World Resource Institute

How Low Income Countries Can Plan for Climate Change Impacts

By Shardul Agrawala, Senior Economist, Climate Change OECD Environment Directorate

Commentaries were commissioned by the World Resources Report to react to the Expert Perspectives series. This commentary responds to Question 2: How can we balance today's pressing needs with long term risks?

Policy makers worldwide continue to search for solutions to pressing development challenges such as persistent poverty, malnutrition and economic stagnation. The social impacts of such problems are typically all too evident, as is the need for policy responses. Against this backdrop of the visible and urgent, climate change often looms as a somewhat esoteric, long-term, global threat to development. Development planners are often unsure how it will affect their core priorities, and whether and how to integrate or "mainstream" climate change considerations within their activities.

The stakes for both early action and inaction on the impacts of climate change are particularly acute in low income countries. Early action based on uncertain climate scenarios may impose significant opportunity costs to cash strapped governments that are simultaneously confronting more certain and pressing challenges. On the other hand, low income countries are also disproportionately vulnerable to the impacts of climate variability and change. A larger share of their population and economies is directly dependent on climate sensitive natural resources. These countries also have much lower capacities to adapt, which further exacerbates their vulnerability to climate change. Inadequate investments in preparedness, particularly for extreme weather events, can easily set development back by several years, if not a decade or more. The economic and social costs of inaction may therefore be particularly high as well.

Given this situation, how can decision makers, especially in low income countries, best calibrate their response to the impacts of climate change? How should priorities for action on adaptation be established? And how can these priorities be operationalised?

These are some of the critical questions that are addressed in the five articles in this collection. Three of the articles, by Sprinz, Zambrano-Barragan, and Spiegel are conceptual in nature. The other two, by Nimir and Elgizouli, and Dixit are anchored in two specific low income country contexts (Sudan and Nepal).

Sprinz takes a global perspective. He examines why multilateral decision-making on climate change has been so difficult and identifies factors that may expedite action by governments on both mitigation and adaptation. On the latter (which is the focus of this commentary) Sprinz notes the critical importance of extreme weather events as triggers for short term, largely reactive action. A succession of such events, according to Sprinz, can also provide the necessary impetus for catalyzing more fundamental changes in the policy environment that may make anticipatory action more feasible.

While this may indeed be true, there is of course a need for more systematic (and certainly less destructive) mechanisms to trigger anticipatory adaptation than waiting for disasters. Spiegel, in his article, provides one partial solution - economic analysis and instruments. It is a truism in policy making that what gets costed gets budgeted. And what gets budgeted gets implemented. Reviewing studies from eight different regions in both the developed and developing world Spiegel notes that two-thirds of the expected economic losses from climate change can be averted using cost effective adaptation measures that range from infrastructure (such as improved drainage and coastal defences) to changes in regulation (building codes) to information campaigns. This kind of analysis can provide powerful arguments for early action. However, while the measures might be cost-effective they may not necessarily be low cost and many low income countries may not have the "financial muscle" to invest in them. Spiegel's solution is to have a portfolio approach that strikes a balance between risk prevention and risk transfer to private insurance and capital markets. Clearly the private sector has an important role to play in this regard, but there is also a concomitant need for governments to make the necessary public investments in reducing baseline risk. At the same time public support should not convert market mechanisms such as insurance into subsidies, as this can actually lead to maladaptation.

The two country case studies in this collection, Sudan and Nepal, add an important reality check to the adaptation challenge from the perspective of low income countries. Both countries have high levels of social vulnerability as well as high exposure to the impacts of climate variability. Climate change only compounds these baseline stresses. In this context, as Dixit notes in his case study of Nepal, responding to the impacts of climate change impacts requires "plural institutions" and incremental solutions at local, institutional and national scales". In a similar vein, Nimir and Elgizouli looking at the case of Sudan, call for the integration of climate change considerations into existing national, sectoral and local planning processes.

While the exact priorities and modalities for implementing such a multi-pronged adaptation strategy will differ from country to country, there are nevertheless some generalisable elements. In her contribution Zambrano-Barragan lays out some of these elements that decision-makers, particularly in low-income countries, can focus upon in dealing with climate change impacts. In particular, she stresses the urgency of a flexible socio-institutional framework for strategic decision making. Climate change considerations not only need to be incorporated in operative and budgetary plans, but should also be accompanied by capacity building for public officials and central and local co-ordination. In addition to establishing this "enabling" environment, Zambrano-Barragan suggests improvements in information and knowledge management with enough flexibility to be adapted to local needs, circumstances and priorities.

The take home message from this diverse collection of articles is that there is, in fact, a lot that decision makers in low income countries can do to plan for the impacts of climate change. Some of these measures will undoubtedly require significant investment and transfer of know-how. These include, for example, investments in suitable infrastructure as well as in improving the quality and coverage of climate information. Many other actions, however, need not be as expensive. These include establishing the right institutional frameworks for adaptation, incorporating appropriate flexibility in policies and regulations in view of the changing climate, establishing suitable incentives to conserve climate sensitive natural resources, and strengthening social safety nets for vulnerable populations.