World Resource Institute

Harnessing Current Government Practices to Plan for and Adapt to the Risks and Uncertainty Posed by Climate Change

By Darren Swanson, Dimple Roy, Sreeja Nair, Stephen Tyler, International Institute for Sustainable Development - Canada; The Energy and Resources Institute - India; Adaptive Resource Management Ltd - Canada


Question One: Does climate change require new approaches to making decisions? Is the way we currently plan for the future and react to unexpected change sufficient to accommodate the uncertainty, scale, long lead time, and complexity associated with climate impacts?


Responding to the fundamentally co-mingled challenges of climate change, energy scarcity and food security will be the defining challenge for this generation of policy-makers. They will need to create adaptive policies that anticipate risk and navigate future uncertainties. This can be achieved by following seven practices, including integrated and forward-looking analysis; built-in policy adjustment; formal policy review and continuous learning; promoting variation; multi-stakeholder deliberation; enabling self-organization and social networking; and decentralization of decision-making. Barriers to the implementation of these practices are also discussed.

Problem and Proposition

The International Institute for Sustainable Development (IISD) and The Energy and Resources Institute (TERI) were commissioned by the World Resources Institute to prepare this paper as input to the 2010 World Resources Report (WRR). The problem statement posed to us is as follows:

Are current decision-making practices used by governments able to incorporate the long-term nature, surprises, heightened change and variability, and the uncertainty of a changing climate, or does such decision making require an entirely new approach? If so, what needs to change, and why? If not, how should current practices be harnessed to plan for and react to climate risks today and in the future?"

We have recently completed a four-year policy research program investigating a similar question, culminating in our book entitled, "˜Creating Adaptive Policies: A Guide for Policy-making in an Uncertain World (Swanson and Bhadwal 2009)." With respect to the above problem statement and based on the conclusions of our research, our proposition is as follows:

IISD & TERI Proposition: Current government practices can be harnessed to plan for the socio-economic and ecological risks and uncertainties posed by climate change, but implementing the appropriate array of current practices to ensure that our public policies, plans and programmes are better able to anticipate risk and navigate the unforeseen will require a new appreciation by policy-makers for the value of adaptive policies in a complex and unpredictable world.

Our proposition is founded on an examination of policy cases from agriculture and water resources management within a context of weather uncertainty. From hundreds of interviews with farmers and water resource managers in Canada and India, we identified policies that have helped people and communities adapt to historic weather-related shocks and stresses. We found that such policies were fruitful ground for researching specific "˜adaptive' policy-making practices that anticipate risk and are better able to adapt to surprises. From over a dozen policy examples we unearthed many government practices that policymakers have employed to make policies adaptive. Informed by a comprehensive review of academic and professional insights on how to intervene effectively in complex adaptive systems in a range of sectors, we were able to group the practices we observed into seven categories.

This paper highlights seven practices for creating adaptive policies and discusses the main barriers to their implementation. Readers seeking more detail are referred to the book (Swanson and Bhadwal 2009).

Seven Practices for Creating Adaptive Policies

The seven policy-making practices that we observed which make policies more adaptive can be loosely categorized as: (a) planned adaptability - conscious effort to anticipate risk and uncertainty and identify immediate robust actions or actions that can be triggered at an appropriate time in the future; and/or (b) autonomous adaptability - a conscious effort to strengthen the ability of a policy to facilitate stakeholder responses to unforeseen events. The seven practices are listed in Table 1 along with featured case examples.

Planned Adaptability

This typology is the most intuitive to policy-makers. It deals with anticipating what lies ahead through analytic and deliberative processes and identifying robust and built-in policy adjustments that can be triggered at the appropriate time to increase the potential for achieving desired outcomes. Five of the practices we observed fall into this typology: (1) integrated and forward-looking analysis - the use of rapid scenario planning techniques to identify robust and triggerable policy adjustments; (2) built-in policy adjustments - either semi or fully automatic; (3) formal policy review - including the use of permanent policy pilots; (4) promoting variation - in complex adaptive systems, outcomes are hard to predict, so multiple and diverse solutions can foster innovation and success; and (5) multi-stakeholder deliberation - to leverage different perspectives and identify fundamental values in complex problem solving.

Autonomous Adaptability

This is new ground for most policy-makers. Autonomous adaptability is premised on the notion that a policy can be designed and implemented in such a way as to enable it to effectively respond to unforeseen events, events that could not have been anticipated even through careful analysis and deliberation. The policy response is mediated through the actions of stakeholders who are on the ground and feel the impacts of the surprise first. We observed several cases where this has been achieved through policy design. It was achieved through four practices: (4) promoting variation; (5) multi-stakeholder deliberation; (6) enabling self-organization - to make effective use of the social capital that exists in all policy settings to respond to unanticipated conditions; and (7) decentralization of decision-making - to bring authority for action closest to where action is taken and needed.

Each of these seven practices are already applied in practice in India and Canada, lending to our proposition that existing government practices can be harnessed to address the anticipated and unanticipated risks posed by stresses such as climate change. However these seven practices were, for the most part, used separately and in an ad hoc manner. [1]  For a policy to be truly adaptive to anticipated and unanticipated conditions, it should incorporate both planned and autonomous adaptability.

1. Seven Practices for Creating Adaptive Policies (Swanson and Bhadwal 2009)

Typology Seven Adaptive Policy Practices Featured Example
Planned Adaptability #1 Integrated and forward-looking analysis -By identifying key factors that affect policy performance and identifying scenarios for how these factors might evolve in the future, policies can be made robust to a range of anticipated conditions, and indicators developed to help trigger important policy adjustments when needed. Agriculture Price Policy in Punjab - The minimum support price for farmers is calculated using an integrated set of five cost factors including: cost of production; input prices; input/output price parity; price trends; and terms of trade.

St. Mary Irrigation District - This planning authority in Alberta, Canada used water supply scenarios to help establish a water sharing agreement among districts.

  #2 Built-in policy adjustment-Some of the inherent variability in socio-economic and ecological conditions can be anticipated, and monitoring of key indicators can help trigger important policy adjustments, both semi and fully-automatic, to keep the policy functioning well.

Weather indexed insurance in India - is linked to the underlying weather risk measured by an index based on historical climate data, rather than the extent of crop yield loss. These weather insurance contracts have been found to offer quick payouts triggered by independently monitored weather indices and result in improved recovery times from weather-related stress.

 

  #3 Formal policy review and continuous learning-Regular review, even when the policy is performing well, and the use of well-designed pilots throughout the life of the policy to test assumptions related to performance, can help address emerging issues and trigger important policy adjustments.

Weather indexed insurance in India - was implemented on a pilot basis for various crops and locations by trying out different types of delivery models. The implementing agencies in India reported that this pilot experience was valuable to better understand risk parameters and the potential for commercial expansion.

 

Autonomous Adaptability #4 Promoting variation-Given the complexity of most policy settings, implementing a variety of policies to address the same issue increases the likelihood of achieving desired outcomes. Diversity of responses also forms a common risk-management approach, facilitating the ability to perform efficiently in the face of unanticipated conditions.

Agriculture and Agri-Food Canada's Business Risk Management approach- A suite of four programmes were employed including AgriInvest for small-income declines; AgriStability providing support for large income losses; AgriRecovery for disasters; and AgriInsurance for special perils.

 

  #5 Multi-stakeholder deliberation-A collective and collaborative public effort to examine an issue from different points of view prior to taking a decision. Such deliberative processes strengthen policy design by building recognition of common values, shared commitment and emerging issues, and by providing a comprehensive understanding of causal relationships.

Maharashtra Management of Irrigation Systems by Farmers Act - Formation of Water Users Associations provided opportunities for deliberation around water use and new copping patterns. This played a significant role in the switch away from sugar cane to less water intensive vegetables and millet.

 

  #6 Enabling self-organization and social networking-Ensuring that policies do not undermine existing social capital; creating forums that enable social networking; facilitating the sharing of good practices and removing barriers to self-organization-all strengthen the ability of stakeholders to respond to unanticipated events in a variety of innovative ways.

Saskatchewan Soil Conservation Association - Made possible through federal government funding in Canada, the association enabled farmers to interact with researchers and with each other on best practices for zero tillage, and with industry on available technologies. Up to 40% growth in the use of zero tillage in the province was realized.

 

  #7 Decentralization of decision-making-Decentralizing the authority and responsibility for decision-making to the lowest effective and accountable unit of governance, whether existing or newly created, can increase the capacity of a policy to perform successfully when confronted with unforeseen events. Manitoba Conservation Districts) - tasked by the provincial government to manage soil and water conservation, these have developed solutions to issues that were not foreseen or mentioned in their mandates, attributable to their local boards being able to make their own decisions as to what issues to tackle and how to deal with them.



 

Barriers and Barrier-busters for Adaptive Approaches to Policy-making

In the course of our research and outreach on the seven adaptive policy practices we encountered many persons who provided valuable insight into the barriers for adaptive approaches to policy-making. Below are some of these barriers, followed by a brief discussion of how each can be overcome (the barrier-busters).

"The notion of experimentation is not politically acceptable"

One of the fundamentals of adaptive policy-making is the learn-by-doing philosophy. Once it is recognized that the policy issue is embedded in a complex adaptive system (as all sustainable development policy issues are), the outcome of a specific intervention cannot be predicted in advance. The term experimentation is often used to describe the adaptive management and adaptive policy approach, and this is seldom palatable to any politician or policy-maker.

The barrier buster in this regard is to not use the term experiment. A practical way forward is to frame all policy implementation as a continuous policy pilot. A review conducted by the Cabinet Office in the United Kingdom (2003) focused on the role of pilots in policymaking. The study noted that "an important innovation in recent years has been the phased introduction of major government policies or programmes, allowing them to be tested, evaluated, and adjusted where necessary, before being rolled out nationally". Policy pilots are used frequently in the United States owing in part to its federal structure, which in many instances has implemented and evaluated a policy within one state before being rolled out nationally. The change in mindset that needs to occur to create adaptive policies for complex, dynamic and uncertain policy settings is to necessarily treat all polices as being in a continual state of policy piloting, and to monitor, review, and adjust in a systematic manner as policy pilots are intended to do.

"It's not easy to let a thousand flowers bloom, and then pick the most beautiful one"

This comment was provided in the context of promoting variation in policy responses. The practice involves implementing multiple, smaller-scale interventions to achieve policy outcomes instead of a single large-scale solution. The barrier is that it is not politically nor fiscally feasible to simply try a bunch of policies to achieve a desired outcome, and then pick the best one. The barrier buster in this regard can again be the continuous policy pilot approach. In complex adaptive systems it is recognized that the system itself will determine what works and what does not.  So while a number of policies might be designed and piloted, only a few will survive the test of time and require medium or long-term support. Policy pilots can package a mix of policies, and through prudent and purposeful monitoring and review, the mix can be refined over time to include a smaller number of policies.

"Self-organization is self-organization, it can't be enabled"

This idea is always debated. However, most experts believe at the very least policies should be designed not to undermine existing social capital. There exist examples in the literature (e.g., Canada's Policy Research Initiative studied the use of social capital in public policy, both direct and indirect influence: PRI 2005), and examples we have observed first hand in our research, where programmes have been designed that provide the enabling conditions for self-organization to occur. The Saskatchewan Soil Conservation Association (SCCA) in Canada is a good example (see Table 1). The formation of the SCCA was made possible through federal government funding, and the association facilitated interaction between farmers and researchers and among farmers on best practices for zero tillage, and also with industry on available technologies, resulting in up to a 40% growth in the use of zero tillage.

"Making policies more flexible, and implementing mixes of polices, leaves them vulnerable to vested interest"

This is always a concern in policy-making, and a difficult one to bust. Experience in adaptive ecosystem management over the past few decades however, does provide some guidance. For example, Kai Lee in his account of the highly contested issue of salmon restoration and hydropower development in the Columbia River Basin the Pacific Northwest of the United States, describes the importance of creating an arena of bounded conflict (Lee 1993). In such contested settings, especially where common property resources are involved, it is important to help stakeholders see the differences between means and goals. Often one person's goal is actually a means to a higher desired outcome. Achieving agreement among disparate stakeholders on a shared high-level outcome, makes it more acceptable to test different means for achieving the outcome.

"It is difficult, if not impossible, to "˜pivot' (make adjustments) when major capital infrastructure investments are involved"

It is certainly the case that adaptive policy-making in the context of a tax or regulation is different than for an energy policy that includes something like hydropower which involves massive capital expenditure. Diversity is a well-recognized risk management approach. Climate change adds to the urgency in applying this approach for adaptation. In the context of infrastructure such as hydropower, this can mean more and smaller-scale hydropower investments, including investments in power sources that are uncorrelated to the risk of drought.

Concluding Thoughts: The Policy-maker's Kitbag

Responding to the fundamentally co-mingled challenges of climate change, energy scarcity and food security will be the defining challenge for this generation of policy-makers - whose kitbag of policy approaches, according to Jeffrey Sachs (2008), needs substantial upgrading. The ability of people, policies and institutions to adapt will be critical as the cumulative effects of these co-mingled challenges manifest over time. Adaptive policies, and in particular, the emphasis on both planned and autonomous learning and adjustment in policy environments, is one important addition to the ˜kitbag" of policy-makers in this new age of globalization and global impacts. To understand, innovate, monitor, and to improve will be key for adaptive policy-making - more specifically, this will involve respecting history in order to explore the future, innovation in policy to respond to opportunity, monitoring policy performance against desired outcomes, and improving in a continual manner.

Political scientist and best-selling author Thomas Homer-Dixon articulated for policy-makers what he refers to as the upside of down (Homer-Dixon, 2006). The downside is the catastrophic surprises that have shocked and devastated societies, both present and past. The upside is that we are learning from past failures and are beginning, albeit ever so slowly, to change our conventional way of thinking of the world as a predictable machine, to using our mental capacities for self-criticism and reflection-to better see the signals that can alert us when things are going wrong and in need of course correction. This improved understanding and appreciation of the inherently complex, dynamic and uncertain nature of socio-economic and ecological systems he calls the prospective mind. A policy-maker with a prospective mind knows that the only thing we do know about the future is that surprise, instability and extraordinary change will be regular features of our lives. A policy-maker with a prospective mind, as Homer-Dixon describes, seeks to make our societies more resilient to external shock and more supple in response to rapid change.

References

Homer-Dixon, T. (2006). The upside of down: Catastrophe, creativity and the renewal of civilization. Toronto: Random House of Canada Ltd.

Lee, K. (1993). Compass and gyroscope: Integrating science and politics for the environment. Washington, DC: Island Press.

Policy Research Initiative (PRI) (2005). Social capital as a public policy tool: Project report. Retrieved June 2008 from Government of Canada, www.policyresearch.gc.ca/doclib/PR_SC_SocialPolicy_200509_e.pdf.

Sachs, J.D. (2008). Common wealth: Economics for a crowded planet. New York: The Penguin Press.

Swanson, D. and S. Bhadwal (Eds.), Creating Adaptive Policies: A Guide for Policymaking in an Uncertain World, Sage, New Delhi/IDRC, Ottawa.

UK Cabinet Office (2003). Trying it out: The role of "˜pilots' in policy-making (Report of a review of government pilot). UK: Government Chief Social Researcher's Office, Cabinet Office.


[1] Interestingly, crop insurance programs were a notable exception, with four out of the seven practices observed in the Canadian case, including: integrated assessment in the selection of input parameters for determining crop yield; built-in adjustment to implement weather-indexed insurance; formal review in the form of policy pilots to test new insurance mechanisms; decentralization of decision-making by using district offices to implement provincial programs that are given mandate through a federal act. It is perhaps by no coincidence that crop insurance programs received positive feedback from all farmers interviewed with respect to facilitating income stability during weather shocks and stresses.

Agriculture Price Policy in Punjab - The minimum support price for farmers is calculated using an integrated set of five cost factors including: cost of production; input prices; input/output price parity; price trends; and terms of trade.

St. Mary Irrigation District - This planning authority in Alberta, Canada used water supply scenarios to help establish a water sharing agreement among districts.