Environmental Management
Project Topic:
Climate Risk Assessment and Management
Group 5:
Rishabh Agrawal – 17030121004
Sanchita Chavan – 17030121011
Saurabh Ghule – 17030121022
Sahil Dandawate – 17030121073
Amey Kulkarni – 17030121092
Over the past few decades, there has been a significant rise, on a global scale, in the hazards associated
with weather and climate, which have the potential to cause loss and harm. According to the most
recent estimates of the climate, there will be a major increase in the frequency, duration, and intensity
of extreme weather events, as well as severe slow-onset climate-related changes. These factors
constitute an increasingly serious threat to the long-term sustainable development of communities
and nations. Both the climate science and the international climate negotiations stress the urgent
need to develop and implement effective climate risk assessment and management approaches in
order to prevent, minimise, and address losses and damages. At the international level, there is a
growing recognition that adaptation and mitigation may not be enough to manage the impacts of
climate change.
To be more specific, the UNFCCC has used the following definition as a working definition for the terms
"Loss and Damage." This definition states that "Loss and damage refers to negative effects of climatic
variability and climate change that people have not been able to cope with or adapt to."
Existing methods, even though there are currently a number of them in the field of short-term risk
assessment and management, particularly in the field of extreme events, frequently do not adequately
address the long-term, slow-onset changes that are caused by climate change. In addition, risk and
vulnerability assessments frequently fall short of meeting the information needs of decision-makers
and local governments in order to effectively manage the risks connected with climate change and the
losses and damages that are associated with those risks in relation to the effects of climate change
and the accompanying losses and damages.
The purpose of Climate Risk Management, which is also referred to as CRM, is to manage the
implications of climate change across the entire risk continuum. This includes managing the
implications of extreme weather events that occur over the short term as well as the implications of
gradual changes that occur over the long term. This is accomplished by integrating into a single
framework that is both comprehensive and participatory tried-and-true and innovative solutions from
the disciplines of climate change mitigation and adaptation, catastrophe risk management, and social
protection. The prevention of loss and damage, as well as its mitigation and repair, is the purpose of
this. An analysis of the risks posed by climate change forms the basis of the approach (CRA).
A Climate Risk Management Process
The six step climate risk management (CRM) process operationalises climate risk management at
scale.
1. Assess and match information needs with risk management objectives.
2. Define System of Interest.
3. Develop context-specific methodology.
4. Risk identification to identify low and high-levels of climate-related risk.
5. Risk evaluation to identify acceptable, tolerable and intolerable risks.
6. Assessment of risk management options.
Incorporating climate risks into relevant processes and policies at the national and sub-national level
encourages a comprehensive consideration of the impacts of climate change in affected sectors and
draws attention to the necessity of specific instruments and data collection, as well as appropriate
human and financial resources, and the rearrangement of institutional structures. Incorporating
climate risks into relevant processes and policies encourages a comprehensive consideration of the
impacts of climate change in affected sectors and encourages a comprehensive consideration of the
impacts of climate change in affected sectors.
The first thing that has to be done is a study of the ways in which climate-related risks interact with
the exposure and vulnerability of a system. This analysis, which should also take into consideration
socioeconomic factors, is the first thing that needs to be done. The way in which all of these
components interact is what determines the overall risk that will be posed to the system that is being
disrupted.
In order to make the planning process more efficient, the assessment needs to include not only an
evaluation of the magnitude of the anticipated consequences but also the identification of potential
losses and damages through the application of a combination of strategies that are suitable for the
circumstance.
An analysis of the costs and advantages associated with each possibility allows for the selection and
incorporation of the most promising risk management techniques to deal with hazards into a strategic
combination of activities. This can be done based on a comparison of the many options. This lays the
groundwork for the adoption of climate policy measures into other parts of national policy as well as
the public budget.
The Customer Relationship Management (CRM) framework connects tried-and-true measures with
innovative instruments and transformational techniques in a manner that is both comprehensive and
integrated in order to achieve the most effective combination of measures for a particular situation.
This is accomplished by connecting tried-and-true measures with innovative instruments and
transformational techniques in a manner that is both comprehensive and integrated.
The measures that are prioritised need to be adapted to the particular conditions, they need to be
sustainable, and affected parties need to be included in the planning process. Integration of CRM at
the institutional level as a vital component is required because integration of CRM considerations into
new and existing development planning and budgeting processes, across all relevant institutions and
industries, and at all levels is required.
Continuous learning, which feeds into the CRM framework and informs future decision making, is
generated as a result of monitoring and assessment of measures that have been put into place.
The CRM framework makes it possible for decision-makers to take into account newly available data,
fresh evidence and insights, as well as the lessons gained through monitoring and evaluating the
programme. This is made possible thanks to the fact that the CRM framework was developed. This
adaptability is vital, particularly for the introduction of brand-new technologies and methods that
might completely change the game.
The CRA lays the groundwork for an efficient and effective CRM. CRA provides information to decision
makers about potential courses of action by identifying potential risks and determining the extent to
which these risks could have an effect on people, assets, value chains, (critical) infrastructure,
settlements, and ecosystems.
The CRM framework provides input and assistance with decision-making as well as with
implementation. Understanding the organisational and economic capacity of nations, communities,
and the private sector to adapt and respond to risk is absolutely necessary in order to determine which
combination of CRM measures will prove to be the most effective in a particular setting.
The three factors of vulnerability, exposure, and hazard all working together to create risk. Although
the frequency of climate-related hazards can be minimised by the implementation of mitigating
measures, the main link between sustainable development indicators and CRM is that of increased
exposure and vulnerability of people and assets.
The CRM framework combines tried and tested approaches from CCA (such as climate-smart
agriculture and adaptation based on ecosystems) and DRR (such as early warning systems,
contingency planning, and civil protection plans) to minimise losses and damages. These approaches
come from climate change adaptation (CCA) and disaster risk reduction (DRR).
Risk finance methods offer protection against the loss of properties, livelihoods, and lives. Some
examples of risk finance mechanisms include climate risk insurance, contingency funds, and social
protection. The diversification of people's means of subsistence, decision-making processes that are
malleable and inclusive, and adaptive management strategies are all examples of transformational
techniques.
Climate Risk Assessments lay the groundwork for comprehensive Climate Risk Management (CRM) by
determining the nature and extent to which climate change and its impacts may cause harm to a
country, region, industry, or community. This lays the groundwork for CRM to be effective. In order to
better assist decision-making and planning for the future, it is essential to quantify and evaluate
climate risk. Climate risk can be defined as the result of the interplay between vulnerability, exposure,
and hazard. Therefore, the identification of current and future key risks and impacts on people, assets,
and ecosystems can help to allocate resources appropriately, in order to design adaptation policies
and projects for reducing vulnerability and risk, and to establish a baseline against which the success
of adaptation policies and actions can be monitored. This is because the identification of current and
future key risks and impacts on people, assets, and ecosystems can help to establish a baseline for
measuring the success of adaptation policies and actions.
Climate risk management process for assessing loss and damage:
Step 1: Define Status Quo
In the first step, an analysis of the current situation, a review of the information and data
requirements, and the formulation of the goal of the CRM framework application are performed. In
this step, we will identify the data demands that exist, as well as any potential gaps in the availability
and quality of the data. The first step consists of defining the overarching objective of the CRM
framework while highlighting the necessity of developing interlinkages between climate change and
disaster risk management. These interlinkages are to be developed in terms of assessment of risks and
associated data as well as analysis of institutions.
India application: In the first step, a comprehensive assessment of the Indian status quo on climate
change impacts and adaptation as well as disaster risk management at the selected level, such as a
sub-state community, is carried out. This assessment covers everything from the country's climate and
disaster profiles to a detailed evaluation of the institutions that are involved in both fields as well as
the potential interlinkages between them.
Step 2: Identifying the System of Interest
The discussion moves from a higher, more general level to a lower, more detailed level in Step 2. In
this step, a climate-related risk hot spot study and capacity assessment are carried out so that the
concrete system of interest can be determined. In Step 2, we clearly define and specify the limits of
the system of interest that the CRM framework will be applied to. This is done so that we may proceed
to the next step. For the current project, for instance, a decision was made to utilise the administrative
boundaries of states as the system of interest for the framework that is now being constructed. This
decision was based on conversations with many stakeholders. In Step 1, the objective of the
framework is defined, which is to highlight the interlinkages between climate change and disaster
risks. In Step 2, a detailed climate-related risk and capacity analysis is performed, which will result in
the identification of suitable illustrative systems of interest, also known as hotspots. Step 1 focuses on
highlighting the interlinkages between climate change and disaster risks.
India application: The states that make up each climate-sensitive region in the country (which were
listed in Step 1) are evaluated according to a variety of selection criteria in order to determine whether
or not they are capable of serving as a suitable system of interest for the implementation of the CRM
framework that is currently being developed. The procedure for choosing which states to include in
the system of interest is depicted in the picture below:
The application resulted in the identification of two hot spot states: Tamil Nadu and Himachal Pradesh.
These are states where a broad range of climate-related risks are considered significant and are being
dealt with by affected households and communities, where previous work had been conducted to
assess risks, and where the capacity to respond to risk at the government level has been found to be
substantial.
Step 3: Develop a Methodology That Is Tailored to the Context
In the third step, a context-specific multimethod approach that is tailored to the region(s) of interest
is developed in order to evaluate the possibility of climate-related consequences. Products may
include general informational studies (building on what is already available on hazards and impacts),
backward looking climate-risk analysis (broad risk assessment and scenarios using available data and
information on risk), and forward-looking scenario and risk-based model analysis (detailed risk
assessment and scenario generation, attribution assessment). These analyses may be selected based
on the available data, resources, and expertise as well as the expected output to. Products may also
include: backward looking climate-risk analysis (broad risk assessment and scenarios using available
data and information
The context of L&D demands casting light not just on monetary consequences, but also on nonmonetary implications, as well as effects on informal economic activities. This is in addition to the
typical examination of market-based impacts.
India application: Our research provides an informational assessment for the state of Himachal
Pradesh as well as for Tamil Nadu, with a strong emphasis on the backward-looking approach. This
method builds on a comprehensive risk assessment as well as available scenarios (as are available for
Tamil Nadu), making use of the information that is at hand to provide an overview of past and future
risks on reported loss and damage.
Step 4: Identify Risks
The fourth step identifies risk, which is thought of as being determined by the three risk drivers that
are hazard, exposure, and vulnerability. The climate risk assessments follow a methodical procedure
that allows for the calculation of potential threats as well as the advantages of taking appropriate
adaption steps. As a result, it is necessary to evaluate not only the direct but also the indirect,
economic and non-economic effects, for instance by the utilisation of impact chain reasoning. In order
to be all-encompassing, a strategy must combine the top-down insight gained from expert-based
approaches and tools with the bottom-up information about households' and communities'
vulnerabilities that is gleaned from participatory procedures.
India application: A model-based assessment of existing and future flood risk reveals that predicted
damage (as expressed as a proportion of GDP) is currently large and is certain to increase not only
with climatic change, but also socio-economic (asset increase) change.
Step 5: Evaluation of Risk Tolerance and Limits
The goal of the fifth step is to gain an understanding of what the risk represents to individuals who
could be affected. This requires determining acceptable levels of risk in order to do the risk
assessment. Two fundamental strategies are discussed here: semi-quantitative surveys or
assessments based on focus groups, which determine risk tolerance based on reported risk
perceptions and risk responses; risk-based modelling, which formalises risk-based decision-making by
building on modelled risk perceptions, for example to understand government actors' risk tolerance
for dealing with climate-related risks.
India application: Based on surveys and participatory engagement with farming and non-farming
households as well as the public sector in Tamil Nadu, the study finds that climate-related risks
(cyclones, floods, salinization) are of similar concern as other prevalent risks, such as those associated
with price shocks and health problems. Overall, these climate-related risks are considered to be of
moderate importance.
Step 6: Identify Potential Courses of Action
At the sixth step, the prospective choices for reducing climatic risks are evaluated, and at the same
time, risk management options are identified for the risks that are still there and could potentially
cause loss and harm. When it comes to mitigating or financing risk, one has a wide variety of potential
risk reduction, readiness, and risk financing options at their disposal. Even while the elimination of
risks and the prevention of catastrophes are the primary focuses of attention, it is essential to devise
strategies to mitigate any remaining dangers that still exist and have the potential to result in calamity.
Applying the risk management classification described earlier, which divides potential risk solutions
into three categories—incremental, fundamental, and transformative—is one of the primary focuses
of our research into the management of severe threats that approach the boundaries of adaptability.
This process also includes the identification of options that are realistic from a technological,
ecological, and socioeconomic point of view.
India application: The study with a focus on the community that was carried out in Tamil Nadu led to
the compilation of a list of various risk management activities that have been done or are currently
being considered. Using our methodological approach as a foundation, for instance, the following
diagram can be constructed to represent replies from farm-level households. The majority of
interventions can be thought of as being incremental, some can be thought of as fundamental, and
one can be thought of as transformative.