"What we have set out to do is to really try to make the business case for resilience investment"
By Megan Rowling
BARCELONA, Aug 2 (Thomson Reuters Foundation) - From protecting coastal towns against storms and rising seas, to helping poor farmers grow new crops, projects that equip people to overcome disasters and other threats can have wide-ranging benefits - but an inability to quantify those in dollar terms has held back much-needed investment, resilience experts say.
Economists at the RAND Corporation, a global think tank, have spent the past year working out how to demonstrate the social, environmental and economic impact of building resilience.
The result, published on Wednesday, is the Resilience Dividend Valuation Model, a first step towards measuring the outcomes of programmes that assist people and places to survive, adapt and grow in the face of globalisation, urbanisation, climate change and other modern-day challenges.
"What we have set out to do is to really try to make the business case for resilience investment," said Sundaa Bridgett-Jones, senior associate director at The Rockefeller Foundation, which published the model with RAND Corporation.
The foundation, which has invested more than half a billion dollars in resilience initiatives over the past decade, said it had received an overwhelming number of requests for a method to quantify the benefits of this work.
"We saw a lot of interest in resilience, but we didn't see a lot of the money moving towards ... investments in that area," said Bridgett-Jones.
The foundation decided to produce metrics that could "move the market towards more resilient investments", she added.
The resulting framework crafted by RAND also provides a toolkit that communities, aid workers, officials, investors and others can use to plan and put into practice ways to boost resilience.
GREEN OR GREY INFRASTRUCTURE?
The model aims to quantify how much a resilience project would lower future costs from shocks such as natural disasters and longer-term stressors like migration, as well as the advantages it might bring even without those obstacles.
Craig Bond, a senior economist with RAND Corporation, cited the example of grey infrastructure, such as concrete levees to avert floods, versus green infrastructure, which could be a restored wetland or public gardens that soak up excess rainfall.
Both of these would provide some protection in storms, but the level might differ and the green project may have extra benefits, doubling up as space for leisure activities and reducing pollution.
NO 'BLACK BOX'
Wednesday's report applies the model to six case studies planned, underway or completed in Asia and the United States.
These vary from work by development charity Oxfam to cushion Nepalese villagers against floods and Pakistani farmers against volatile food prices, to typhoon-resilient housing in Vietnam and a proposed bond to cover the cost of restoring U.S. forests.
But the RAND economists were able to produce only a partial calculation of the resilience dividend for half the cases. With the rest, gaps in the available data ruled out any estimate.
Besides the difficulties of using the model for projects not designed with its information needs in mind, RAND said measuring resilience benefits requires a holistic view to cover what economists call "social capital".
That includes things like good governance and community trust, which conventional economics is less adept at quantifying.
"It's going to be really hard to come up with a black-box type model that spits out a monetary value because of that complexity," report co-author Bond told the Thomson Reuters Foundation.
The model was able to estimate that in Pakistan, for instance, Oxfam's support for farmers in three southern districts in 2010-2011 increased agricultural income by about 20 percent, or roughly $400 per year, for participating households that were not hit by flooding compared to a control group that received no help and also escaped the water.
But there was little evidence the intervention cut disaster risk for those that were affected by floods, the report said - a finding at odds with Oxfam's own research.
With Oxfam's disaster prevention project in Nepal, the report noted 78 percent of households that took part had confidence in their local leaders and institutions compared to 3 percent of those that did not, but said the resilience dividend associated with increased social trust could not be valued.
Claire Hutchings, head of programme quality for Oxfam Great Britain, said RAND's model may struggle to quantify the whole of a resilience project's benefits to a community, particularly gradual shifts such as empowering women, which can take two or three decades.
But the new report and practical guide accompanying it will spark conversations around the diverse aspects of resilience work, and motivate agencies to think harder about the information they need to collect to demonstrate its positive impacts, she said.
"It's trying to get at those root causes a bit more - and data really does help us with that," she said.
The model could also serve as a basis to persuade government donors and investors to back resilience projects, she added.
"It will give a common economic model you can engage around," she said.
(Reporting by Megan Rowling @meganrowling; editing by Alex Whiting. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women's rights, trafficking and property rights. Visit http://news.trust.org/climate)
The Thomson Reuters Foundation is reporting on resilience as part of its work on zilient.org, an online platform building a global network of people interested in resilience, in partnership with the Rockefeller Foundation.
Our Standards: The Thomson Reuters Trust Principles.