B. Impact Analysis
The term ‘impact’ in the current context is used to refer to the effects of weather-related events and natural disasters on lives, ecosystems and economies, including livelihoods, institutions, services and physical infrastructure. The impacts of climate change on geophysical systems, including floods, droughts and sea-level rise, are a subset of impacts (IPCC, 2014).
The impact analysis contains the following steps
Impact analysis should take place prior to and after a disaster occurs. The pre-disaster impact estimate should be conducted as an instrument for proactively developing a comprehensive DRM strategy. The post-disaster impact analysis provides actual data for 1) defining the financial requirements for response and resilient recovery, and also for 2) updating databases used for the assessment and quantification of weather-related risk in the pre-disaster phase.
The distinction between direct or indirect impacts helps clarify the roles and responsibilities of different actors, especially between the government and the private sector. Direct impacts on farming households are, for instance, loss of harvest, and damage to buildings and other productive assets. Indirect impacts refer to workers temporarily not available or ‘flow effects’ arising, for example from reduced system function due to damage to government and financial services.
Pre-disaster impact estimates are related to the results of the risk assessment and require similar expertise, led by the minister for the agricultural sector and including technical agricultural specialists. Post-disaster impact analysis requires sector-specific assessments. This would mean the Ministry of Agriculture (MoA) cooperates with other ministries such as finance, infrastructure and rural development, often supported by international organizations such as the World Bank or United Nations.
SYNERGIES: INSURANCE AND RISK ASSESSMENT
Loss and damage data from insurers enable governments to identify needs and take action
Assessing loss and damage due to extreme weather events, as done by the insurance industry, is a prerequisite for identifying needs and policy priorities in the agricultural sector. Quantifying loss and damage caused by extreme weather events enables the government to plan ahead, and take necessary action that could lead to the reduced impact of extreme weather events.
Improved quality of risk assessment − private sector
If the insurance industry shares aggregate loss data, the private sector would benefit as it could improve the quality of its risk assessments, resulting in better DRM planning.
Data for potentially insurable losses
The insurance industry benefits from the impact analysis, providing information on potentially insurable losses and damages, which is a precondition for underwriting and product pricing.