This document provides an overview of quantitative climate risk analysis and adaptation option appraisal. It summarizes a case study on multi-hazard risk mitigation in San Salvador that utilized this methodology. The case study involved quantifying current and future risks from tropical cyclones, floods, and landslides under climate and socioeconomic scenarios through 2040. Risk was assessed for eight asset categories and population. Potential adaptation options were then evaluated based on their ability to reduce risk and costs.

1. Introduction to Quantitative
Climate Risk Analysis and
Adaptation Option Appraisal
Evelyn Mühlhofer, Prof. Dr. David N. Bresch
Institute for Environmental Decisions, ETH Zurich/MeteoSwiss,
www.wcr.ethz.ch, https://github.com/CLIMADA-project/climada_python
NAP Expo: “Raising adaptation ambition by advancing National Adaptation Plans” 8 - 12 April 2019,
Songdo, Republic of Korea

2. Guyana: Flash flood
risk to a developing
urban area
Tanzan
ia
Tanzania: Drought
risk to health and
power generation
Samoa: Risk of sea level
rise to a small island
state
Florida: Hurricane risk to
public and private assets
Mali: Risk of climate
zone shift to agriculture
India: Drought risk to
agriculture
US Gulf Coast:
Hurricane risk to the
energy system
New York: Cyclones
and surge risk to a
metropolis
Hull, UK: Flood and
storm risk to urban
property
China: Drought risk
to agriculture
El Salvador: Flood
and landslide risk to
vulnerable people
Bangladesh: Flood risk
to a fast-developing city
Caribbean: Hurricane
risk to small islands
8x
THE WORLD BANK
>20 adaptation case studies worldwide
www.wcr.ethz.ch/research/casestudies.html

3. Overview
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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4. • Quantitative Risk Analysis & Adaptation Option Appraisal (ECA)
• Insight from a case study: Multi-hazard risk mitigation in San Salvador
• Discussion
• Experiences
• Limitations, Opportunities, Alternatives (incl. GIZ / PIK)
• Link to NAP Planning (incl. GIZ)
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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5. What if…
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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6. … you were the mayor of a populous Central American city
… an international organisation approached you with a US$ 6 million
project budget for adaptation to natural hazards
Where to start?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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7. April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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8. April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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9. No means of quantitatively assessing
… expected damage to assets and people over time
… changes due to climate change & socio-economic development
… damage reduction potential
… highest-risk areas
… cost-benefit ratios of different adaptation options
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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10. Integrating risk analysis & adaptation appraisal into NAP
planning
Risk assessment
We may…
specify our risk appetite in line with development priorities
incorporate further criteria relevant to us in addition to cost-
benefit ratio
(re-)prioritize adaptation measures according to priorities
develop a roadmap with priority initiatives
integrate into NAPs and related planning documents
use roadmap for funding discussions
speed-up implementation with the additional funding, further
strengthen resilience
Risk
today
Socio-
Economic
Developm
ent
Total
future
risk
Climate
change
Adaptation option appraisal
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
April 8, 2019
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11. Quantitative Weather & Climate Risk Analysis
within the
Economics of Climate Adaptation (ECA)
methodology
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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12. Economics of Climate Adaptation (ECA)
“Provide decision makers on local to national scales with the facts and methods necessary to design and
execute an adaptation strategy to natural hazards in a changing climate, in a robust and replicable way”
Rigorous risk management approach to
(1) identify and …
(2) assess (quantify) risk today, additional risk due to socio-economic development and climate change
(3) Propose, appraise and prioritize a basket of adaptation measures to address weather and
climate risk on an economic basis (e.g. cost-benefit metric)
Supported by the open-source & -access CLIMADA simulation platform
https://www.ethz.ch/content/dam/ethz/special-interest/usys/ied/wcr-dam/documents/Economics_of_Climate_Adaptation_ECA.pdf
https://github.com/CLIMADA-project/climada_python
Guidebook for Practitioners:
www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No6_Guidebook_Economics-of-Climate-Adaptation_EN.pdf

13. 1. Problem definition, Goal
7. Implementation
6. Decision (?)
NO
NO
Criteria
met?
Problem
defined
correctly?
2. Decision criteria
3. Risk analysis
4. Identify options
ECA
CLIMADA
8. Monitoring
5. Options appraisal
see e.g : Souvignet, Wieneke, Müller & Bresch, 2016: Economics of Climate Adaptation (ECA) - Guidebook for Practitioners. Materials on Development Financing, UNU, KfW.
https://www.kfw-entwicklungsbank.de/PDF/Download-Center/Materialien/2016_No6_Guidebook_Economics-of-Climate-Adaptation_EN.pdf Figure based upon IPCC und UKCIP
Decision Making Cycle and ECA

14. ECA I - Risk Identification
• Pre-selection of area
• Pre-selection of hazard types
• Pre-selection of assets / people / commercial activities, …
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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15. Climate change
risk = hazard x
exposure x
vulnerability
(= probability x intensity)
ECA II - Risk Quantification
April 8, 2019 Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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16. ECA II- Risk Quantification
Risk
today
Total future
risk
Socio-
Economic
Development
Projections
Climate change
Scenarios
IncreasingRisk
April 8, 2019 Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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17. ECA II – Weather & Climate Risk Quantification
• Data Acquisition & Management
• Scenarios definition
• Hazard modelling
• Asset valuation
• Damage simulation
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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18. Adaptation Options Appraisal
within the
Economics of Climate Adaptation (ECA)
methodology
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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19. • Identification
• local stakeholders
• Parametrization
• Change in impact
• Change in hazard
• Cost-Benefit
ECA III – Adaptation Option Appraisal
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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Total future
risk
Residual
risk
Avoided
DamageAdaptation
40-60% of risk can be
cost-effectively avoided
up to 2030!

20. • Probabilistic Risk Modelling & Adaptation Economics Platform
• Open Source & open access
• Model Demonstration: CYBER HOUR Session 6.1 (Thu, 16:00 - 17:30)
ECA Implementation – CLIMADA
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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21. Case Study:
Multi-Hazard Risk Mitigation in San Salvador
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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22. Scope Definition (ECA I)
Metropolitan Area of San Salvador:
• High urban population growth (3 x avg.) & poverty rates (56%),
slums, inequality, violence
• Tropical Cyclones: USD million 2.29 / 406 persons
• Floods: USD million 5.37 / 142 persons
• Landslides USD 2.4 million / 26 persons
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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23. Exposures (ECA I)
• 8 asset categories (residential building, hospital, school, street, etc.)
• High resolution monetary values & people counts
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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24. Hazard Sets (ECA II)
• Input data:
• Tropical Cyclones: Historic storm tracks
• Floods: elevation, water levels from hydraulic model
• Landslides: elevation, landslide inventory, soil properties
• Probabilistic Simulations
• Output Data: Hazard Sets
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final ReportApril 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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25. Hazard Sets (ECA II)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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26. Hazard Sets (ECA II)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
25

27. Hazard Sets (ECA II)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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28. Scenarios (ECA II)
• Time horizon: until 2040
• Climate: IPCC RCPs (4.5 & 8.5)
• Tropical Cyclone frequency ↑ 2-4%
• Flood height ↑ 4-10%
• Landslide frequency ↑ 1-2%
• Socio-economic
• Population ↑ 0.2% / year
• Economic Growth 2% / year
Knutti and Sedlácek (2013)
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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29. Damage Calculations (ECA II)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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30. Result of ECA II: Total Risk (People)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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AnnuallyexpectedFatalities
(People)
195
Risk
today
(142)
Total
Future
risk
(195)
Climate
Change
Socio-
econ.
develop
ment
3
45

31. Result of ECA II: Total Risk (Assets)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
30
Future
Risk
(2040)
16 M
1.5 M
9.5 M
Socio-
econ.
develop
ment
Risk
today
5.5 M
Annuallyexpecteddamage
Climate
Change

32. Adaptation Measures (ECA III)
• Identification
• Stakeholder discussions
• List  Ecologic Restoration, Drainage, Urban Planning, Earthwork (>100!)
• Parametrization: Ecologic Restoration (example)
• Reduction of Flood Hazard Intensity: -20 m3/s
• Implementation Cost: USD 4’606 / hectare
(2 million US$ total)
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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33. Results of ECA III: Option Appraisal (example)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America,
El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
32

34. Results of ECA III: Option Appraisal (all in one)
GFA Consulting: Climate Change Adaptation in Urban Areas in Central America, El Salvador Vulnerability Analysis + ECA Final Report
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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total climate risk until 2040
Ecologicrestoration(46)
total cumulative averted damage (million)

35. Conclusion
• Most of the selected measures are cost-efficient
• All measures combined are not enough to mitigate total climate risk
• Efficient measures for mitigating asset damage are also efficient in
reducing affected persons
• There is a high spatial variability of benefits between different
measures
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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36. Discussion
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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37. What alternatives exist?
• GIZ Input to give discussion background
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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38. When is an ECA study useful?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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In what do you as decision makers, policy makers, practitioners see the
utility of such approaches? Could you use an ECA study?
What kind of information do you need, in what format, concreteness,
etc.?
What are drawbacks? Where do you see difficulties / limits? Feasibility in
your setting?
What are alternatives according to your experiences?

39. When is an ECA study useful?
1) What is the potential climate-related damage over the coming
decades?
2) How much of that damage can be averted, using what type of CCA
measures?
3) What investments will be required to fund those measures - and will
the benefits of these investments outweigh the costs?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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40. Project characteristics according to project type, including indicative budget (indicative values, € ~ 150’000)
From: Materials on Development Financing: Economics of Climate Adaptation (ECA) - Guidebook for Practitioners,
KfW Development Bank
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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41. How can ECA support NAP planning?
• GIZ Input to give discussion background
• What are your experiences with NAP / NDC / National adaptation
strategy plannings?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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42. How can ECA support NAP planning?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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43. Questions about ECA studies or GIZ input?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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44. Concrete Starting Points?
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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What collaboration possibilities do you see?
Which kind of local institutions would be involved?
Where would you start?

45. References & Contact
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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46. Pictures
p.7 Reuters; Esteban Biba/EPA
p. 8 UNHCR
p. 14 Mariusz Lluzniak / Flickr; Tim Marshall/Researchgate;
p. 20 Britannica
p. 27 Martha Pskowski / Mongabay
Literature
• Souvignet, M.; Wieneke, F.; Mueller, L.; Bresch, D.N.: Materials on Development Financing:
Economics of Climate Adaptation (ECA) - Guidebook for Practitioners, KfW Development Bank
(2016)
• GFA Consulting; Climate Change Adaptation in Urban Areas in Central America, El Salvador,
Vulnerability Analysis + ECA Final Report (2016)
• CLIMADA platform: https://github.com/CLIMADA-project/climada_python
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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47. Head of Weather & Climate Risks (WCR) Group
Prof. Dr. David N. Bresch
dbresch@ethz.ch
Research Assistant, WCR Group
Evelyn Mühlhofer
evelyn.muehlhofer@usys.ethz.ch
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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48. Mon, April 8, 16:00 – Parallel Session 2.2
Introduction to Quantitative Climate Risk Analysis and Adaptation Option Appraisal
Mon, April 8, 18:00 - Keynote 3
Open-source Adaptation: Shaping Climate-resilient Development
Tue, April 9, Tuesday 17:30-18:30 - GCF support for the implementation of adaptation action,
Climate information and early warning systems
ECA - Fostering climate-resilient development through metrics for adaptation finance and
economic appraisal of adaptation options
Wed, April 10, 16:00 Cyber Hour – Session 6.1
CLIMADA: an open-source and -access global probabilistic risk modelling and
adaptation economics platform. Model demonstration.
Thu, April 11, 16:00-17:30 GCG TEM-A – Sectoral Round Tables
Discussion Session
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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Further inputs on risk analysis, adaptation option appraisal and
the underlying modelling platform, CLIMADA:

49. Back-up
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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50. What skills & data are required?
Level of skills needed by field
of expertise
From: Materials on
Development Financing:
Economics of Climate
Adaptation (ECA) -
Guidebook for Practitioners,
KfW Development Bank
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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51. Screen Shot 2019-03-28 at 14.50.27
impact
intensity
CLIMADA
probabilistic
event-based
simulation
vulnerability
exposure
hazard
resilience measures
outputs:
Risk analysis
Risk mapping
Early Warning
Economic appraisal of
measures
Quantification of
uncertainty
CLIMADA: Components

52. Uncertainty, Development, Climate Change
April 8, 2019
Risk Analysis & Adaptation Option Appraisal. Evelyn Mühlhofer,
WCR Group, ETH Zürich
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53. CLIMADA
vulnerability
exposure
weather
 hazard
development
scenarios
climate scenarios
Impact-response
relationships
CLIMADA: Uncertainty, Development, Climate
Change
resilience measures
parameters