Wednesday, October 26, 2011

A Correlation Sales Pitch?

In catastrophe models produced for the Florida property insurance market, science need only be published in a peer review journal. Of all the science that is produced regularly, which science gets chosen to support the public's goals? The decision of which science to use might consider some involvement of who such usage will benefit and if it is its usage is warranted. For instance, who does it benefit to include climate change predictions in insurance ratemaking? And, with losses resulting primarily from social factors, is it warranted to include such information?
Recently, I received an announcement about a campus talk. The talk is being given by Dr. Peter J Webster. Webster is noted for his work on tropical cyclones and climate prediction generally. The following announcement leaves one's imagination to wander and wonder, who will benefit from this science? Additionally, who identified and framed this social problem- which seems to be a correlated risk between monsoon loss and microloan default to be solved with climate prediction? In fact, several researchers have document serious social problems associated with climate and weather forecasts being used bu financial institutions in developing areas. See for example here.
Probability, Prediction and Decisions: A Pathway to the alleviation of poverty in the developing world

During the last few years, radical economical ideas have been put forward to allow people to emerge out of poverty. Muhammad Yunis introduced the concept of micro-loans that “lend money to people who need the money (Yunis)” for which he received the 2006 Nobel Prize in Economics. Through this method, thousands of people in the less-developed world have slowly eased themselves from poverty and “now go from door to door selling things and not begging (Yunis)”. But there is a bigger problem that effect 10’s of millions of the poor each year: slow rise monsoon floods. These extremes visit Bangladeshis and Indians multiple times in a generation and are relentlessly impoverishing. After such events, loans still have to be repaid and the treadmill of poverty increases the slope of the treadmill of intergenerational poverty.

We ask a simple question. Is it possible that environmental predictions of natural hazards delivered to communities in the most effected regions can reduce the devastating economic social impacts? In parallel with Yunis, can the introduction of environmental hazard forecasts to those who need them at the village or union scale impart a reduction in poverty? We will discuss the results of a decade long experiment in Bangladesh where a scheme for the probabilistic prediction of floods out to 10-days has been developed and implemented. Since 2007, the system has been operational and attached to a warning system where communities are trained to use forecasts and take remedial actions ahead of flooding to reduce their impacts. Economic analyses show that communities that used the forecasts made savings in units of annual income.

Finally, we consider a warming world where flooding in South Asia is projected to become more frequent and intense. For example, the return time of Ganges and Brahmaputra extended 10-day flooding is expected to half during the next 50 years to every 3 years. We close with the conjecture that societies that learn to deal with current environmental hazards will be best equipped to deal with the greater risk of hazards in the future.
I saw the talk.  It covered a lot of ground, potentially appealing to an array of interests.  It also seemed to make an earnest appeal to helping farmers make better decisions about their crops.  Several research projects were introduced such as SHAZAM and RIMES that sought to aid decision making by producing predictions and forecasts.  In Webster's opinion, sustainability will be imposible without the use of hydrometeorological predictions.  This was in the midst of extended discussion of monsoon predictions with IPCC predictions of future climate. 

Intermittently in the discussion were words like "aggregated risk,"  "catastrophic risk" which is primarily a finance term.  There was also a distinct appeal to the willingness and ability of poor Bangladeshi and Pakistani farmers to use risk concepts and understand risk.  He also mentioned briefly microlending institutions and even when there are floods, "the loans still have to be paid back." 

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