High-level inter-ministerial workshop held in Hanoi June 6-7, 2017 hosted by the Ministry of Agricultural Development (MARD) of Viet Nam and supported under the Integrating Agriculture in National Adaptation Plans (NAP-Ag) Programme. The meeting was attended by over 75 national and provincial level government officials, including MONRE, MARD, MPI and the Ministry of Finance (MOF), UN and development partners, private sector representatives including insurance companies, as well as non-governmental organisations.

1. Comprehensive Risk Management:
Tools and Entry Points for Integrating the
Valuation of Climate and Disaster Risk into Planning
Glenn S. Hodes
Climate Policy & Finance Specialist
UNDP Bangkok Regional Hub
NAP-AG WORKSHOP ON VALUING CLIMATE
IMPACTS IN VIET NAM
Hanoi, Viet Nam ■ 6 June 2017

2. Guiding questions
• What approaches and tools are used for integrated
climate and disaster risk management?
• How can NAP process support more comprehensive risk
management at different scales and levels?
• How can the way climate and disaster risk information is
collected, maintained and used be improved?
• How can appraisals of public investment incorporate new
evidence of CC risk, costs & benefits?

3. Rough Estimated Ranges of the Effect on Economic Growth of CC
Uses 2050 scenarios and
models “instantaneous change”
Looks at triangulating various
sources of evidence by sector:
- Government statistics
- Research studies
- Consultation with Farmers,
Extension Officers
- Crop Response Models
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Source of Loss and Damage
Reduced GDP growth
2050
Reduced agricultural yields from average temperature and rainfall 0.50 – 1.00%
L&D to crops from flood, drought and variable rainfall 0.30 – 0.80%
Crop losses from pest and disease, sensitive to erratic climate 0.05 – 0.10%
Reduced livestock productivity, mainly from temperature 0.10 – 0.30%
Reduced forestry and fisheries productivity 0.05 – 0.10%
Higher losses in the energy sector 0.01 – 0.02%
Urban flood damage and higher reconstruction costs in infrastructure 0.05 – 1.00%
Sea level rise and impact of salinity on crops and water supply 0.00 – 0.30%
Health impacts 0.50 – 1.00%
Total impact 1.60 – 4.60%
Source: Kit Nicholson, “Climate Scrutiny,” April 2017

4. Typical CC effects on agriculture
• Storm surges
• Flood and drought impacts
• Ecosystem degradation as factor in lower productivity of crop &
fisheries (i.e. soil organic matter, water, biodiversity/food chains)
• Productivity losses from more erratic rainfall or temperatures
• Different seasonality patterns of rains
• Growth, fertility and disease burden of livestock
• Lost output from pest outbreaks and plant diseases
• Flora and fauna biodiversity loss and effect on forestry

5. Why CRM?
• Similar functions, process, and methods between
managing climate variability and extremes, and managing
disasters and sustainable recovery efforts
• Strong basis for a NAP as provides evidence-base
• Integrated feasibility and impact metrics ensures that
budgets and resource mobilization efforts most efficient.
• A goal of integrated risk is to reduce losses and harm to
the most vulnerable
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6. Policies for
DRR/DRM
Integrated DRR and CCA approaches to decision-making
Ranking
(Economic Valuation/
Investment Appraisal
Political)
CC Scenario
Information
Mid-. Long Term Planning
And Budgeting
CC Scenario
Probability of Risks
Economic Estimate
of Expected
Future Losses
+ Damages
Identification of
Adaptation
Options
Policies for
CCA
“NAP”
Managing Climate
Variability
& Extremes
Historical information
based
Risk Assessment
Value of Losses +
Damages
(Historical)
Preparedness &
Sustainable Recovery
Identification of
Risk Reduction
Options
Concrete
Actions
for
DRR/DRM
Concrete
Actions
for CCA
(Short Term)
Investment Framework
(Long Term)
Planning
Coordination
Budgets
DRR
CCA

7. Sector Plans Reflect
CCA & Policy
Targets/Guidance
Local Vulnerability
Assessments,
Adaptation Plans &
Budgets
Adaptation
projects costed
& prioritized
National
Adaptation
Plan
Implementing
adaptation
practices
Monitoring
CCA & DRR
interventions
Target resources
to priority effective
measures
UNDP Model for National Planning &
Budgeting Process & NAP entry points National
Development
Plans &
Budget/MTEF
Sector Plans
& Guidance
Sub-National
Plans & Budget
Allocations
Project
Formulation
Guidance &
Practice
Program/Project
Implementation
Monitoring,
Reporting &
Evaluation
Sector Performance
Review & Impact
Evaluation

8. Relevant “NAP-Ag” Components & Plans
• THAILAND
– Upgrading sector CC policy & Action Plan, links to operational planning & budgeting
– Integrating CC risk and appraisal methods in internal project appraisal guidelines and
developing more bankable proposals based on MCA & CC risk integrated CBA guideline.
• VIETNAM
– National workshop on NAPs involving MARD, MPI and MONRE, provincial reps
– Work with selected Mekong Delta provinces on CPEIRs and prioritized investment
programmes in water supply linked to target programe and budget incentive scheme
– Pilot provincial level CCA & DRR public expenditure reviews
• NEPAL
– Appraisal of key watershed-based CCA measures in sector, w/GCF Readiness Programme
– Enhancing project preparation guidelines and CC budget coding, expenditure tracking
capacities in MoAD, MoLD
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9. Pakistan
• Actions/Studies in Punjab government Dept of Agriculture
to enhance priority actions under CC strategy
– Setting up a risk management system (surveillance and early
warning system) as well as new integrated databases for
climate variables and disasters
– Using drought and flood impact data to argue for improved
irrigation and land management techniques in budget
– Vulnerability Assessment and Surveys to Incorporate CC into
new “Farm Mechanization Programme”
9Source: Action on Climate Today

10. Sri Lanka
• UNDP supported policy assessment undertaken by national TT
• Builds on NAP (2016 to 2025) & NAP institutional coordination
mechanisms/WGs
– Integrates CCA and DRM assessments, Vulnerability profiles
– Risks, physical effects, and physical hazards/vulnerabilities catalogued
• Looked more deeply at food security and export crops
• Scenario-based approach to estimation of effects
• Suggested creation of new indices
• Proposed CC adaptation cell for agriculture & data sharing mex
– Facilitate sector planning w/ relevant ministries and departments, private sector, and community
organizations
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11. Main conclusion
• Sri Lanka needs to develop an integrated loss and damage
assessment mechanism using both scenario-based and index-
based approaches to capture loss and damages in agriculture due
to climate related disasters, anomalies, extreme events, and slow-
onset disasters.
• The existing methodological approaches developed by iagencies
such as UNFCCC and FAO provide a basis to initiate such a
mechanism with suitable modification
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12. UNDP’s experience in the Philippines – Weather Index-Based
Insurance (WIBI) Project in Mindanao
Duration: 2015-2017
Funding: Special Climate Change Fund
Beneficiaries: 2,500
Amount of cover: Php 20,000($400)/ha
Premiums:
•Php 1,390 ($28)/ha for low and excess rainfall
•Php 694 ($14)/ha for excess rainfall
(In the project, it was fully subsidized as a pilot test)
Payouts (as of Dec 2016): 144 farmers | Php 1,180,849 ($23,000)
Why index-based insurance?
Conventional Index-based
Payouts Slow: Damage-based
payout
Fast: No field verification
required
Transaction High Low
Risks with
product
Moral hazard / adverse
selection
No MH or AS
Risks covered Multi-peril Single peril
Key barriers to sustainable insurance delivery
❶ Limited sales outlets
• Crop insurance is primarily underwritten by the Philippines
Crop Insurance Corporation (100% Govt subsidiary) and sold
at local PCIC outlets or local government offices
• The “last mile” problem is likely to emerge as the Govt expands
the insurance program across the country
❷ High damage rates for rice and corn
• Due to inadequate level of extension and widespread rain-fed
agriculture, rice and corn farming is a high risk activity 
Market-based premium would be unaffordable for most farmers
❸ General accuracy of the product
• There are still high “false positive” or “false negative” (i.e. no
payouts despite damages in the field or payouts despite no
damages in the field)
Solutions explored in the project
❶ Improving the prospect for PPP
• Administrative order to expand the application of the
existing national loan guarantee to those offering WIBI
product  Additional incentive for banks to package
insurance into the financial product mix
• Impact assessment ongoing to verify whether insurance
make a farmer a better bank client
❷ New indices for banana, sugarcane, coconut and cacao
• Potentially enables the Govt to diversify risks and cross-
subsidize
❸ General accuracy of the product
• Has developed a new indexing methodology that improves
the accuracy of the correlation by >50%

13. Tools
• Spreadsheet-based DSTs and Simplified MCA databases
• Economic models (e.g. full or partial CGE) and damage
functions affecting productivity [capital, labor, and assets]
• Crop response models
• Hydrological models
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14. Some Entry Points
1. Develop M&E indices for impacts & effectiveness of CCA/DRR interventions
2. Identify Relevant Existing Expenditure: CPEIRs, DRM-PEIRs, CprPEIRs
3. Conduct Prioritization Exercises using MCA, Participatory Approaches
4. For priority projects & programmes, conduct integrated economic appraisal
5. Develop low-cost spatial planning maps incorporating CC risk, hazards, key
infrastructure, social and demographic data
6. Use budget tracking and government PFM systems to target allocations to
where risk is highest
7. Develop centralized planning guidelines for CC & DRR
8. Include dedicated risk screening criteria in planning templates
9. Integrated risk criteria as basis for mobilization of external climate finance
10.Pinpoint areas for regulatory/fiscal incentivizes & PPPs to mitigate risk
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15. Resources
• 18 different methods identified in background paper for
UNFCCC expert meeting
– Current Knowledge on Relevant Methodologies and Data Requirements as well as Lessons Learned and Gaps Identified at Different Levels, in Assessing the Risk
of Loss and Damage Associated with the Adverse Effects of Climate Change (Surminski, Lopez, Birkmann, & Welle, 2012)
• Agricultural sector models
– FAO’s Modelling System for Agricultural Impacts of Climate Change (MOSAICC)
– Decision Support System for Agrotechnology Transfer (DSSAT)
– International Benchmark Sites Network for Agrotechnology Transfer (IBSNAT)
– The IFPRI IMPACT model
• NDC Implementation Handbook and UNDP Guidebook to
Developing Climate Change Financing Frameworks (forthcoming June 2017)
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