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Assessing the Economic Value of Climate Predictions

Description:

In order to measure the economic value of the use of climate information, a methodology is under development to estimate the use of climate information by the Southeast agricultural sector. If and when completed, this methodology may be transferable to other sectors, or it may be necessary to develop other sector-specific methods of assessing the use of climate information and the value of the information to that sector. Methodologies, whether the existing development or those to be developed, should also be able to assess the economic value of improved predictive capability given that the information provided will be incorporated into sectors’ decision making processes. For new methodologies, the measures need to be specific for different sectors of the national economy, but general in transfer of applications from one sector to another. Key sectors of the national economy may include, but are not limited to, agriculture, management of water resources, health, conventional and renewable energy, and transportation. An assessment of sectoral needs for climate information and sensitivity to the quality of the information should be achieved as part of this project. Project outcomes include a measure of the economic value of climate predictions, which will provide an assessment of: • Dollars saved by a sector of the economy as a result of use of climate predictions; or • Loss avoidance in the economic sector as a result of use of climate predictions; and • Projected savings with percentage improvement in skill of climate predictions.
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