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Triggering Early LP Costs for Drought using LEAP

Triggering Early LP Costs for Drought using LEAP. Joanna Syroka, Addis Ababa, Ethiopia 21 January 2008. CALCULATIONS (in LEAP). INPUT. OUTPUT. Challenge.

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Triggering Early LP Costs for Drought using LEAP

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  1. Triggering Early LP Costs for Drought using LEAP Joanna Syroka, Addis Ababa, Ethiopia 21 January 2008

  2. CALCULATIONS (in LEAP) INPUT OUTPUT Challenge • To create an objective index that can be used to trigger earlyLivelihood Protection costs to regions for PSNP and non-PSNP drought needs • Input Data: • LEAP water balance model calculations • Objective estimates of crop yield deviations due to water stress (and therefore rainfall) • Calculations: • A methodology that relates water balance calculations to beneficiary numbers per region • Fixed at the beginning of the season • Output Data: • LP Costs per region, varying only due to rainfall

  3. Approach • It must be simple, transparent and robust • To establish the calculation methodology we must compare LEAP water balance output to historical beneficiary numbers • The final index should be able to target both PSNP and non-PSNP weredas, therefore wereda-level data needed: • LEAP water balance output specified for locally grown, dominant crops, WBIwereda • E.g. adjusted for local varieties, soil type etc. • Take into account Belg and Meher yields where appropriate • 1995-2007 • Historical DPPA data • 1994-2004: Total Emergency Beneficiary Numbers • 2005-2007: PSNP + Emergency Beneficiary Numbers • Output data is only as good as inputs used!!

  4. Calculation Methodology • A simple linear regression to relate a historical Regional Drought Index (Y, independent variable) to a Regional Total Beneficiary Estimate (N, dependent variable), i.e. N = a * Y + b • The intercept and slope, b and a, are estimated by the intercept and slope of the least-squares regression line • Historical Y values against historical DPPA data per region (adjusted for population growth), for 1995-2006 rainfall seasons • N gives the estimated total number of beneficiaries (chronic + transient) in the region • Benefits: Confidence bands can be statistically calculated; least amount of assumptions about underlying data

  5. N = a * Y + b N Y

  6. Regional Drought Index, Y • LEAP water balance output for each wereda is weighted by relative wererda vulnerability and aggregates over the region • “Yield” variations in most vulnerable weredas contribute most to the regional drought index • Vulnerability defined in terms of the wereda’s relative vulnerable population of the region • Y = (Σwereda WBIwereda *ARPwereda )/ARPregion • WBIwereda : • Water balance output specified crop(s) in wereda • ARPwereda : • At-Risk Population in Wereda = Historical Maximum Ever Population in Need in Wereda (i.e. PSNP + Emergency for 2005-2007) • ARPregion : • At-Risk Population in Region = Σwereda (ARPwereda)

  7. At-Risk Pop Region & Weredas 1. 10,000 2 2. 15,000 1 3. 10,000 3 4 4. 8,000 5 5. 10,000 6 7 6. 1,500 8 7. 1,000 8. 0 40% 70% 90% 60% WBIwer Ave = 63% Y = 29550 / 55500 = 53% for this season

  8. Regional LP Cost Estimate • If the Regional Total Beneficiary Estimate, Nfor a givenYinput value is > Total Number of PSNP Beneficiaries, PSNP, in the region: • It is assumed that additional assistance is needed by the region to deal with the increased number of beneficiaries and needs • Reg LP Cost Estimate = max(0, N - PSNP)*C • C is the Cost per Additional Beneficiary (e.g. $34) to estimate the additional funding costs needed by the region in such as scenario • Confidence Bands can be calculated by using the Standard Error (SE) in N, i.e. • i.e. N –/+ *SE • Where  specifies the desired confidence level • If not, the PSNP is assumed to be able to take care of all drought-related needs within the region.

  9. Limitations of Approach • As for all methods, only as good as the input data used: • “GIGO: Garbage in garbage out” • Assumes a linear response between drought stress on yields and early LP costs • Transparent, but the most “accurate”? • Uses data from 1995-2007 to establish the calculation parameters a and b • How will extreme drought events, like 2002, look like in a PSNP world? • Will the response (a and b) be the same? • Ongoing process, needs to be continuously refined and improved • Focuses on drought risk only • Not flood, price, pest, “green famine”, civil unrest etc.

  10. Triggering Early LP Costs for Drought using LEAP:Preliminary Results for 1996-2007

  11. Inputs Used • To establish a and b: • WBIwereda: LEAP water balance output specified for either maize, sorghum or rangeland • Taking into account Belg and Meher where appropriate • 1995-2006, using NOAA rainfall satellite data • Historical DPPA data, adjusted for population growth (2.9% per year) • 1996-2004: Total Emergency Beneficiary Numbers • 2005-2007: PSNP + Emergency Beneficiary Numbers • To calculate early LP costs: • PSNP population per region • C, Cost per Additional Beneficiary = $34

  12. 2004 2002 PSNP < 55 Tigray Region Correlation: 57%

  13. PSNP: 2.5 mil Amhara Region Correlation: 60% No Historical Triggered Payouts

  14. 2002 2003 PSNP < 73 Oromia Region Correlation: 56%

  15. 1999 PSNP SNNPR Region Correlation: 64%

  16. 2002 PSNP < 35 Afar Region Correlation: 65%

  17. PSNP Total Beneficiaries for All Regions (minus Gambella and B-Gumuz) Correlation: 85%

  18. Historical Early LP Costs for PSNP Regionsi.e. N > PSNP per Region

  19. $25 Million Contingent Grant Historical Early LP Costs for PSNP Regionsi.e. N > PSNP per Region

  20. Historical Early LP Costs for All Regions(minus Gambella and B-Gumuz)

  21. $25 Million Contingent Grant Historical Early LP Costs for All RegionsAssuming 20% PSNP Contingency

  22. Historical Early LP Costs for All RegionsAssuming Increasing PSNP Levels from 1996 to Capture Increasing Vulnerability

  23. Recommendations • LEAP can be used to index beneficiary numbers and therefore should be! • Works needed to improve the input data as much as possible: • Input LEAP water balance calculations • DPPA data • Model must be continually improved and refined as more data post 2005 becomes available and more verification work is done

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