Can non-economic losses from climate impacts be quantified?

by Kashmala Shahab Kakakhel | LEAD Pakistan
Tuesday, 23 December 2014 14:48 GMT

A modest house and the good health of their children mean the world to people like Saeeda Bibiin in Prang Majokai, northwest Pakistan. PHOTO/Kashmala Kakakhel

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* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

Asking Pakistani villagers who have suffered losses reveals which matter most and puts a number on their value

We are slowly converging towards a major global deal on climate change, which will hopefully be agreed late next year. A central pillar will be national pledges to reduce emissions. The pact may also include a coordinated effort to help poorer countries adapt to climate change, through mechanisms like the Green Climate Fund.

Less certain is whether it will also include any tangible commitment to address the climate change-induced loss and damage that occurs despite mitigation and adaptation efforts.

I have been a close follower of progress since first attending the annual U.N. climate change conference in Cancun in 2010. On loss and damage in particular, a few questions have fascinated me.

Is tackling loss and damage simply an extension of the adaptation challenge, or is it a separate topic? Should a global solution include a compensation mechanism for the worst-affected countries? And what should the definition include: only the tangible, easily quantifiable “economic losses”; or also the harder-to-measure “non-economic losses”, such as loss of life, health or cultural heritage?

This last question in particular is intriguing, since so much of the global debate on the topic has happened without much effort to quantify the relative size of non-economic losses in particular. This past summer, I conducted my own research on this question, to be published soon by LEAD Pakistan and entitled “Loss and Damage, Quantified!”

My research was based on Prang Majokai, a small village of about 200 households in northwestern Pakistan by the River Jindai. Like thousands of similar villages, it had been devastated by the 2010 country-wide floods.

I asked its residents some simple questions to identify what they stood to lose in the event of a similar flood. Then I tried to find a way to quantify those losses.

The story is best told through 38-year-old Saeeda Bibi, a typical resident. Married off at 14, with eight children, her only source of income is the monthly $120 brought in by her husband’s work on the local landlord’s agricultural land.

Both husband and wife are illiterate, but keen to educate their children if other expenses allow. Like most Prang Majokai residents though, they live a hand-to-mouth existence.

Quantifying the potential economic losses households are exposed to was straightforward and did not amount to much - a small house, a buffalo, a TV set in some households - all worth about $8,000 (including a year’s average income).

Figuring out the potential non-economic losses was more complex. To do so I used the “contingent valuation” method, a survey-based technique to value non-market resources.

This involved two kinds of questions. First, I asked Saeeda and her neighbours in the village about their willingness to pay to avert a potential non-economic loss (what would you pay to restore electricity if disrupted by floods?).

Second, I asked them about their willingness to accept compensation for a loss that has occurred (what payment would you accept to live without electricity until it is restored?).

SOME LOSSES MATTER MUCH MORE

There were two important insights.

First, that quantification of non-economic losses is possible, as resident after resident easily put values to potential losses. The only challenge - and this will continue to get in the way of any mechanism to resolve non-economic losses - is that depending on the method used, the values could vary significantly.

The “willingness to accept method” resulted in a valuation of non-economic losses 11 times higher than the “willingness to pay method” (approximately $ 9,700 versus $885 per household).  

This underlines the human tendency to ascribe a higher value when it comes to accepting ‘reimbursement’ for a loss, as opposed to paying out of one’s own pocket to mitigate the negative effects.

Second, as Saeeda and most Prang Majokai residents pointed out, some non-economic losses mattered a lot more than others. 

From a list of 10 categories, only two meant a lot to Saeeda. She didn’t want to be relocated, and she didn’t want herself or her family to suffer from ill health.

As much as 94 percent of the potential non-economic loss value came from these two categories. Relatively speaking, almost nothing else mattered. Access to education, basic services like electricity or gas, or even places of worship when quantified amounted to only 6 percent - a very small proportion of the value at stake.

Saeeda, whose son was seriously ill while they were relocated due to the 2010 floods, explained: “No amount of physical comfort provided by the government could help. I just wanted my son to be healthy again.”

Quantifying non-economic losses, even if carried out as simply as I did, brings an interesting insight for policy makers. We may not need to debate at length the importance of different non-economic losses because we can let those at risk tell us.

Extensive but quick research should at the very least allow policy makers to focus efforts on the losses that matter most. For an issue as emotive and polarising as loss and damage, doing so would mean people like Saeeda stand a better chance in the future.

Follow Kashmala on Twitter: @Kashmala_14