Reading Chapter 3: The Decision Tree Framework

Source: Confronting Climate Uncertainty in Water Resources Planning and Project Design, World Bank Group, (2015). Accessed from https://openknowledge.worldbank.org/handle/10986/22544 .

Notes:
This chapter describes "bottom-up climate risk assessment methodologies" recommended by The World Bank (pg. 25). The methodologies are organized into a decision tree, and the decision tree has four phases.

The purpose of the decision tree framework is to assess the risks associated with a water resource project.

Part One: Project Screening. The first phase of the four phase decision tree is for screening whether a project has climate sensitivities (page 29). The screening can be completed through a worksheet in Appendix B of the World Bank document. Some of the questions on the worksheet that must be answered to complete a project screening are on whether the water project is infrastructural, what data is used in the design of the project, and what are the projects performance indicators.

After the screening, projects without climate sensitivities may 'exit the decision tree'. The evaluation of projects with climate sensitivities move on to phase 2 of the decision tree.

Part Two: Initial Analysis. The second phase of the decision tree is for quantitative analysis of the project's climate sensitivity. The analysis might be a regression analysis on whether the project's performance indicators are likely to be met. Historical data for these regression analyses can be found at the World Bank's Knowledge Portal, the Nature Conservatory's Climate Wizard, and The United Nations Development Programme's Adaptation Learning Mechanism (pg. 38).

By performing the analysis, the project manager with generate a product, the Climate Risk Statement.

If the climate sensitivities analyzed in phase two are proven to be small, the project may exit the decision tree at phase two. If the risks are significant, on the other hand, the project will move on to phase 3 of the decision tree.

Part Three: Climate Stress Test. The third phase of the decision tree is for generating different scenarios for the water project with different climate risks. For example, generating a climate response map on the water system's performance in different climates (pg. 41).

If the water project does not have signifiant climate vulnerabilities it might exit the decision tree. Projects projected to fail in the relevant climates will move on to phase 4 of the decision tree (the final phase).

Part Four: Climate Risk Management. The fourth and final phase of the decision tree is for augmenting the water resource project to mitigate the project's risks. The project manager will generate a product, the Climate Risk Report in this phase. The purpose of phase 4 is to move from risk analyses to augmenting the project with solutions that decrease the project's risk. The project might then 'jump back' from phase 4 to phase 3 to be stress tested again before the project manager generates another product, the Climate Risk Management Plan for a water project design with low risks given climate change(pg. 48).