Appraising Social-Economic Benefits (SEB) of weather services

Transcription

1 Appraising Social-Economic Benefits (SEB) of weather services A. Perrels, Th. Frei, F. Espejo, L. Jamin, A.Thomalla

2 Outline of talk 1. Background and motivation 2. How benefits are generated 3. Planning SEB studies 4. Conclusions

3 Background and motivation Challenges In many countries the role of the NMHSs has changed during recent years. NMHSs concentrate more and more on delivering core services and serving the public. (see: WMO EC statement on role and operation of NMHSs) Provision of weather information through different media blurs the position of the NMHSs EU initiatives such as INSPIRE or PSI have influenced national legislative There is an ongoing trend towards an open data policy (-> Oslo declaration 2009) in Europe; some NMHSs have withdrawn from commercial activities Financial crisis forces governments to budgetary restrictions and to better assess return on investments

4 Background and motivation Why SEB appraisal of weather services? As a consequence, it is becoming more and more substantial to demonstrate the benefit of meteorological services to society It is evident to explain how the benefits are generated! A concise SEB study will underline value for tax money (justify infrastructure investments, pay off of services for society) can support service innovation (mapping customer satisfaction, prioritize product developments) will support links to stakeholders and to other policy areas (demonstrating social benefits generated by supporting planning activities such as climate services)

5 Background and motivation RA VI activities The Regional Association VI, taking into account the outcome of the Madrid Conference 2007 on Secure and sustainable living, encouraged its Members to carrying out economic assessment of benefits of meteorological services to society. It endorsed actions to develop a methodology for use by NMHSs in RA VI for assessing socio-economic benefits. RA VI conference on Social and Economic Benefits (Lucerne, 2011) It authorized a Taskteam on SEB to develop guidelines on how to investigate the socio-economic benefits of meteorological and hydrological services and to advise on how to set up SEB studies Report will be published end of 2012

6 Public weather services Customers* Public / End user respond re-user How benefits are generated Provision of services and related value added (VA) basic / customized services Basic met. services Media *include commercial customers as well as public authorities NMHSs VA 1 VA 2 VA 3

7 Planning SEB studies Different types of appraisal I The goal of a socioeconomic study is generally to assess socioeconomic development, in terms of improvements in metrics such as Gross Domestic Product (GDP), life expectancy, literacy, levels of employment, etc. (Wikipedia) Valuating SEB of weather services requires the assessment of incremental effects of meteorological information on value added. They depend on the service chain and on the uptake of information. The uptake of information is a key point. If a user is able to understand correctly and to take a decision, theoretical decision models may be applied (e.g. Cost-loss based analysis) Service-chain and uptake of information are different from sector to sector, thus Cost-Benefit Analysis (CBAs) are sector-specific

8 Planning SEB studies Different types of appraisal II Different levels: qualitative studies (e.g. surveys), simple CBAs (direct effects), full blown CBAs containing indirects effects.. Company one sector overall SEB As many users decisions are not based on economic thoughts and uptake of met. information depends on users knowledge, simple cost loss analysis often fail. (It is complex to express the impact of met. services on non-profit organizations, such as disaster management, in monetary terms) More sophisticated approaches take into account the different stages of service provision and the decay of information. As a consequence evaluation method(s) strongly depend on different value chain, product and user skill. (sector-specific) Principal purposes for conducting SEB analysis vary across countries, so one have to be careful when to comparing results of SCBAs.

9 Planning SEB studies Cost-Benefit Assessments can take many forms WMO/TD 1510 (2010) NMHSs their Partners and User Communities Basic document identified four types of approaches to assess economic benefits, which were termed as follows: Market price: for private goods. Not applicable for public goods where use of information does not reduce the information for other users Prescriptive models (theoretical decision models): assessed benefits for assumptions of perfect vs. imperfect knowledge about weather events (estimate higher profits, lower costs ) Behavioural studies (more realistic). They require close collaboration with the users to understand their specific decision model and benefits. Valuation methods based on the willingness to pay (WTP). WTP is an approach by asking the tax payers which amount of money they would pay for a public service

10 Planning SEB studies Guideline for setting up SEB studies in a NMS Very important: Define targets - in line with the strategy of the organization! Requires good preparation in the forefront. Need examples of suitable customer relationships / services notably those that offer significant development potential Guidance document describing scope (sectoral or global), targets, study type, options, required resources, external partners and milestones of the project Study should be authoritative, hence a science partner for review is required Dissemination strategy is a key step. Describes how stakeholders are informed during the study and how results are communicated. Preparation needs 6 9 months, study itself about 1 year

11 Planning SEB studies Examples of SEB studies Meteorology a Revenue Generating Science, Ministry of Transport and Energy Denmark (2006) overview of met. services with case studies for selected sectors using prescriptive models Benefits of meteorological services in Croatia, VTT Technical Research Centre of Finland (2008) comprehensive report on services and their benefits applying sector specific studies The Public Weather Service s contribution to the UK economy (2007) WTP analysis of the public, analyse savings and gains through different public agencies using PWServices. Benefits and value of meteorological information services the case of the Finnish Meteorological Institute (2009) Economic benefit of meteorology in the Swiss road transportation sector (2012)

12 Conclusions Conclusions Current studies of NMHSs show good a cost-benefit ratio (5-10) SEB studies can serve many purposes: justification of public investments, highlight importance of meteorological services, support policy links, benchmark customer groups, helps to improve services A SCBA stimulates an intense dialogue with customers, thus it improves effectiveness and value of meteorological services A careful planning is required, including a dissemination strategy (a full blown CBA may take 1,5-2 years) In order to make best use of the results, it is approved to conduct SEB studies regularly as part of the planning and strategy of the NMS. Depending on product-market combination, purposes and level of the study, different methodologies have to be be applied. First time start SEB analysis on a few selected sectors to avoid complexity

13 Thank you! Axel Thomalla Deutscher Wetterdienst