SOAS Research Online

Abstract

Highlights ▪ The triple dividend of resilience (TDR) is an approach that considers avoided losses (first dividend), induced economic or development benefits (second dividend), and additional social and environmental benefits (third dividend) of adaptation actions. The second and third dividends are especially important since they accrue regardless of whether the actual climate risk materializes. ▪ The second and third dividends are often highly significant. They can exceed the value of avoided losses and can generate project benefit-cost ratios (BCRs) greater than 1 even when the value of avoided losses is not considered. ▪ Accounting for the full range of benefits demonstrates higher BCRs for adaptation investments than are often assumed. In turn, this can help increase access to project finance, improve project design, and improve ex post monitoring and evaluation. ▪ Researchers and practitioners are developing more effective appraisal tools for analyzing the benefits of climate resilience investments and are generating more information useful in decision-making. ▪ Investors in the public sector stand to benefit from increased use of the TDR by having more consistent and comparable assessments across sectors and donors. The private sector stands to benefit by better understanding both second dividend financial benefits and third dividend nonmarket benefits that flow from investing in resilience.