Evaluating the robustness of project performance under deep uncertainty of climate change: A case study of irrigation development in Kenya

Abstract

Infrastructure projects in developing countries can have conventional development objectives such as economic growth or those of climate change adaptation. While some projects can serve both types of purposes, the conventional benefits are often more clearly appreciated than the latter. But a clear identification of the climate change implications of a project is also important. Such distinction would help associate climate finance with climate benefits directly. However, at present, no established evaluation methods for adaptation benefits exist as it necessitates the representation of uncertainties of climate change effects in a specific project context, which is often difficult. Against this background, as a case study of the ex-ante evaluation of adaptation benefits under the uncertainty of climate change, we evaluate the robustness of the project performance of a Kenyan irrigation development project. Based on a simulation analysis carried out using the Robust Decision Making (RDM) approach, we assess the robustness of the positive expected outcomes of the project. We quantitatively identify that the development of irrigation facilities, especially when combined with the soft adaptation measures of farming practices, could bring about an increase of household income in the future under a large variety of conditions. These beneficial effects are partly a reflection of the reduced damage from climate change achieved by the project. We also discuss factors that could become relevant for the application of RDM-based project evaluation in the field of climate finance.