Systematic Analysis of Climate Resilient Development: A Marco-economic framework

In 2010, several research clusters provided national level case study analyses of the impact of climate change on the macro economies for the World Bank’s Economics of Adaptation to Climate Change (EACC) study prepared for the Copenhagen COP. Responding to the need highlighted by the EACC case studies and to assist policy makers in evaluating the potential economic impacts of climate change, the United Nations University – World Institute for Development Economic Research (UNU-WIDER), developed an analytical framework, called Systematic Analysis of Climate Resilient Development (SACReD). The SACReD approach integrates comprehensive biophysical modeling with economy-wide economic analysis. The climate impacts and adaptations component of the SACReD framework is illustrated in Figure 1.

The World Bank has recently embarked on a program of Country Climate and Development Reports (CCDR) to better understand the benefits and costs of climate action and cross-sectoral policy priorities to manage climate risks effectively with macroeconomic analysis a key component. Many of the CCDRs followed the SACReD framework to assess economy-wide macroeconomic impacts. Most CCDR chose a limited set of 3 Hot-Dry and 3 Wet-Warm climate scenarios, used to assess the range of climate uncertainty.

Within the context of past CCDRs, consideration of adaptation has typically drawn on a shortlist of interventions evaluated over the limited climate scenarios. The CCDR for Armenia, employed a Robust Decision-making framework to more systematically identify, evaluate, and select resilient adaptation investments that were macro-economic robust and climate resilient.

A Robust Decision-making approach was use based on macro-economic net benefits and total costs of each portfolio under 55 different climate futures. We assessed robustness tailored to the timeline and resources of a CCDR. Presentation of the Armenia approach and CCDR results as well as lessons learned, and recommendations will be presented.