A Cost-benefit Analysis of Environmental Management and Disaster Risk Reduction in Malawi – Technical Report

Malawi has faced continual and compounding disasters over the last few decades, with The Intergovernmental Panel for Climate Change’s (IPCC) Fifth Assessment Report (AR5) identifying the country at high risk to the adverse effects of climate change. Malawi’s high level of vulnerability can further be attributed to other geo-climatic factors such as the influence of El Niño and La Niña phenomena on climate variability along with the variability in water levels in the country’s three major lakes. Other contributing factors which add to its susceptibility to disasters include rapid population growth, poverty, unsustainable urbanization, climate variability and change, and environmental degradation. The wide variety of natural hazards that the country is exposed to includes floods, strong winds, dry spells, cyclones, earthquakes, and landslides. The impacts of the extreme weather events have been substantial – hindering people’s lives, livelihoods, the country’s economy and damaging infrastructure. The floods of 2015 resulted in losses estimated at US $335 million, while the drought that followed in 2016 resulted in an estimated loss of US $365 million, severely impacting the Malawian economy and increasing the poverty rate by almost one percentage point. (World Bank, 2018). In 2019, physical damage to the country was estimated at US$ 220 million as a result of Cyclone Idai. This paper conducts cost-benefit analyses on two interventions that sector experts in the country noted are critical to improving Malawi’s resilience to the two main disasters (namely floods and drought) that befall the country: Early Warning Systems (EWS) Improvements and expanding the use of climate smart agriculture practices to address drought and flood.