Introducing a Micro-Flood Insurance Market in Bangladesh: Institutional Design and Commercial ViabilityPosted on: 2 June 2011 - 10:31am
The main objectives of this paper are to design and test the commercial viability of the introduction of different flood insurance schemes in Bangladesh, one of the poorest and most flood struck developing countries in the world. The study presented here takes place in the context of both low supply due to the inherent risky nature of high expected losses caused by flooding and low insurance demand due to lack of financial income resources of large parts of the floodplain populations. In this paper we compare the expected compensation payment by potential insurers with the expected premium for different flood insurance schemes under two different institutional- analytical models: a partner-agent and full service model of micro-insurance. We find that although demand and willingness to pay (WTP) for flood insurance are low in flood risk areas in Bangladesh, commercially viable markets exist for house property and unemployment insurance. However, administrative implementation costs of micro-insurance play a significant role in determining the viability as well as the long-term sustainability of micro flood insurance schemes. The policy implication of the work presented here is that partner-agent models of microinsurance organization are a precondition for the long-term sustainability of a micro flood insurance market. We conclude that a full service based organizational structure is only viable in places where flood probability is considerably low.
The aims of the study presented in this paper are to assess the demand for and test the commercial viability of a crop insurance scheme in different natural disaster-prone areas in Bangladesh, as an alternative poverty alleviation and natural disaster mitigation strategy. In a large scale household survey carried out at the end of 2006, 3600 riverine and coastal floodplain residents in Bangladesh were asked for their preferences for crop insurance schemes using the double bounded contingent valuation (CV) method. For example, asking them for their willingness to pay (WTP) for crop insurance schemes to eliminate future catastrophe risks. We find crop insurance demand to be positively correlated with household head’s primary occupation, land ownership and size of agricultural farm land. Our study further reveals that crop damage cost and households’ willingness to pay to reduce damage vary significantly across the nature of the disaster risk. Using the data collected through household survey, we tested our simple analytical model of commercial viability of a crop insurance scheme by comparing the future value of expected premium receivable by insurer, with the expected indemnity payable to the insured. Assuming zero administrative cost and 10% interest rate per annum, we find crop insurance schemes are marginally viable in riverine flood plain areas (both embanked and unembanked). The difference between the average expected indemnity payment and the future value of expected insurance premium is way too high for the nature of risk and amount of damage cost faced by households living in haor basin and coastal floodplain areas.
Socio-economic vulnerability and adaptation to environmental risk: A case study of climate change and flooding in BangladeshPosted on: 30 May 2011 - 12:50pm
This paper investigates the complex relationship between environmental risk, poverty and vulnerability in a case study carried out in one of the poorest and most flood prone countries in the world, focusing on household and community vulnerability and adaptive coping mechanisms. Based upon the steadily growing amount of literature in this field, an analytical model was developed and tested. In a large-scale household survey carried out in the south-east of Bangladesh, almost seven hundred floodplain residents living without any flood protection along the river Meghna were surveyed about their flood risk exposure, flood problems, flood damage and coping mechanisms. Novel in this study is the explicit testing of the effectiveness of adaptive coping strategies to reduce flood damage costs. The study shows that, as expected, households with lower income and less access to productive natural assets face higher exposure to risk of flooding. Disparity in income and asset distribution at community level furthermore tends to be higher at higher risk exposure levels, implying that individually vulnerable households are also collectively more vulnerable. Regarding the identification of coping mechanisms to deal with flood events, the study looks at both the ex ante household level preparedness for flood events and the ex post availability of community level support and disaster relief. The study finds somewhat paradoxically that the people that face the highest risk of flooding are the least well prepared, both in terms of household-level ex ante preparedness and community-level ex post flood relief.
This report is a contribution to CIFOR’s multiyear Global Comparative Study on REDD+, which aims to provide policy makers, practitioners and donors with strategic information on reducing emissions from deforestation and forest degradation, and enhancement of forest carbon stocks in developing countries.
This country profile for Brazil focuses on the Brazilian Legal Amazon region, which is made up of all or part of 9 states, and in particular on the Amazon rainforest biome (consisting primarily of dense and open broadleaf tropical rainforest). Some reference is made to areas in the cerrado biome, which are pertinent because of pressures of expansion in nonforest land uses, and because of persistent confusion regarding transition zones between the 2 biomes.
This study forms part of Component 1 of the Global Comparative Study on REDD+ (GCS-REDD) conducted by the Center for International Forestry Research (CIFOR). The aim of the GCS-REDD is to inform decision-makers, practitioners and donors on what is likely to work, and what is not, in the REDD+ mechanism. It is important to look ahead to understand how REDD+ will be implemented. Five countries—Bolivia, Brazil, Cameroon, Indonesia and Vietnam—were selected for the first phase of the Component 1 of GCS-REDD. The research begins with case studies at the national level, followed by a comparative analysis of the findings to summarise national results at a more global level. These case studies are carried out using the following methods: country profiles, media discourse analysis, policy network analysis, strategy assessment and specific policy studies.The country profile is an attempt to place REDD+ in context.
Environment and poverty nexus is still a polemical issue. Some schools of thought claim that poverty has the major effect on the environment, while another school of thought suggests that the environment has more impact on the poor than vice-versa because the poor have no power to exploit the environment. In the context of Cambodia, there is a general consensus that the poor, particularly those living in rural areas, are heavily dependent on the environment i.e. common property resources. If the environment is degraded, the livelihoods of those people will definitely be severely affected. This paper aims to address the impact of environmental degradation on poverty in Cambodia which will be presented in the 2011 annual conference of the Asia-Pacific Economic Association.
Sustainable poverty reduction requires access to natural resources. While natural resource tenure includes rights over land, it encompasses other natural resources as well. The property may be farm land, grazing land, forest land, a river, a fishery, wildlife or some other resource, including minerals. Each of these resources possesses particular physical qualities and technical constraints concerning their use, yet they fit into an integrated ecosystem.
The key message of this study is that secure access to tenure for the poor is essential to poverty reduction and the realisation of human rights. This assessment shows that natural resource tenure is inherently complex.Incomplete understanding, and ignorance or disregard for fundamental complexities, may lead to erroneous policy prescriptions and ultimately, to conflict about these resources.
This paper provides information on the sub-national areas (regions/districts/provinces) most vulnerable to climate change impacts in Southeast Asia.
The study used data on the spatial distribution of various climate-related hazards in 530 sub-national areas of Indonesia, Thailand, Vietnam, Lao PDR, Cambodia, Malaysia, and the Philippines.
Based on this mapping assessment, all the regions of the Philippines; the Mekong River Delta in Vietnam; almost all the regions of Cambodia; North and East Lao PDR; the Bangkok region of Thailand; and West Sumatra, South Sumatra, West Java, and East Java of Indonesia are among the most vulnerable regions in Southeast Asia.
Environmental Consequences of and Pollution Control Options for Pond "Tra" Fish Production in Cantho City, Viet NamPosted on: 12 May 2011 - 4:26pm
This EEPSEA study from Vietnam looks at the pollution problem caused by fish farming in the Mekong Delta (MD) and assesses a number of treatment options that could bring this pollution down to acceptable levels. It finds that a trickling-filter system would be the most costeffective response to this challenge. However such a system would cost farmers more than they currently pay to discharge their polluting wastewater. The study therefore suggests a number of policy options that
would encourage fish farmers to reduce the amount of pollution they discharge and help them to meet the necessary clean up costs.
This EEPSEA study from the Philippines investigates erosion in one of the country’s more developed coastal regions. It finds that this coastline is vulnerable to the impact of erosion and that, if nothing is done, the problem will cause hundreds of millions of pesos worth of damage. It also finds that a planned protection strategy is the most rational approach to adopt. Such a strategy is socially and politically acceptable, justifiable from an economic perspective and also preserves the area’s beaches along with the social services they provide.