McDermott, Thomas K.J.2016-05-042016-05-042016-04https://hdl.handle.net/10986/24204Climate change will exacerbate the challenges associated with environmental conditions, especially weather variability and extremes, in developing countries. These challenges play important, if as yet poorly understood roles in the development prospects of affected regions. As such, climate change reinforces the development case for investment in disaster risk management. Uncertainty about how climate change will affect particular locations makes optimal investment planning more difficult. In particular, the inability to derive meaningful probabilities from climate models limits the usefulness of standard project evaluation techniques, such as cost-benefit analysis. Although the deep uncertainty associated with climate change complicates disaster risk management investment decisions, the analysis presented here shows that these considerations are only relevant for a relatively limited set of investment circumstances. The paper offers a simple decision framework that enables policy makers to identify the particular circumstances under which uncertainty about future climate change becomes critical for disaster risk management investment decisions. Accounting for climate uncertainty is likely to shift the optimal balance of disaster risk management strategies toward more flexible, low-regret type interventions, especially those that seek to promote "development first" or "risk-coping" objectives. Such investments are likely to confer additional development dividends, regardless of the climate future that materializes in a given location. Importantly, the analysis here also demonstrates that climate uncertainty does not necessarily motivate a "wait and see" approach. Instead, where opportunities exist to avail of adaptation co-benefits, climate uncertainty provides additional motivation for early investment in disaster risk management initiatives.en-USCC BY 3.0 IGOLOCAL TEMPERATUREVULNERABILITY TO CLIMATE CHANGEIMPACTS OF CLIMATE CHANGECLIMATE CHANGE DAMAGESFINANCIAL SERVICESUNCERTAINTIESECONOMIC GROWTHTEMPERATUREEXTREME TEMPERATURESMONETARY ECONOMICSWIND SPEEDINCOMERAINFALL PATTERNSDRAINAGE SYSTEMSSTORMSMETEOROLOGYWINDEMISSIONSEXTREME SCENARIOSRAINFALL EVENTSINTENSE RAINFALLCLIMATE UNCERTAINTYCLIMATE EVENTSINCENTIVESCLIMATE ENVELOPEMODELSOCEAN BASINSDAMAGESTEMPORAL SCALEUNCERTAIN CLIMATE FUTUREASSESSING CLIMATE CHANGEEXTREME WEATHERCLIMATE CHANGE PROJECTIONSECONOMIC ANALYSISECONOMIC ACTIVITYCLIMATIC CONDITIONSSCENARIOSTEMPORAL SCALESDEVELOPMENT ECONOMICSEFFICIENCY GAINSUNCERTAINTY IN CLIMATE CHANGE PROJECTIONSQUANTITATIVE ANALYSISCOST-BENEFIT ANALYSESIMPLICATIONS OF CLIMATE CHANGEIMPACTS OF CLIMATE VARIABILITYICE AGESRAINFALL INTENSITYMARKETSRAINFALLCLIMATIC DISASTERSECONOMIC IMPACTS OF CLIMATESURFACE TEMPERATURECLIMATE MODELCLIMATE SCENARIOCYCLONESBIOLOGICAL SCIENCESCLIMATE HAZARDSCLIMATE PREDICTIONENVIRONMENTAL ECONOMICSCLIMATE MODELSEXPOSURE TO CLIMATE HAZARDSEXTREME CLIMATE CHANGECLIMATE SENSITIVITYCLIMATE PREDICTIONSFINANCELAND USEINVESTMENT DECISIONSCLIMATE VARIABILITYFLOOD INSURANCECONSUMPTIONCLIMATE CHANGE ECONOMICSECONOMIC IMPACTECONOMIC RESILIENCEECONOMIC COSTSPOLICIESCLIMATE CHANGESCIENCESOCIAL VULNERABILITY TO CLIMATE CHANGEGLOBAL CLIMATEPRECAUTIONARY PRINCIPLECLIMATE-RELATED HAZARDVALUEPOLICY MAKERSCLIMATE CHANGE IMPACTSEXTREME EVENTSGLOBAL MEAN TEMPERATURESCLIMATEAPPLIED METEOROLOGYDEMANDCLIMATE RISKCLIMATE SYSTEMSOCIAL DIMENSIONS OF CLIMATE CHANGECLIMATE VARIABLEMAXIMUM WIND SPEEDCOST BENEFIT ANALYSISCOST-BENEFITCLIMATE RISKSCLIMATE SENSITIVEDEEP UNCERTAINTYMARKETFUTURE CLIMATE CHANGEECONOMIC THEORYENVIRONMENTAL CATASTROPHEPOLICYECONOMIC ANALYSESUNCERTAIN FUTURE CLIMATECLIMATE OUTCOMESINSURANCEINVESTMENT STRATEGIESCLIMATIC CHANGEPROBABILITY DENSITYOCEANSSEA-LEVEL RISEECONOMIC IMPACTSCLIMATE CHANGE SCENARIOSCATASTROPHIC CLIMATE CHANGEWIND SPEEDSCLIMATE CHANGE ADAPTATIONFINANCIAL MARKETSICETROPICAL CYCLONESALLOCATIONCLIMATE EXTREMESTEMPERATURESEXTERNAL SHOCKSCLIMATE PROJECTIONSINVESTMENTSRISK MANAGEMENTCLIMATE POLICYSEA-LEVELCOST-BENEFIT ANALYSISEXTREME WEATHER EVENTSHEALTH OF CLIMATE EXTREMESECOLOGICAL ECONOMICSCLIMATE INFORMATIONCLIMATE HAZARDGLOBAL TEMPERATURESRAINFALL VARIABILITYCLIMATIC VARIABILITYSEASONSESTIMATES OF CLIMATE CHANGEECONOMICS OF CLIMATE CHANGEEXTREME WEATHER EVENTUNCERTAINTY IN CLIMATE PROJECTIONSBENEFITSGLOBAL CLIMATE MODELWorking PaperWorld Bank10.1596/1813-9450-7631