Strengths and limitations of satellite-derived soil moisture for drought risk financing

World Bank Group Contract No. 1267507

Period: May 2020 – December 2020 (8 months)
Partners: The consortium is leaded by TUWien (Austria) with the collaboration of IRPI CNR: Istituto di Ricerca per la Protezione Idrogeologica (Prime contractor)

Description: The global climate is changing, impacting organisms, ecosystems and human systems in multiple and complex ways. One way climate change impacts human systems is through its effect on food production and security. Climate change affects food production on different spatial and time scales: through modal climate changes leading to shifts in crops planted, through changing atmospheric conditions such as increased CO2 levels, through seasonal changes which lead for example to extended growing seasons in northern latitudes, and increasing extreme events such as floods, heatwaves and droughts. In terms of food production, droughts have been found to impact vegetation stronger than heatwaves. And as a result of climate change, the frequency and intensity of droughts has increased in much of Africa, driven by shifts in precipitation and increasing temperatures.
Many African developing countries are also more severely affected socio-economically by droughts due to the weaker economic base. Here, insurance programs, such as the World Bank Disaster Risk Financing and Insurance Program (DRFIP), play a crucial role in adapting to climate change and corresponding risks in developing countries. Disaster risk financing instruments, and especially parametric drought risk financing instruments, rely on drought risk indices for financial applications. For a useful, cost-efficient and sustainable drought risk financing instrument, reliability and performance of these drought risk indices is pivotal. The ambition of this consultancy is to support World Bank activities in the area of anticipatory and parametric climate risk financing with tailored data- and research-driven approaches applied to existing and promising new satellite-derived soil moisture and rainfall datasets that have so far not been considered for operational purposes. The activities will focus on two to three selected regions of interest in Senegal, Mozambique, Benin and/or Morocco.

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