Prevents on average $20 million of losses per years Project B Project A Costs $100 million Prevents on average $20 million of losses per years Project B Costs $90 million Prevents on average $5 million of losses per years

Prevents on average $20 million of losses per years Project B Project A Costs $100 million Prevents on average $20 million of losses per years Project B Costs $90 million Prevents on average $5 million of losses per years

Two points in this presentation Physical risks have to be measured with respect to the ability of the affected population or entity to manage these risks. Monetary values alone are insufficient. Uncertainty makes standard approaches inapplicable – we are moving from cost-benefit analysis to stress-tests

These estimates can also be used to target intervention within countries Prevents $1 million per year in asset losses Prevents $1 million per year in asset losses In Binh Dinh (resilience 69%) In Kien Giang (resilience 29%) Gains in terms of well-being $1.4 million Gains in terms of well-being $3.4 million

What is the right methodology to ensure new investments and decisions account for climate risks?

Deep uncertainty makes standard cost-benefit approach inapplicable… Illustration on wetlands in Colombo Long-term decisions need to take into account the multiple possible changes in local climate (and non- climate) conditions In practice, the World Bank is trying to move toward “stress testing” development strategies and projects A 1.5 degree target would affect the likelihoods of these changes – but in an unknown manner Flood losses in the city for different climate and socioeconomic scenarios Today’s city If wetlands are not protected Source: Rozenberg et al 2015

Deep uncertainty makes standard cost-benefit approach inapplicable… Illustration on wetlands in Colombo Long-term decisions need to take into account the multiple possible changes in local climate (and non- climate) conditions In practice, the World Bank is trying to move toward “stress testing” development strategies and projects The likelihoods of these changes are not quantifiable at this stage Today’s city If wetlands are not protected Source: Rozenberg et al 2015