WRI Publications Feed: Vulnerability and Adaptation: Institutions

Ready or Not: Assessing National Institutional Capacity for Climate Change Adaptation

Kevin Lustig — Wed, 22 Feb 2012 09:22:25 -0500

Executive Summary

Effective institutions are at the heart of our ability to respond to growing climate risks. Governments and other institutions at the national level can play a critical role in increasing society’s capacity to adjust and readjust (i.e., “adaptive capacity”) as conditions shift and as new climate change knowledge emerges.
As national policymakers, United Nations Framework Convention on Climate Change (UNFCCC) negotiators, international funders, and others develop methods and guidelines for adaptation planning, it is critical that they include a focus on building national institutions that can support ongoing adaptation.
The NAC framework provides a practical approach for understanding the institutional aspects of adaptive capacity. NAC assessments can support planning through the identification of specific gaps in capacity that can be filled through investment and action.
The NAC framework evaluates national institutions’ performance of five key functions critical to adaptation: assessment, prioritization, coordination, information management, and climate risk management. The NAC treats performance of these functions as an indication of a country’s overall adaptive capacity.
The pilot applications of the framework in Bolivia, Ireland, and Nepal suggest that the NAC framework is useful across a range of countries and that it can be tailored to specific country contexts. The pilots used the NAC framework in the following ways:
- As a tool for monitoring and baseline setting. The NAC assessment in Bolivia led to the development of country-specific indicators and metrics for use in adaptation policy.
- As a tool to catalyze action and fill key capacity gaps. The Irish NAC assessment identified gaps in capacity, helping to build an evidence base for targeting new research and development efforts. It also inspired the Irish Environmental Protection Agency to commission a national vulnerability assessment.
- As a tool to gather and synthesize resources. The NAC framework can provide a practical structure for organizing a diverse and often scattered body of adaptation-relevant information and resources. This proved particularly useful in Nepal and Bolivia.
The country teams that applied the NAC framework in Bolivia, Ireland, and Nepal used distinctly different approaches to completing their assessments and also formatted their findings differently. This indicates that the NAC framework can be tailored for use in a variety of different planning or evaluation processes.

Adapting for a Green Economy: Companies, Communities and Climate Change

Maggie Barron — Thu, 16 Jun 2011 13:54:43 -0400

A Caring for Climate report by the United Nations Global Compact, United Nations Environment Programme (UNEP), Oxfam, and World Resources Institute (WRI)

Executive Summary

Drawing on the results of a 2010 survey of corporate signatories to the United Nations Global Compact and the United Nations Environment Programme Caring for Climate initiative, as well as on existing literature, this report makes the business case for private sector adaptation to climate change in ways that build the resilience of vulnerable communities in developing countries. It then offers actions that companies and policymakers can pursue to catalyze and scale up private sector action on adaptation. It is ultimately the responsibility of the public sector to meet the critical climate change adaptation needs of the poor and vulnerable; thus private sector engagement cannot substitute for critically needed public investment and policies. However, private sector investment can serve as a pivotal part of a comprehensive governmentled approach to addressing climate impacts.

This report is a resource for companies with a national, regional or global reach that are interested in increasing their strategic focus on adaptation in developing countries where they have operations, supply chains, employees and current or potential customers.

While many companies are focused on climate change mitigation — slowing the rate of climate change through reduction of greenhouse gas emissions and other strategies — most have yet to develop strategies for dealing with the immediate to long-term consequences of climate change. This report is also aimed at national and international policymakers involved in climate change and sustainable development dialogues and decision-making, including those who will participate in the United Nations Conference on Sustainable Development in 2012 (Rio+20). It is hoped that the report’s findings will be useful for a much wider range of actors as well, including small, local businesses in developing countries that are on the front line of climate impacts; civil society organizations seeking to strengthen their work around climate change and sustainable development; and subnational policymakers, who are in a key position to shape a productive interface among government, communities and businesses.

Private Sector Adaptation, Sustainable Development and the Green Economy

The challenges that communities in developing countries face as a result of climate change — such as more frequent and intense storms, water scarcity, declining agricultural productivity and poor health — also pose serious challenges for businesses. Community risks are business risks. Both local and global companies depend on community members as suppliers, customers and employees. They also depend on local resources, services and infrastructure to be able to operate. It is difficult to separate community well-being from companies’ viability and, in turn, overall economic growth.

Businesses that make these connections and adapt to climate change with community needs in mind can gain a competitive edge. Businesses that respond to climate change in ways that undermine communities’ efforts to adapt may face reputational and brand risks, and they may even lose their ability to operate in certain locations. Through responsible, strategic approaches to addressing climate change risks and opportunities, in consultation with people in affected communities, companies can:

Avoid costs, manage liabilities and build resilience to climate change impacts by addressing climate risks throughout their operations and value chains, while at the same time increasing community resilience.
Expand market share and create wealth in communities by developing and deploying new products and services that help people adapt.
Access new opportunities to collaborate with the public sector, as developing country governments seek corporate partners who can effectively deliver goods and services that support high-priority climate change adaptation efforts.
Build corporate reputation and exercise good corporate citizenship by showing commitment to decreasing climate vulnerability and promoting long-term resilience in places where it is needed most.

Investment or other private sector actions taken to adapt to climate change can also have the benefit of promoting a transition to a “green economy”, which has been identified by governments as one of the anchoring themes of Rio+20. In its simplest expression, a green economy is one that is low-carbon, resource-efficient and socially inclusive. In a green economy, growth in income and employment can be generated by strategic public and private investments in developed and developing countries that reduce greenhouse gas (GHG) emissions, improve resource efficiency and prevent the loss of biodiversity and ecosystem services (that is, the benefits of nature to people). Businesses can accelerate the transition to a green economy by taking advantage of the natural synergies that exist between green economy initiatives and climate change adaptation opportunities. When businesses work with communities to restore mangrove forests as natural barriers against storms, or develop affordable drip irrigation equipment that can be used by small-scale farmers facing water scarcity, they are also greening the economy.

Business Perspectives and Action on Adaptation

The Caring for Climate survey revealed that 83 percent of 72 responding companies believe that climate change impacts pose a risk to their products or services. A slightly higher percentage of companies (86 percent) think that responding to climate change risks, or investing in adaptation solutions, poses a business opportunity for their company. Many Caring for Climate companies surveyed have employees and operations in developing countries, which are disproportionately vulnerable to climate change and have limited resources with which to adapt. Not only are companies that operate in, have markets in or source in developing countries exposed to risk, but they can also play a critical role in building climate resilience in these countries.

However, beyond planning for the most obvious or immediate threats — increasingly unreliable access to key inputs like water and energy, for example, or damage to assets from flooding — most companies are not yet taking concrete steps to address climate change risks and to respond to new opportunities in a comprehensive, integrated way.

There is not yet widespread understanding among Caring for Climate signatories of what climate adaptation is and what it means for them or for the markets they serve. Uncertainties about the location, magnitude, potential timing and consequences of climate change impacts make it risky for them to tackle adaptation on their own, and few good tools exist to help businesses assess climate risks and opportunities. The survey revealed that companies find it difficult to incorporate scientific climate change data, which typically cover a large geographic area and span a long-term time frame, into practical business decision-making, which tends to be shorterterm in nature and location-specific. Information about the full range of adaptation costs and benefits is often not available as an input to companies’ investment analyses. Companies may see few economic and policy incentives to make significant up-front investments that bolster long-term climate resilience, for the company and for communities that will be most affected by climate change impacts.

These factors can make it difficult for businesses to make adaptation a strategic priority. Even if key internal stakeholders have prioritized adaptation, it can be hard for them to find the capacity to consult and communicate with a wide range of key external stakeholders, including suppliers and customers. Few Caring for Climate signatories are engaging with suppliers around the issue of climate risk, and few are exploring how their customers’ needs may change as a result of climate change impacts, and what the corresponding business implications — and possible missed opportunities — may be of shifting demands and preferences. Companies also reported challenges in analyzing the connection between their own adaptation needs and community needs; only half of the companies that responded to the Caring for Climate survey said that they have recognized the possible social consequences (positive or negative) of their adaptation strategies. In the end, very few Caring for Climate signatories have been able to design comprehensive adaptation goals with corresponding business indicators to track economic performance and progress towards those goals.

Although business adaptation to climate change is clearly at a nascent stage, approximately one-third of companies surveyed reported having a strong emphasis on addressing climate risks, and about the same percentage reported a strong emphasis on responding to adaptation opportunities.

The survey revealed some emerging best practices in how companies are responding to complex climate change challenges and opportunities while contributing to sustainable development. This report provides several case studies that not only serve as models for other companies, but also provide evidence that private sector adaptation at the nexus of company needs and the needs of vulnerable communities in developing countries makes good business sense.

Strategic private sector adaptation to climate change must be a purposeful process: It will not happen by chance. Companies must prioritize adaptation and take action to address risks and pursue opportunities. Governments can assist companies to overcome barriers to investment and harness the resources and innovation of the private sector to contribute to the public good.

Practical Measures for Companies

Companies will find that addressing the impacts of climate change necessitates a departure from business as usual; traditional approaches are insufficient. Adaptation champions within the company will want to focus their colleagues’ attention on three key questions: 1) What does climate resilience mean for the company? 2) What will position the company to navigate risks and lead markets in a warming world? and 3) How will the company engage partners to minimize risks and seize opportunities? Effective, comprehensive responses to these questions will require companies to…

Connect climate “adaptation” and “resilience” to the company and corporate culture, building on existing mitigation initiatives.
Integrate climate adaptation into core strategic business planning processes.
Align business objectives with adaptation priorities.
Build a portfolio of climate-resilient goods and services.
Build mutually beneficial strategies with stakeholders; build communication channels.
Partner with internal and external decision-makers.

Practical Measures for Policymakers

Governments have a central role to play in catalyzing private sector provision of goods and services that support climate change adaptation and in encouraging climate-resilient business practices. Some public sector efforts to incentivize business contributions to adaptation must be developed and implemented through agreements at the international level. Policy focus at the national and local level, however, is essential, because adaptation challenges and solutions are specific to each locality, and business barriers and opportunities will be countryspecific. To create a facilitating environment for private sector investment in climate change adaptation, policymakers can…

Demonstrate policy and finance commitment to adaptation.
Engage businesses as stakeholders in planning and implementation.
Stimulate the market for adaptation through financial and risk-reduction incentives.
Develop policy and regulatory frameworks to guide corporate practices.
Provide businesses with the information and tools they need to make investments that support climate resilience in vulnerable communities.
Consider new forms of public-private partnerships to tackle the most complex challenges to sustainable development and climate resilience.

Conclusion

Addressing the adaptation needs of vulnerable communities at the scale that is necessary will require unprecedented levels of cooperation, collaboration and resource mobilization among governments, businesses, civil society groups and communities themselves. The private sector has much to contribute to the development and implementation of climate change adaptation solutions, including sectorspecific expertise, technology, significant levels of financing, efficiency and an entrepreneurial spirit. The key is to find the nexus of shared interest where business incentives align with communities’ adaptation needs. Companies that rigorously assess climate change risks and opportunities and implement creative solutions that build long-term resilience will create business value while making important contributions to sustainable development and equitable green growth.

Adaptation Planning Under a Copenhagen Agreement: Laying a Foundation for Projects, Policies, and Capacities that Countries Need

Tim Herzog — Mon, 23 Nov 2009 10:40:24 -0500

Enabling Adaptation: Priorities for Supporting the Rural Poor in a Changing Climate

Payson Schwin — Mon, 01 Jun 2009 17:15:38 -0400

Effective climate adaptation requires an enabling environment—one that grants the poor the rights, resources and access they need to sustain and benefit from ecosystems, governments and markets. Development experience provides important lessons for fostering such enabling environments, including principles of good governance that provide the rural poor with control of the ecosystems on which they depend.

Enabling Climate Adaptation
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The livelihoods of the rural poor are rooted in the productivity of ecosystems. Climate change, however, is already altering the functioning of these ecosystems in profound—and often negative—ways. Over 2 billion rural inhabitants live on less than $2 per day. Helping these people to build their assets and incomes will bolster their resilience and adaptive capacity, enabling them to meet the challenges of climate change and ecosystem degradation without sinking deeper into poverty. But how?

Effective climate adaptation requires an enabling environment—one that grants the poor the rights, resources and access they need to sustain and benefit from ecosystems, governments and markets. It begins with fair and equitable governance. Sound ecosystem management—whether at the watershed level, on a shared plot of forest land, or of a particular water body—can reduce the poor’s vulnerability to climate-related risks by creating economic opportunities that build livelihoods and increase resilience. Unfortunately, decades of development experience have shown that governance failures often rob the poor of effective control of the ecosystems on which they depend.

Key Investments to Enable Adaptation

Supporting pro-poor climate adaptation begins by giving primacy to enabling activities that grant the poor the rights, resources and access they need to sustain and benefi t from their ecosystem assets.

Priority areas for investment include:

A. Strengthen an enabling environment at the national level.

Promoting tenure reform for improved resource access and livelihood security.
Providing market access through regulatory reform to benefit small producers.
Decentralizing authority over natural resources to local levels.
Providing access to information.

B. Strengthen local institutions and good governance practices on the ground.

Promoting representative and fair natural resource management and use institutions at the local level.
Facilitating community participation, especially of vulnerable groups, in natural resource management.
Fostering local support organizations.
Communicating success stories.

C. Establish good governance metrics for adaptation.

Source: Adapted from World Resources 2008: Roots of Resilience.

Just as governance successes, such as Bangladesh’s cyclone management system or Guatemala’s community forestry program, can reduce vulnerabilities, governance failures stand as obstacles to climate adaptation, depriving the poor of the means and powers to benefit from improved management of natural resources (Batha 2008). Indeed, lack of resource rights and insufficient access to markets, finance, information, and technology are often greater determinants of vulnerability for the poor than climate change itself (Schipper 2007, Ribot 2009). As national and international policymakers turn their attention to climate change adaptation, they should keep in mind that constructing an enabling environment that minimizes these vulnerabilities will be central to any meaningful and lasting increase in the adaptive capacity of the rural poor.

Interest in climate change adaptation is mounting quickly among national governments and the international community as a comprehensive new international climate deal through the UN Framework Convention on Climate Change (UNFCCC), grows likely. However, most current adaptation efforts remain tentative and incremental, in part because the international community has yet to forge a commonly accepted model of what successful adaptation should look like, including clear goals and targets (Hedger et al. 2008:10, 14-15).

This brief seeks to help fill this gap. It is formulated in response to an increasingly urgent need for articulating and agreeing upon a vision of effective adaptation—in part to inform the architecture for financing climate adaptation. The paper argues that the poor, and in particular the resource-dependent rural poor, must be a central concern in any effective adaptation funding effort, and that one of the major pillars of an effective adaptation strategy is support for an enabling environment that allows them to build their resilience through natural resource management.

The first section proposes that good governance and fair, representative institutions are crucial to help the rural poor adapt effectively to climate change. The second half of the brief proposes specific governance investments that adaptation funding should support.