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Governments invest billions of dollars annually in long-term projects. Yet deep uncertainties pose formidable challenges to making near-term decisions that make long-term sense. Methods that identify robust decisions have been recommended for investment lending but are not widely used. This paper seeks to help bridge this gap and, with a demonstration, motivate and equip analysts better to manage uncertainty in investment decisions. The paper first reviews the economic analysis of ten World Bank projects. It finds that analysts seek to manage uncertainty but use traditional approaches that do not evaluate options over the full range of possible futures. Second, the paper applies a different approach, Robust Decision Making, to the economic analysis of a 2006 World Bank project, the Electricity Generation Rehabilitation and Restructuring Project, which sought to improve Turkey's energy security. The analysis shows that Robust Decision Making can help decision makers answer specific and useful questions: How do options perform across a wide range of potential future conditions? Under what specific conditions does the leading option fail to meet decision makers' goals? Are those conditions sufficiently likely that decision makers should choose a different option? Such knowledge informs rather than replaces decision makers' deliberations. It can help them systematically, rigorously, and transparently compare their options and select one that is robust. Moreover, the paper demonstrates that analysts can use the same data and models for Robust Decision Making as are typically used in economic analyses. Finally, the paper discusses the challenges in applying such methods and how they can be overcome.

Climate Change Economics --- Climate Change Mitigation and Green House Gases --- Debt Markets --- Decision Making Under Uncertainty --- Economic Analysis --- Energy --- Energy Production and Transportation --- Environment --- Finance and Financial Sector Development --- Long-Lived Infrastructure Investments --- Macroeconomics and Economic Growth --- Non Bank Financial Institutions --- Robust Decision Making

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Climate change and climate policies will affect poverty reduction efforts through direct and immediate impacts on the poor and by affecting factors that condition poverty reduction, such as economic growth. This paper explores this relation between climate change and policies and poverty outcomes by examining three questions: the (static) impact on poor people's livelihood and well-being; the impact on the risk for non-poor individuals to fall into poverty; and the impact on the ability of poor people to escape poverty. The paper proposes four channels that determine household consumption and through which households may escape or fall into poverty (prices, assets, productivity, and opportunities). It then discusses whether and how these channels are affected by climate change and climate policies, focusing on the exposure, vulnerability, and ability to adapt of the poor (and those vulnerable to poverty). It reviews the existing literature and offers three major conclusions. First, climate change is likely to represent a major obstacle to a sustained eradication of poverty. Second, climate policies are compatible with poverty reduction provided that (i) poverty concerns are carefully taken into account in their design and (ii) they are accompanied by the appropriate set of social policies. Third, climate change does not modify how poverty policies should be designed, but it creates greater needs and more urgency. The scale issue is explained by the fact that climate will cause more frequent and more severe shocks; the urgency, by the need to exploit the window of opportunity given to us before climate impacts are likely to substantially increase.

Climate Change --- Climate Change Economics --- Climate Change Mitigation and Green House Gases --- Climate Policies --- Development --- Environment --- Macroeconomics and Economic Growth --- Poverty --- Poverty Reduction --- Rural Poverty Reduction --- Safety Nets & Transfers --- Social Protection --- Social Protections and Labor --- Welfare

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This paper proposes a methodology to prioritize interventions in Peru's road network. A network model is built, linking the country's economic and population centers through indicative corridors, which are defined as the least-cost routes to connect origins to destinations. The network's critical links are identified by systematically simulating disruptions and calculating the costs associated with them. The network is then overlaid with natural hazard layers. The average annual losses associated with the hazard disruptions of the critical links are calculated in many scenarios, including climate change uncertainty and different impacts and reconstruction times. A robust decision-making approach is then used to select interventions that decrease hazard disruption costs.

Climate Change Resilience --- Network Analysis --- Robust Decision Making --- Transport Prioritization