Production Sector Climate Risk Analysis in the Philippines

Update

The project has recently supported 5 key activities:

  1. A risk assessment for the agricultural sector, with primary focus on the rice sub-sector and the key productive regions.
  2. A climate analysis to develop a set of seasonal indicators to monitor crop/rice production.
  3. A field based analysis of local/community vulnerability in regions 2 and 5 of the Philippines.
  4. An analysis of entry points for mainstreaming of risk in macroeconomic and budget planning.
  5. An analysis of rural financial institutions and financial management of financial risk arising from weather calamities.

Draft reports for the above activities were produced in June and the findings were disseminated during a mission in September 2008. After a final round of review and feedback from the stakeholders, the reports will be compiled and produced as a joint ProVention/World Bank/Government of the Philippines publication.

Description

Background

Climate change must be treated as a major economic and social risk, and not just a long-term environmental problem. As such, measures developed need to be integrated into economic planning, and the preparation of sectoral plans and budgets. Climate change will particularly affect the Philippine economy through its impacts on natural resources and agriculture, sectors that are crucial to the countrys economic development and poverty alleviation. Given such impacts, major investments in these sectors may not pay off as planned, which in turn could seriously affect poverty alleviation and socio-economic development.

Objectives

The initiative has three main objectives

  1. To quantify and model natural hazard risk for the Philippines in an objective fashion that will represent a scientific and numerical basis to inform weather and climate risk management practices and policy, disaster risk reduction, and risk transfer with particular focus on the agricultural production sector.
  2. To document current mechanisms of risk transfer and risk management in the agricultural sector and identify opportunities to apply more efficient risk transfer schemes, such as those based on parametric indices, which eliminate the issue of moral hazard.
  3. To produce solid and validated climate change impact scenarios that will enable local stakeholders to make informed decisions on adaptive measures to climate change and integrate adaptive measures to climate change with disaster risk reduction.

The results of which would eventually be integrated into economic and operational planning, particularly in agriculture and natural resources management.

Activities

The initiative, as originally planned, consisted of three key activities:

  • enhance the availability of reliable data on vulnerability of the agricultural production sector in the Philippines;
  • strengthen institutional and operational structures for more effective risk management at national and sub-national levels, which ultimately could support the transfer of risk on the basis of parametric weather insurance or weather-based mechanisms to protect and fund safety nets for the most vulnerable;
  • provide a cross-cutting analysis of lessons learned in the innovative Special Climate Change Fund (SCCF) project, including the production, packaging and application of risk information, and the role of risk transfer.

Timeline

The work started in May 2007 and should be completed by November 2008.

Partners

With respect to climate change, most government stakeholders have until now largely focused on mitigation of greenhouse gas emissions, including through the Clean Development Mechanism. Adaptation requires a much broader focus and increased mainstreaming of activity implementation in a more efficient and coordinated institutional framework.

This initiative is lead by a cross-sectoral team at the World Bank, in close collaboration with the Philippine Department of Agriculture; the Crop Insurance Corporation (PCIC); the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA); the National Mapping and Resource Information Authority (NAMRIA) and some microfinance institutions.

Other partners will be invited to contribute to this initiative, either directly or indirectly: the Asian Development Bank, JBIC /JICA, UNDP as the focal point for immediate post-disaster activities in the country, and the Red Cross, depending on the activities to be implemented. As the project is generating risk information, it will also be linked to the GRIP project, and make use of the capacity development approach formulated under that initiative.

Links

Linkages with other ProVention initiatives

The activities around developing risk information for the Philippines are related also to the ProVention-supported GRIP project. In addition, the proposed activity for the Global Index Insurance Facility in Madagascar comprises similar efforts to develop risk information for that country. It is envisaged that the two activities could generate information that could inform the other in particular given the similarities in the two countries; each a large island, mainly agricultural based, and vulnerable to significant climate oscillations. The lessons learned paper will provide ProVention partners with guidance on models for climate risk mainstreaming, and can feed into a review of the ProVention mainstreaming guidance notes, particularly regarding the integration of climate change adaptation.

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