Many countries, including Thailand, are facing increased risks from climate change-related disasters, including floods, storms, and droughts, which pose a significant threat to the population, agriculture, infrastructure, and economy, hampering socio-economic development. To address these risks, investing in risk reduction measures and arranging climate and disaster risk financing (CDRFI) before a disaster happens is essential. However, as a first step these risks and expected impacts must be adequately estimated – which remains challenging, particularly when it comes to analysing the impact on non-economic assets as well as at a macroeconomic scale.
Therefore, the project “Enhancing Risk Assessments (ERA) for Improved Country Risk Financing Strategies” was commissioned by the Deutsche Gesellschaft für International Zusammenarbeit (GIZ) GmbH. The project is implemented in Egypt and Thailand by GIZ’s Risk Finance & Insurance team together with United Nations University – Institute for Environment and Human Security (UNU-EHS) / Munich Climate Insurance Initiative (MCII) for a period of two years from January 2023 – December 2024.
The ERA project aims to implement the “Economics of Climate Adaptation (ECA)” framework and enhance the underlying open-source risk assessment tool CLIMADA in order to enable Egypt and Thailand to better understand their climate and disaster risks, strengthen their adaptation and risk financing strategies, and ultimately better manage and protect against losses and damages.
This includes integrating the General Equilibrium Model developed within GIZ’s project “Climate-Resilient Economic Development (CRED)” into CLIMADA, allowing the impact analysis of climate hazards on macroeconomic indicators such as GDP or employment in specific sectors and hence, enabling risk-informed planning. Further innovating, the ERA project will estimate non-economic impacts of climate hazards such as the impact on access to education. The project also seeks to simplify the use of CLIMADA for government officials through a simple graphical user interface, allowing them not only to run the risk assessment on their own but also to estimate the benefits of different adaptation measures and improve risk management.
In Thailand, the Department of Agriculture (DOA), together with GIZ’s “Agri-Climate Risk Financing” project, hosted the very fruitful kick-off workshop for the ERA project on May 15-16, 2023 in Bangkok. After the introduction of the ERA project and the ECA framework, participants of the workshop jointly agreed on the scope of the risk assessment. The 60 representatives of the Government, private sector, civil society, academia, NGOs and international organizations decided that the ERA project shall estimate the impact of floods and droughts in Thailand on economic assets such as seasonal and perennial crops, farmers, and markets, but also on non-economic assets like mobility, water bodies, education, and access to cultural/religious sites. Moreover, they identified several sectors for which they would be keen to find out the impact of floods and droughts on various macroeconomic indicators. As many potential data sources have been identified jointly in the workshop, the next steps of the ERA project include the gathering and validation of the data that will be used for the risk assessment. Later in the project suitable adaptation measures for the cost-benefit analysis will be jointly identified with relevant stakeholders and several trainings conducted.
The kick-off workshop in Thailand marked the beginning of a collaborative effort between the Department of Agriculture, project partners, and beneficiaries to enhance the CLIMADA tool, implement the strengthened ECA framework, and improve risk assessment in Thailand. With continued cooperation and commitment, this project will significantly contribute to improving the country’s resilience to climate change. Moreover, through piloting the innovations mentioned above, the ERA project seeks to encourage the uptake and use of the enhanced and comprehensive open-source risk assessment tool CLIMADA in further countries.
Contacts: Nihar Jangle (email@example.com), Anna-Sophia Elm (firstname.lastname@example.org)