Investing in weather and climate information services leads to improved information. The use of this information by users leads to benefits from avoiding negative or realising positive outcomes (the value of information (VoI)). This paper provides a systematic and applied approach that has developed methodological guidance for the valuation of climate services. The guidance has been commissioned by the UK Climate Resilience project to promote the application of economic benefit analysis for climate services in the UK.
Building on existing literature, the method has developed a series of steps that comprise: construction of a baseline scenario; scoping of potential benefits of the new W&CI service; choice of method(s) for benefit valuation; development of the value chain for the service; assessment of benefits in monetary terms; assessment of costs of the service; comparison of benefits against costs; sensitivity and bias analysis; and to consider how benefits could be enhanced. It encourages a value chain approach, considering foundational activities including science research and observations, forecasting capacity and accuracy, effective communication to users, and the uptake and use of this information by end-users, taking account of efficiency fall-offs at each stage.
The method and guidance extends the typical focus of valuation studies (on short-term weather and seasonal forecasts) to cover four temporal elements.
Observed and historic information;
Forecasts over hours to weeks ahead (early warning, weather forecasts);
Forecasts for months to years ahead (seasonal forecasting, inter-annual variability); and
Projections for future decades (climate change) (adaptation services).
Each of these involves different issues and therefore requires slightly different methodological approaches (and for adaptation services, very different approaches). In order to model the benefits of specific new W&CI services – across these four areas - the approach provides guidance for quantitative methods, including:
Ex ante modelling studies;
Stated preference methods (contingent valuation and choice experiments);
The relative merits of these methods are identified and an initial mapping against the temporal elements is developed. Alongside these technical factors, the guidance also considers the methods in terms of required expertise; time, data availability and resources.
The guidance also recommends on how to improve the uptake of economic analysis as part of climate services proposals and design. It recommends inclusion in programme/project logical frameworks, such that economic benefits can be considered as an outcome or impact metric thereby providing an opportunity to demonstrate value for money.
Finally, the paper presents ongoing case study working that is applying the guidance to three operational climate service projects, covering different temporal aspects.
How to cite:
Watkiss, P. and Hunt, A.: Methods and Case Studies for Valuing Climate Services in the UK Climate Resilience Programme, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-119, https://doi.org/10.5194/ems2021-119, 2021.
The use of scientific information about future weather and climate offers enormous potential for society to better manage the risks associated with climate variability and change. There has been significant investment in weather and climate services (WCS) initiatives over the past years, however empirically based evidence of the socio-economic benefits that can be yield from such services is very limited. Furthermore, understanding and capturing the real benefits of WCS is key to ensure continue investment and funding of WCS as well as to enable adaptive management of such services. In this paper, we conduct a review of the literature of WCS evaluations in South Asia. We systematically document and analyse empirical evidence as reported in the academic and grey literature to highlight: (1) the scale and scope of WCS that have been evaluated in the region; (2) the methodological approaches that have been used to monitor and evaluate the benefits of WCS initiatives on the ground; and (3) the socio-economic benefits of WCS categorised under a triple bottom line approach that takes into consideration economic, social and environmental benefits of the WCS under analysis. The paper explores these findings and highlights key areas that warrant further discussion and research. These include, the disconnect between developing and implementing WCS and effectively capturing and recording the benefits that can be yield from WCS; the current emphasis on assessing and capturing economic benefits whilst social and environmental benefits are largely ignored and/or not accounted for; and the need for robust methodologies that enable adequate and holistic evaluations of the benefits that can be generated within the WCS and across the triple bottom line.
How to cite:
Suckall, N. and Bruno Soares, M.: Taking stock of the socio-economic benefits of weather and climate services in South Asia, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-457, https://doi.org/10.5194/ems2021-457, 2021.
This presentation aims to discuss some issues regarding the role of the economic evaluation of climate services in the context of the Horizon 2020 CLARA project. CLARA provides 14 innovative services based on a co-development approach involving service producers and specific final users. In this context, the first issue is the role of the evaluation in the co-development framework. Our understanding suggests that it cannot be one of the last steps in the process, but a preliminary evaluation should be presented in the co-design of the service. For this reason, we advise the use of the “maximum potential value” as a signal for both developers and users. It derives from a comparison between the values of two alternative knowledge sources (i.e. one other than the climate service and the other as a 100% skill climate service). The “maximum potential value” provides a benchmark against which to compare the final product. It gives insights to the producer how to improve the service, while the final user has a direct and understandable measure of likely benefits from climate service adoption. This directly supports a higher engagement of the final user, whose participation is essential in developing the service as well as in gathering information for the evaluation.
Moreover, the final user’s participation has a strong impact in assessing how the services enter the decision- making process that is sometimes an obscure issue in the internal dynamic of the organizations. Recognizing a benefit stimulate the discussion on how the tool may be used internally. This sometimes leads to changes in the service design to meet better the users’ requirements. Another critical issue is the final user’s ability to translate into actions the signals of the climate services as well as to predict and quantify costs and benefits of actions based on climate services forecasts.
All these issues are discussed presenting examples from the CLARA project, especially from a set of services related to renewable energy production and water management.
How to cite:
Delpiazzo, E. and Bosello, F.: Co-Evaluation of Climate Services. An analysis of the CLARA experience, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-458, https://doi.org/10.5194/ems2021-458, 2021.
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The provision of climate services (and for that matter many similar services informing about the current and expected state of the ambient environment of a user) is sensitive to obstacles to value appropriation both the supplier and the user side. The problem at the upstream side is often related to the appropriate levels of compensation for basic data input. The problem at the downstream side is that the uncertainty of the benefit generation potential for the end-user may prohibit price levels that would be necessary to recover service costs.
As for example illustrated in Larosa and Mysiak (2019) certain combinations of service characteristics and market conditions tend to associate with preferences for certain business models. Yet, the choice for these models is by no means always the outcome of a careful selection process, and even if it is, outcomes may be disappointing. Furthermore, in the background affect policy choices regarding, inter alia, market delineation and innovation policies (Stegmaier and Perrels 2019).
The contribution is a theoretical exercise with stylized information market model demonstrating for a set of varying boundary conditions regarding pricing, data access, market access, public support, and quality control what is the likelihood of viability of a certain service design, and what is the influence of different types of competition (e.g. from abroad).
References:
Larosa, F., Mysiak, J. (2019). Business models for climate services: an analysis. Climate Services, Vol. 17, https://doi.org/10.1016/j.cliser.2019.100111.
Stegmaier, P., Perrels, A., (2019). Policy implications and recommendations on promising business, resourcing, and innovation for climate services, EU-MACS Deliverable 5.2, http://eu-macs.eu/outputs/
How to cite:
Perrels, A.: The influence of appropriate business models on the realizable value of climate services, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-459, https://doi.org/10.5194/ems2021-459, 2021.
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Judith Köberl, Hugues François, Carlo Carmagnola, Pirmin Ebner, Daniel Günther, Florian Hanzer, Franziska Koch, Samuel Morin, Andrea Damm, and Franz Prettenthaler
Within the H2020 project PROSNOW (www.prosnow.org), a demonstrator of a forecasting system that aims at increasing the anticipatory power of ski resorts in the field of snow management has been developed and tested. The PROSNOW® demonstrator, which includes a web-based user interface, represents a meteorological prediction and snow management system with the aim to provide improved anticipation capabilities at various time-scales, spanning from a few days to the seasonal scale of several months. The system holds significant potential to increase the resilience of socio-economic stakeholders and support their real-time adaptation. However, it is expected to take some time until users will gain confidence with the service, completely realize its power and its limitations, and learn to use it in the most effective way to exploit its potential. Although the final actual added value of the PROSNOW® prediction and snowmaking system can thus only be assessed several years after its initial implementation, some ex-ante and preliminary ex-post valuations have already been carried out following the real-time testing of the demonstrator in nine Alpine pilot ski resorts in the winter season 2019/20.
We applied two different approaches to assess the added value of PROSNOW®: (i) a simulation-based approach and (ii) a survey-based approach. The simulation-based approach consisted of the ex-ante valuation of PROSNOW®’s cost saving potential in the field of snowmaking, using meteorological hindcast data and simulations from snowpack models. The approach is based on decision theory and aims at estimating the cost savings achievable by using the PROSNOW® system to support a ski resort’s daily and strategic snowmaking decisions, compared to the information sources and strategies used so far. In the survey-based approach, which included both ex-ante and ex-post elements, pilot ski resorts were asked to (e)valuate the PROSNOW® demonstrator, based on their experiences from the real-time testing in the winter season 2019/20. The survey included questions about the perceived forecasting accuracy, observed positive impacts, the experienced as well as expected usefulness of the PROSNOW® demonstrator for different areas of application within the ski resort, and the ski resort’s willingness to pay (WTP). For the latter, both direct and indirect stated preference methods (e.g. limit conjoint analysis) were applied.
Both, simulations and survey results revealed that increases in the ability to anticipate weather and snow conditions bear significant saving potentials for some ski resorts. Areas of application for which PROSNOW® is considered particularly useful include snowmaking decisions for the upcoming hours and days, the optimization of water and energy use and avoidance of snow overproduction. Even though some pilot ski resorts experienced problems with the demonstrator, the majority indicated to be willing to pay a non-zero price for the service, ranging from 2,500€ to 12,700€ per season.
How to cite:
Köberl, J., François, H., Carmagnola, C., Ebner, P., Günther, D., Hanzer, F., Koch, F., Morin, S., Damm, A., and Prettenthaler, F.: Insights and experiences from assessing the added value of PROSNOW, a prediction system to support snow management in Alpine ski resorts, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-446, https://doi.org/10.5194/ems2021-446, 2021.
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Mehri Khosravi, Marta Bruno Soares, António Graça, Natacha Fontes, and Marta Teixeira
Climate services involve the production, translation and use of climate information to support users’ decisions towards adapting to climate variability and change. However, the value of climate services to end-users is only truly realised when the information provided by such services is used to support and inform users’ decision-making processes (Bruno Soares et al. 2018). Capturing and assessing the value and benefits of climate services constitutes a critical area of research in the field of climate services and can be informed by a range of epistemological and methodological approaches. In this paper, we present the assessment of the socio-economic value and benefits of a climate service developed specifically for the wine sector and implemented under the auspices of the H2020 MED-GOLD project. The assessment was conducted with the end-users during a two-month period where they actively interacted with the climate service and the information it provides. Participatory mixed-methods consisting of a workshop, continuous feedback through survey, and interviews were applied to pursue this assessment. Our paper describes the process and methods through which the climate service was assessed with the end-users. It then highlights key findings from the study such as typologies of value and benefits yielded by the end-users; usability of information provided by the service across operational and strategic decision-making processes; and key factors influencing use of climate information and the realisation of value. In doing so, our paper contributes to current knowledge on what constitutes value to end-users in the wine sector and helps unpack some of the complexity between climate information provision, use and the realisation of its value to end-users. It also contributes to wider ongoing discussions on how to effectively assess the value and benefits of climate services to end-users and how to facilitate the realisation of such value, as well as its assessment, in future climate services initiatives.
How to cite:
Khosravi, M., Bruno Soares, M., Graça, A., Fontes, N., and Teixeira, M.: Assessing the value of climate services for the wine sector, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-463, https://doi.org/10.5194/ems2021-463, 2021.
Ilaria Vigo, Raul Marcos, António Graça, Marta Terrado, Nube González-Reviriego, Isadora Christel, Natacha Fontes, Marta Teixeira, and Albert Soret Miravet
Climate services have travelled a long way, however, the last mile still has to be covered until climate information can be appropriately integrated in the users’ decision making processes. When is the signal offered by a seasonal forecast useful? How and when can forecasts influence users’ choices? How does the use of the forecasts compare with the methods currently in place? The answer can vary across users and even across decisions that the same user may take.
This work analyses these questions through the decision making process of a wine producer aiming at reducing its exposure to spring rain variability. Spring rain drives risks of fungal disease causing crop loss and increased costs related to plant protection and canopy management. A transdisciplinary approach, including experts from various disciplines and the end user, is used to understand how and when a particular wine producer needs to trigger a decision linked to total Spring rainfall in order to reduce the risk entailed for plant protection and canopy management. Based on close collaboration, we construct a payoff function and simulate the decision driven by the choice of different forecasted probability thresholds and the business-as-usual decision, and we finally compare them to the observation. This exercise is repeated over 23 years to try eliciting the optimal threshold.
The results show that the optimal decision to avoid climate risks is not always a feasible solution, demonstrating that climate is only one of the variables taken into account in the complex decision making context of a business. This highlights the importance of interpreting seasonal forecasts appropriately according to each user's context and understanding how this information will be integrated in the decision processes. Finally, it calls attention to the importance of co-creation in climate services and the need for extending the collaboration process up to the delivery phase, the so-called last mile.
How to cite:
Vigo, I., Marcos, R., Graça, A., Terrado, M., González-Reviriego, N., Christel, I., Fontes, N., Teixeira, M., and Soret Miravet, A.: Understanding climate and non-climate decision triggers to minimize Spring rainfall risks in vineyards , EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-489, https://doi.org/10.5194/ems2021-489, 2021.
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Severe winter storms are one of the most damaging natural hazards for European residential buildings. Previous studies mainly focused on the loss ratio (loss value / total insured sum) as a monetary value for damages. In this study the focus is on the claim ratio (number of claims / number of contracts), which is derived from a storm loss dataset provided by the German Insurance Association. Due to its magnitude, the claim ratio might be a more intuitive parameter for the use in impact-based warnings than the loss ratio.
In a first step, loss ratios and claim ratios in German administrative districts are compared to investigate differences and similarities between the two variables. While there is no significant change in the ratio between claim ratio and loss ratio with increasing wind speeds, a tendency for lower loss ratios in urban areas can be confirmed.
In a second step, a generalized linear model for daily claim ratios is developed using daily maximum wind gust (ERA5) and different non-meteorological indicators for vulnerability and exposure as predictor variables. The non-meteorological predictors are derived from the Census 2011. They include information about the district-average construction years, the number of apartments per buildings and others to get a better understanding of these factors concerning the number of buildings affected by windstorms. The modelling procedure is divided into two steps. First, a logistic regression model is used to model the probabilty claim ratios larger than zero. Second, generalized linear models with different link functions are compared regarding their ability to predict claim ratios larger than zero. In a cross-validation setting a criteria for model selection is implemented and the models of both steps are verified. Both steps show an improvement over the climatological forecast and in both cases the addition of data for vulnerability and exposure leads to in decrease of the mean squared error.
How to cite:
Trojand, A., Becker, N., and Rust, H.: Modelling winter storm impacts on insured claim ratios of residential buildings in German administrative districts, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-367, https://doi.org/10.5194/ems2021-367, 2021.
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In recent years the financial sector has activated itself regarding the integration of climate change risks in its risk management. This is a slow process and the realization, that also physical risks engendered by climate change should be included, is even more recent (Hamaker-Taylor et al 2018). Within the segment of asset management, notably the management of real estate assets should have particular interest in climate change, as fossil free and efficient energy use, sustainable climate neutral building materials, and minimized exposure to climate change enhanced physical risks merit all sufficient attention. Overall asset oriented climate services will be an important segment (De Bruin et al 2020) This offers a significant scope for climate services for this segment within the financial sector, but both the financial sector as user and the suppliers of climate services are still very much in an exploratory stage of defining, ordering, providing, and using climate services, which are relevant for specific risk management issues within the financial sector (Keenan 2019).
The key issue for the real estate asset manager is how climate change would affect the value of its properties with and without adaptation measures, both as such, as well as in comparison to other property. Furthermore, the disclosure of hitherto not-disclosed risk information of assets will usually affect the prices of these assets, in comparison to similar not-exposed assets (Votsis and Perrels 2016). In this contribution we illustrate on the basis of Finnish cases under what conditions more information on climate change related risks (flooding; forest damage) could entail an economically viable climate service.
References
De Bruin, K., Hubert, R., Evain, J., Clapp, C., Stackpole Dahl, M., Bolt, J., Sillmann, J. (2020). Chapter 8: Physical Climate Risks and the Financial Sector—Synthesis of Investors’ Climate Information Needs, in Filho and Jacobs (eds), Handbook of Climate Services, Springer https://doi.org/10.1007/978-3-030-36875-3
Hamaker-Taylor, R. Perrels, A. Canevari, L., Nurmi, V., Rautio, T. Rycerz, A. Larosa, F. (2018). Results of Explorations of the Climate Services Market for the Financial Sector, EU-MACS Deliverable 2.1, 23.12.2018. http://eu-macs.eu/outputs/#
Keenan, J.J. (2019). Climate Adaptation Finance and Investment in California, Earthscan – Routledge, London/New York, ISBN: 978-0-429-39875-9 (ebk) / ISBN: 978-0-367-02607-3 (hbk)
Votsis, A., Perrels, A. (2016). Housing prices and the public disclosure of flood risk: a difference-in-differences analysis in Finland, Journal of Real Estate Finance and Economics, November 2016, Volume 53, Issue 4, pp 450–471, DOI 10.1007/s11146-015-9530-3
How to cite:
Perrels, A.: The value-added potential of climate services for real estate asset management, EMS Annual Meeting 2021, online, 6–10 Sep 2021, EMS2021-465, https://doi.org/10.5194/ems2021-465, 2021.
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