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Uncertainty and Environmental Decision Making pp 127–153Cite as

Coping with Climate Risks in Indonesian Rice Agriculture: A Policy Perspective

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Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 138))

Abstract

Policymakers responsible for agriculture, rural economic growth, and food security worldwide are confronted by a myriad of climate-related risks. This chapter provides a framework for using climate information in the design of policy to manage such risks, highlighting several tools of analysis that can be applied in the context of both climate variability and global climate change. The concepts are developed through a case study of the rice sector in Indonesia, a country directly affected by climate variability related to El Niño-Southern Oscillation events. The risk assessment model is based on the probability of climate events, critical thresholds of damage related to those events, and the role of policy in reducing climate-related impacts on agricultural systems. Because risk assessment involves estimation of both the probability of climate events and the expected consequences of those climate events, Bayesian analysis is applied to show how climate information can be used to update subjective probabilities over short and long time scales. Bayesian updating can help reduce the chances that policymakers will make the wrong policy decision given all of the available information. Even with these tools, however, the chapter shows that there is always the chance for Type I and Type II errors in policymaking, because the climate system is impossible to predict with certainty.

William Wrigley Senior Fellow and Director of the Program on Food Security and the Environment, and Research Associate at the Woods Institute for the Environment, Stanford University. Their work draws on substantial research collaborations over time with Walter Falcon, David Battisti, Dan Vimont, and Marshall Burke. The authors thank these scholars and Kate Niemer Johnson for their helpful comments and assistance on this chapter. The work was funded by the NSF Human and Social Dynamics Program, award 0433679.

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Author information

Authors and Affiliations

  1. Environmental Earth Systems Science Dept; Associate Professor of Economics, Stanford University, Stanford, CA, 94305, USA

    Rosamond L. Naylor (Director of FSE; Professor)

  2. Woods Institute for the Environment, Stanford University, 473 Via Ortega, Stanford, CA, 94305, USA

    Michael D. Mastrandrea

Authors
  1. Rosamond L. Naylor
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  2. Michael D. Mastrandrea
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Editor information

Editors and Affiliations

  1. ISST, University of South Australia, Mawson Lakes, 5095, Australia

    Jerzy A. Filar

  2. ORDECSYS / C-ORDEE, Place de L'Etrier 4, Chene-Bougeries, 1224, Switzerland

    Alain Haurie

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© 2009 Springer Science+Business Media, LLC

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Naylor, R.L., Mastrandrea, M.D. (2009). Coping with Climate Risks in Indonesian Rice Agriculture: A Policy Perspective. In: Filar, J., Haurie, A. (eds) Uncertainty and Environmental Decision Making. International Series in Operations Research & Management Science, vol 138. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-1129-2_4

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