Resilience Dividend Valuation Model: Framework Development and Initial Case Studies

This paper summarizes a framework developed by the RAND Corporation and the Rockefeller Foundation for valuing the benefits of an adaptation intervention. The framework is meant to allow practitioners to compare options and assess the value of policies more comprehensively than is possible using indices or scorecards. The paper outlines the technical elements of the “Resilience Dividend Valuation Model (RDVM)” and concludes with examples of how the model was applied in Bangladesh, Nepal, Pakistan, Vietnam, and the United States.

The “resilience dividend” is the term the authors use to describe the benefits of an adaptation intervention compared to if no intervention had been implemented. It includes the “net benefits associated with the absorption of shocks and stressors, the recovery path following a shock, and any co-benefits that accrue from a project even in the absence of a shock.” In other words, the resilience dividend includes cost savings and benefits during the recovery and rebuilding period following shocks such as natural disasters or long-term stressors such as droughts. It also includes other benefits that resilience projects might bring, such as improvements to public health or economic development.

Chapter three describes the inputs into the RDVM. These include:

  • Capital Stocks - which are natural, human, or social resources;
  • Goods and Services - such as agricultural outputs that are expected to change because of resilience projects;
  • Social Welfare Function - reflecting the social value of goods and services;
  • Shocks and Stressors - using simulation of an disruptive event if forecasting future risk;
  • Direct Benefits - from resilience interventions such as preventing wildfire damage;
  • Co-Benefits - such as increased trust in government; and
  • Costs of the projects.

The case studies provide an overview of the intervention being explored in each country and describe how the RDVM was applied.  For example, one of the two U.S. case studies looks at the water-strained Diamond Valley in Nevada and analyzes “the benefit (in terms of agricultural profits) of a gradual change in allowable water withdrawals over 30 years compared to a sudden curtailment in year 10.” The researchers find that there is a net public good to gradually reducing water and stabilizing groundwater levels. However, “a positive resilience dividend does not necessarily imply positive net benefits for all stakeholders” given that those who have held rights to water for longer periods of time will be impacted by the policy differently.

Other lessons identified in the research include:

  • Timing of an intervention can affect the quantitative and qualitative magnitude of the resilience dividend
  • A positive resilience dividend during a single disaster does not necessarily imply the same for all potential disasters. Similarly, finding no resilience dividend in a specific disaster does not necessarily imply the same for all potential disasters.
  • Changes in the flows of private goods and services to stakeholders depend on the actions of key players
  • The data needed to quantify the resilience dividend are extensive.

Publication Date: August 1, 2017

Resource Author(s):

  • Craig Bond
  • Aaron Strong
  • Nicholas Burger
  • Sarah Weilant
  • Uzaib Saya
  • Anita Chandra

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Resource Types:

  • Indicators
  • Modeling tool

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