ROLE, CHALLENGES & OPPORTUNITIES for NMHS in SERVICING RISK TRANSFER MARKETS

1. ROLE, CHALLENGES & OPPORTUNITIES for NMHS in SERVICING RISK TRANSFER MARKETS Dr William Wright Team Leader ET1.2 - Expert Team on Observing requirements and standards for climate, National Climate Centre, Bureau of Meteorology, 700 Collins St, Melbourne 3001 Australia. Ph: (61 3) 9669 4457 e-mail: w.wright@bom.gov.au

2. OPPORTUNITIES • Development of weather derivatives sector. • Climate forecasting: potential in Australia and Pacific for savings of many millions of dollars, and lives and livelihoods. • Well-developed capacity in Australia. Has been eagerly embraced by the agricultural industry, and predictions sought after by Government decision-makers. • The Australian aid agency AusAID is funding ABoM to extend this capacity to Pacific small island developing states.

3. OPPORTUNITIES (Cont’d) • Major products in Australia are: - seasonal predictions; - forecasts & warnings; - improved knowledge about underlying climate variability influences; - historical data; - climatologies; - gridded analyses; - geospatially-enabled products; - online, real-time access to many products • The Australian Bureau, and others, also monitor climate change (CC), and issue and interpret CC scenarios (fundamental climate variables, extremes, sea-level rise) • Underpinning all these services is a need for good, reliable, long-term climate data.

4. Disaster mitigation – other requirements • Risk Assessment requires databases and maps of hazards • WMO (2004) recommends: - comprehensive assessment of impacts; - integrated data management system for data specific to certain hazard types. - use best available technology (Internet & GIS) - free and unlimited access to databases - utilise international and regional programs to enhance collaboration and cooperation - individual countries should develop policies that emphasis preparedness over insurance, insurance over relief, and relief over regulation.

5. CHALLENGES • Simply being able to predict disasters doesn’t mean all loss can be avoided! • Uncertainty as to future impact of climate change (esp of extremes, & especially at Regional scale) • Good services need good data – major challenges in this area • NMHS not adequately resourced to provide stewardship of data

6. Observational quality • WMO imposes uniform standards – but not all countries follow them. • Automatic Weather Stations (AWSs) – can adversely affect climate record, esp if not well implemented. • Maintenance problems – esp. in developing countries • Quality control – inconsistent if done at all.

7. Data availability can be a problem… • In many countries, data remains relatively inaccessible in hard copy format • Inappropriate data management – need sound systems, software, interoperability • Data should be exchanged internationally – but often isn’t. • Training needs: observations; analysis and interpretation; communications

8. Summary of the data issue NMHS ability to provide services depends on: Data, plusunderstanding and knowledge of weather and climate, which depends on Good data and information collection and management systems, which Is often a challenge,especially in developing countries

9. RECOMMENDATIONS • Need for adequacy in observing networks and to ensure sustainability over time; • Need for systematic data rescue programmes/data management systems; • Need to leverage regional and international cooperation to facilitate observing capacities and service provision “Governments need to realize that investment in these capacities is an investment towards their socio-economic development" • NMHSs need systematic interface with users to understand their needs and requirements, and develop basic products that address these needs • Need for awareness-raising among insurance/reinsurance companies, NMHSs, agricultural, finance and development ministries who need to participate in developing these markets