5B.4 Economic Assessment of Hydro-Met Services and Products: A Value Chain Approach

Tuesday, 24 January 2017: 4:45 PM
310 (Washington State Convention Center )
Jeffrey K. Lazo, NCAR, Boulder, CO

Weather related hazards such as typhoons, floods, heat waves, droughts, and tornadoes cause billions of dollars of damage and affect millions worldwide in both developed and developing countries. Between 2004 and 2013 an annual average of 127 meteorological, 32 climatological, and 192 hydrological disaster affected an average of 191 million people each year, and caused an average annual $122 Billion dollars of damages (Guha et al 2015). “Day-to-day” events (not considered “disasters”) likely have an even larger aggregate impact on society and affect virtually everyone on the planet in some manner every year. While not all (or perhaps even most) of the impacts can be avoided or mitigated, with appropriate information systems and processes there are undoubtedly significant societal benefits of geo-spatial information on weather, water, and climate. Developing a better understanding of the socio-economic value of hydro-met information is the focus of some recent efforts (WMO 2015).

In this paper I develop the concept of the “Weather Information Value Chain” as a tool for understanding the creation of value from hydromet information as well as explicating the difficulties of valuation and opportunities for value enhancement. Building on the value chain concept, I offer that economics as a study of human behavior and decision making can help in understanding the weather related decision making process and thus enhance product development, communication approaches, and ultimately decision making to increase societal value. I present an example of valuation of hydromet information in the context of a “value chain” based on research to improve forecasting for utility scale solar power generation (Haupt et al. 2016).

I briefly note several factors related to explication through the value chain model including (1) alternative methods for characterization of the information value process (Lazo et al 2016), (2) the significant opportunity for the application of concepts from behavioral economics for better understanding responses to hydro-met information, (3) the context, concept, and measurement of vulnerability and resilience within which the Weather Information Value Chain is embedded, and (4) ethical frameworks that should be more explicitly articulated in the process of value assessment as well as in decision-making for improving weather information processes.


Guha-Sapir D, P. Hoyois, R. Below. 2015. “Annual Disaster Statistical Review 2014: The Numbers and Trends.” Brussels: CRED; 2015. Available at http://cred.be/sites/default/files/ADSR_2014.pdf.

Haupt, S. E., and Coauthors, 2016: The SunCast Solar Power Forecasting System: The Result of the Public-Private-Academic Partnership to Advance Solar Power Forecasting. NCAR Technical Note NCAR/TN-526+STR, 307 pp, (available at: http://dx.doi.org/10.5065/D6N58JR2)

Lazo, J.K., A. Bostrom, R.E. Morss, J.L. Demuth, and H. Lazrus. 2015. Communicating Hurricane Warnings: Factors Affecting Protective Behavior. Risk Analysis. 35(10):1837-1857.

WMO, WBG, GFDRR & USAID. 2015. Valuing Weather and Climate: Economic Assessment of Meteorological and Hydrological Services. World Meteorological Organization, World Bank Group, Global Facility for Disaster Reduction and Recovery, and United States Agency for International Development, WMO No. 1153.

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