Valuing Climate Services: Evidences from the CLARA Project

14:00 Wednesday 29 May

OC169

Room S16

 

Elisa Delpiazzo (Italy) 1,2; Francesco Bosello (Italy) 1,2,3; Shouro Dasgupta (Italy) 1,2; Stefano Bagli (Italy) 4; Davide Broccoli (Italy) 4

1 - Centro euro-Mediterraneo sui Cambiamenti Climatici; 2 - Cà Foscari University of Venice; 3 - University of Milan; 4 - GECOSISTEMA srl

The widespread influences of climate on the major agendas mean that provision of climate services can make communities, critical infrastructure, businesses and ecosystems more resilient to climate impacts. The demand for accessible, tailored and accurate services will continue to grow in the coming years by concerns over climate change, the occurrence of extreme events and the need to respond to new human- induced vulnerabilities.

A coherent understanding of the economic value of climate services could benefit both their generation and their dissemination processes. It is critical that climate service providers have a clear understanding of the economic value associated to their products to modify and tailor them to maximize the final users’ gains from their adoption, ultimately leading to an increased likelihood of adoption and use of these services. This feedback loop, which strengthens the collaboration between developers and users and helps the evolution of the climate services over time, is a key element in the co-generation framework.

We consider a climate service, i.e. IRRICLIME, which informs water management authorities on future trends in water availability, promoting a climate informed decision making at the water authority level on how to develop its irrigation system to cope with climate change over three time-horizons (from 2020 to 2080). The tool delivers a water stress indicator, based on expected precipitation, evaporation, and crop irrigation needs. IRRICLIME is used to assess the economic feasibility of different adaptation strategies ranging from investments to improve the irrigation infrastructure to the adoption of softer measures. This case study located in the Castiglione district (Romagna, Italy) focuses on a set of five cultivated crops and three different climate scenarios.

This user- tailored conceptual framework is based on the idea that the value of the service is equivalent to the value of the information conveyed by the service. Operationally, this methodology compares the outcomes of a decision taken with limited information (e.g. experience-based knowledge) against the outcomes of a decision taken with perfect information (e.g. climate service). The difference in the payoffs is the value of the information, representing the maximum cost a decision maker would be willing to pay to obtain this information in advance reducing the uncertainty of the decision outcome. In this case study, the methodology provides two critical pieces of information: (i) an economic value of the benefits and (ii) the best rational action to undertake in the future based on the climate service projections.