FEATURE: How do we start putting a price on resilience?
This feature examines how a new framework, the Resilience Dividend Valuation Model (RDVM), aims to quantify the link between resilience-inspired investments and improved well-being. It was originally posted on Zilient and can be found here.
A new framework – the Resilience Dividend Valuation Model (RDVM) – aims to quantify “the link between resilience-inspired investments and improved well-being”, according to Sundaa Bridgett-Jones, senior associate director at the Rockefeller Foundation.
The model, released in early August, was developed in a partnership between the Foundation and the RAND Corporation.
This week Bridgett-Jones joined Craig Bond, senior economist at the RAND Corporation who co-authored a report on the model, and other experts in a webinar to discuss what the RDVM could mean for resilience work and how it could be implemented in the future.
Here are four takeaways from the conversation:
1. Start early
One of the best ways to test the new model is on projects that are in the planning process or about to get the green light, panelists said.
If people start chewing over the concepts in the RDVM framework early on, it “shifts the nature of projects and makes them more comprehensive”, said Mike Young, research chair in environmental and water policy at the University of Adelaide who has already used the model to develop a long-term water management plan in Diamond Valley, Nevada.
Employing the model from the outset of a project gets practitioners thinking about what data is needed to measure its resilience benefits, and how to collect that data, which will lead to a better understanding of the impacts, the experts said.
2. Expand to more projects
In RAND’s report, the model was applied to six case studies, but in half of those, a calculation of the resilience dividend was not possible, largely due to a lack of data. Environmental economist Bond said more information is needed to refine and expand the RDVM’s reach – and this will be generated as it is applied to more projects.
Over the past three decades, for example, researchers exploring the value of environmental public goods have taken data on their benefits from studies and transferred that “to new places”, Bond said. A similar approach could be adopted in deploying the RDVM in a range of different situations, he added.
3. Simplify to spread the word
While the new model is expected to spark interest among practitioners and shift the resilience conversation, making it more accessible is a necessary next step, experts said.
Bond suggested additional progress could be achieved via a simpler “spreadsheet” version, which would expand the circle of people who can use it to inform their decisions.
Impact investment advisor Evan Greenfield said simplification would also mean the model would reach more asset managers and other investors who could be catalysts to getting their partners to use the method, or at least conform to its standards.
“We all know that something that’s simplified and easy to use will be used,” he said. “Something that is more challenging and more technically skilled will take some time.”
4. Catalyze conversations
Rockefeller’s Bridgett-Jones described the RDVM as a “really important” first step towards making sense of the resilience dividend – the sum of benefits, over time, from a project investment based on resilience principles compared to one that is not.
Even if the specific language of the RDVM – such as “allocation mechanism” and “social capital” – may not always used, Bridgett-Jones argued the model is already creating a space for conversations about how systems need to change to strengthen resilience.
The framework can also improve data collection, and generate more informed decision-making between competing projects, she said.
Other practitioners and professionals, such as risk analysts, will hopefully pick up elements from the RDVM and incorporate them into their own models and programs, expanding resilience work into new areas, she added.
“There is a lot of opportunity here for us to learn more,” she told the discussion.
The full video of the webinar is available below:
Image credit: REUTERS/Beawiharta