gaps? what is the status quo?) and non-economic losses.
The non-economic damages are the intangible damages such as severe pain, physical and emotional distress and disfigurement, social tension and disruptions, impaired quality of life and loss of services accrued from ecosystems associated with the occurrence of a natural hazard. In general, non-economic damages have often not been taken into consideration in most risk assessments, both climatic and non-climatic in nature and in designing insurance and compensation mechanisms (UNISDR, 2010; Hoffmaister and Stabinsky, 2012) and the non-economic losses have often not been reported in the most post-disaster reports and databases (Swiss Re, 2012).
Part of the problem has been the difficulty in estimating the non-economic damages (Tol and Fankhauser, 1998). As a result, the intangible damages have constituted a form of systemic uncertainty in risk assessments (Green and Penning-Rowsell, 2007) and this has become a bottleneck in decision-making for risk reduction. However, the newly emerging understanding on quantification of non-economic damages and realisation of the need to recognise non-economic losses incentivises us to incorporate non-economic damages into climate risk reduction.
Considering these advances as well as the growing realisation of the need to look at the non-economic loss and damages associated with climate change, the study will address the following research questions:
- a) How do non-economic damages differ between various climatic extremes such as droughts, floods and typhoons?
- b) What are the implications of assessing and integrating non-economic damages in designing and implementing disaster risk reduction and climate change adaptation including livelihoods, insurance, compensation and planning?
Outline of activities
The first and major part of the research constitutes the development of analytical framework for assessing the intangible and non-economic impacts of extreme climate events experienced in South and East Asian countries.
The non-economic and intangible impacts are identified, prioritised and measured in a participatory manner through implementing structured questionnaire surveys using the Likert Scale, focused group discussions and associated quantitative analytical techniques.
An expert consultation in the first year of the project will help in prioritising the pertinent technical, practice and policy issues.
Quantifying non-economic losses and damages has been relatively well developed for floods (Green and Penning-Rowsell, 2007; Lekuthai and Vongvisessomjai, 2001) compared to other natural disasters. To bridge this gap, the study will do a comparative analysis of the “anxiety-productivity and income interrelationship approach” (Lekuthai and Vongvisessomjai, 2001) and damage indices approach (Petrucci, 2012) to evaluate the relevance to other natural disasters.
In the second stage, the study team will qualitatively assess existing disaster risk reduction and climate change adaptation measures, with a focus on financial instruments such as risk insurance and compensation mechanisms, to assess the extent to which non-economic damages are considered in designing these responses.
At this stage, the team will review and prepare guidelines for strengthening the adaptation and disaster risk reduction plans and policies at national and sub-national levels for addressing the non-economic damages.
The results of the research will be shared widely in various networks including the Asia Pacific Adaptation Network, the South Asian Disaster Knowledge Network, and Action Research for Community Adaptation in Bangladesh in which the team is actively engaged.
Research reports, policy briefs, synthesis reports, journal articles, book chapters and proceedings.
The methodology developed for assessing the non-economic damages associated with extreme events and relevant case studies will help research, development and policy community in developing climate change adaptation and disaster risk reduction solutions addressing non-economic losses and damages.
References cited in the text
- Green, C.H. and E.C. Penning-Rowsell (2007).Flooding and quantification of intangibles. Water and Environment Journal, 3: 27-30.
- Hoffmaister, J.P. and D. Stabinsky (2012). Loss and damage: Some key issues and considerations for SIDS expert meeting. Briefing Paper on Loss and Damage: 4. SIDS Expert Meeting, 9-11 October, Bridgetown, Barbados.
- Lekuthai, A. and S. Vongvisessomjai (2001). Intangible flood damage quantification. Water Resources Management, 15: 343-362.
- Petrucci, O. (2012). The impact of natural disasters: Simplified procedures and open problems. In: J. Tiefenbacher (Ed.) Approaches to Managing Disaster-Assessing Hazards, Emergencies and Disaster Impacts. Croatia: InTech Publishing.
- Tol, S.J. and S, Fankhauser (1998). On the representation of impact in integrated assessment models of climate change. Environmental Modeling and Assessment, 3: 63-74.
- UNFCCC (2012a). A literature review on the topics in the context of thematic area 2 of the work programme on loss and damage: a range of approaches to address loss and damage associated with the adverse effects of climate change. Note by the secretariat.
- UNFCCC (2012b). Submission by the Gambia on behalf of the Least Developed Countries Group on Loss and Damage. Views and information from Parties and relevant organizations and other stakeholders, taking into account the outcomes of the implementation of the work programme on loss and damage prior to the submission, on the possible elements to be included in the recommendations on loss and damage in accordance with decision 1/CP.16.
- UNFCCC (2012c). Approaches to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change to enhance adaptive capacity. Draft decision -/CP.18: Revised proposal by the President. Doha: Conference of the Parties, Eighteenth session United Nations Framework Conventions on Climate Change (UNFCCC).
- UNFCCC (2012d). Approaches to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change to enhance adaptive capacity. Draft decision -/CP.18: Revised proposal by the President. Doha: Conference of the Parties, Eighteenth session United Nations Framework Conventions on Climate Change (UNFCCC).
- UNFCCC (2013). Non-economic losses in the context of the work programme on loss and damage. Technical paper.
- UNISDR (2010). Disaster risk reduction tools and methods for climate change adaptation. Inter-Agency Task Force on Climate Change and Disaster Risk Reduction. Geneva, Switzerland: UNISDR.