THORPEX AND ITS LINKAGES WITH SOCIO-ECONOMIC ISSUES IN AFRICA

1. THORPEX AND ITS LINKAGES WITH SOCIO-ECONOMIC ISSUES IN AFRICA BY KWABENA A. ANAMAN ASSOCIATE PROFESSOR OF ECONOMICS, INSTITUTE OF STATISTICAL, SOCIAL AND ECONOMIC RESEARCH (ISSER), UNIVERSITY OF GHANA,LEGON, ACCRA, GHANA. May 2012 * Paper Presented at the AFRICA REGIONAL COMMITTEE MEETING OF THE WORLD WEATHER RESEARCH PROGRAMME – THORPEX, GENEVA, SWITZERLAND, 8-10 MAY 2012.

2. Introduction • THORPEX seeks to accelerate the improvement on the accuracy of one-day to two-week high impact weather forecasts for the benefit of society. • Weather information to the public in the form of general weather forecasts and warnings of severe weather events is recognised as an important function of governments worldwide. • However public weather services are not adequately funded by many African Governments often because their benefits have not been properly valued in economic terms.

3. Introduction cont’d • The production of improved weather forecasts, products and services is meant for use by the public at large and various economic sectors of a country. For Africa, the uses include the following: • General public use of weather information as a consumption good for day-to-day living and as safety information related to the prevention and management of hazards such as fires and floods. • Aviation use for weather forecasts during flights such as upper atmosphere forecasts and for landing such as the terminal aerodrome forecasts • Marine transport for long distance ocean travelling • National emergency service • Agriculture including forecasts for fisheries activities around rivers and seas • Construction industry relating to scheduling of weather-sensitive activities • Management of retail stores for scheduling of sales of weather-sensitive goods • Water management related to the supply and distribution of treated water in towns and cities • Hydroelectricity generation for residential consumers and businesses co • Planning of entertainment and outdoor events including sports activities • Military planning

4. Meteorological Data, Information and Services as Economic Resources • Meteorological data, information and services are economic resources which require money, materials and time to produce and these must have economic benefits to society for their sustained production. Dataare facts or figures often derived from direct observations. Data tend to be raw pieces of facts and figures. When data are processed or transformed into forms useful to people they become enhanced data and/or information. Information is also sometimes defined as knowledge communicated or received concerning some circumstance or event implying that information involve both transformation and communication of data from one source to another. The supply of meteorological information and data in forms demanded by customers is a provision of a service. Meteorological services such as public weather forecasts and warnings are used by households as consumption goods since the public weather services provide personal convenience to individuals for their day-to-day living. Meteorological services are also used as inputs in the production processes of business firms and organisations

5. Classification of Economic Resources • In order to value and establish the benefits of meteorological services, it is important to classify them into relevant group of economic resources that allow their valuation. • Economic classification of environmental resources such as meteorological data, information and resources is best done using the concepts of indivisibility and non-exclusiveness. A good or service is indivisible (or non-rival) if its consumption by an individual does not reduce its availability in terms of quantity or quality to others. A good is non-exclusive (or excludable) if individuals cannot be excluded or it is difficult to exclude individuals from using it. Exclusiveness is achieved through charging of fees or setting up of direct barriers and/or high entry hurdles or non-provision of information about the availability of the good so some individuals cannot consume it because of ignorance of its availability. Based on the concepts of indivisibility and non-exclusiveness, services produced by National Meteorological Services can be classified into four main groups. • indivisible (non-rival) and non-excludable goods such as basic public weather services and tropical cyclone warning service which are freely accessible to all individuals through the mass media. • indivisible (non-rival) and excludable goods such as specialised exclusive services for certain producers such as Weather-by-Fax Services in Australia • divisible (rival) and non-excludable goods such as services dealing with recording of certain extreme meteorological events for which the number of weather stations recording these events may be declining over time • divisible (rival) and excludable goods such as specialist services supplied for exclusive use by selected companies which pay commercial market-based rates for those services

6. Desirable Attributes of Meteorological Information and Services • Relevance Meteorological information that is relevant meets the needs of users. Users will only acquire information that is relevant. Relevancy of meteorological information is its most important attribute. Because of the many uses of meteorological information, National Weather Agency produces different types of information for different groups of producers and consumers. • Ease of Understanding Meteorological information must be provided in a form that can be understood by end users such as producers. Such information is provided often in the language of local producers and in a format that can be understood and interpreted by users. Meteorological information that is not easily understood will likely be regarded as irrelevant. However not all information that are easy understood by producers would be regarded as relevant.

7. Desirable Attributes of Meteorological Information and Services Cont`d • Desired Level of Aggregation or Detail The level of desired aggregation or detail of useful data contained in an information signal required by users varies from individual to individual and the purposes the information will be used for. For example, some producers may sometimes only require forecasts about whether it will rain or not for harvesting decisions • Impartiality Perceptions of impartiality of information relate to the degree of trust between the weather information provider and its users regarding whether the information being supplied has the level of quality based on verbal and/or written agreements between the producer and users. Asymmetric market information exists because meteorological information providers (sellers) of weather information tend to know the quality of their products more than the buyers (users).

8. Desirable Attributes of Meteorological Information and Services Cont`d • Convenience Convenience is an ideal attribute of information desired by users. The convenience of information to users involves the ease of access to the information by users and also the ease with which the acquired information can be used. Information which users can acquire inexpensively for their decision making processes can be classified as relatively convenient • Timeliness The attribute of timeliness implies that the information is supplied at the right time required by users. This attribute is indeed a very important one since information supplied at wrong times may be worthless. • Accuracy Accuracy is a perennial issue in weather forecasting and provision of meteorological services. Accurate information is desired by producers because it reduces the chances of errors in decision making.

9. Table 1: Users' Quantitative Assessment of the Quality of Two Meteorological Services Produced by the Australian Bureau of Meteorology in Terms of the Average Ranking of Various Quality Attributes of Information and Corresponding Benefit-Cost Ratios of Services

10. Linkages with Social and Economic Issues in Africa • Thorpex aims to improve the production of weather forecasts, products and services for use by society as both consumption goods and as inputs to produce outputs of businesses and organisations. • In terms of policy implications and socioeconomic linkages, four economic concepts are relevant to the production and distribution of THORPEX goods and services in Africa. • These four concepts are (1)economic efficiency of production and distribution (2) equity (3) externalities from the production of the goods and services and (4) transactions costs involved in the distribution of the products and services.

11. Linkages with Social and Economic Issues in Africa Cont’d • Economic Efficiency- refers to the case where the total willingness to pay is greater than the actual cost of production of public weather service. Willingness-to-pay for public weather services is often estimated by the contingent valuation method or the more advanced choice modelling approach. • Equity- refers to where the products and services provided are accessible to the general public at large irrespective of socio-economic status. Retirees and those living in vulnerable areas who may not be capable of paying for the use of public weather services bring out the important point of equity issue in the distribution of meteorological services to the public at large. • Externality- refers to a situation where an economic agent’s use of weather information affects the other agents especially the general public. For instance, property owners taking disaster avoidance measures to reduce the level of property damage during natural disasters relieves the Government and society at large of disaster assistance payments and costs. • Transaction Cost- deals with the actual cost of collecting fees from the public for the use of public goods and the related costs involved in making weather service exclusive to selected people who are willing to pay to have the service. The government tax system is often used to finance public weather services because of the large costs that will be involved in actually collecting fees from individuals for use of public weather services given the large externalities of these services.

12. Concluding Remarks • Accelerating improvements of weather forecasts, products and services envisaged by THORPEX involves increase in societal costs. • There is the need to establish the societal benefits of meteorological services in Africa to establish the viability of these services as information to taxpayers and the public at large. • WWR should fund a limited number of studies on economic benefits of meteorological services in various African countries as part of the THORPEX research project.

13. Thank you Merci