Programme Title: Economics - Creating an Economically Resilient New Zealand (CERNZ)
Programme Leader: Dr Garry McDonald (Market Economics)
This toolbox programme aims to provide economic decision-support tools that enable New Zealand to more effectively and quickly transition to a nation resilient to natural hazards. These toolsets, which will be operate at multiple scales and for multiple stakeholders will:
Contribution to Challenge Mission: Provides state-of-the-art economic tools to drive resilience by enabling decision-makers to build better business and value cases for, and to assess the potential of, alternative resilience-building initiatives and pathways.
Vision MÄtauranga (âVMâ) outcome: Co-production of the resilience-based BCA framework will occur under the Rural priority research area in collaboration with the Valuing Resilience Initiatives work-stream and MÄtauranga toolbox. Specifically, MÄori businesses will assess alternative resilience-based BCA frameworks to assess farming, forestry and potentially treaty settlement investment options.
10-year outcome: By 2025 New Zealandâs âGDP at riskâ as reduced further through resilience-building initiatives. Aggregate measures from multi-capital frameworks, which provide a holistic assessment of resilience, are more widely adopted and utilised. Resilience measures are now mainstreamed in public and private infrastructure Benefit Cost Analyses.
5-year outcome: By 2020 New Zealandâs âGDP at riskâ is reduced through resilience-building initiatives. The âGDP at riskâ measure will be assessed for various events, adaptations, mitigations and so on relative to a carefully constructed counterfactual.
Specific Projects within Programme
1. Enabling Pathways to Resilience. This project aims to create the first ever interface between the Multi-hazard toolbox developed in the Resilience challenge and existing tools: Riskscape and MERIT (Measuring the Economics of Resilient Infrastructure Tool) to enable the rapid assessment of economic consequences of resilience-building strategies to be assessed through time and across space.
2. Valuing Resilience Initiatives. This project will design and test a modified benefit-cost analysis (BCA) framework to enable better business case development in the context of resilience to natural hazard in a range of New Zealand organisational contexts.
3. Motivating Resilience. This project aims to propose a toolkit of best practice risk-sharing and alternative financial interventions. It will expand the empirical evidence base for risk-transfer/financial mechanisms towards resilience, and draw on the emerging field of behavioural economics, which seeks to understand the systematic biases, heuristics and market failures underpinning inefficient behaviour.