What can countries do to be more resilient to climate change? The report “The Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience” lays out six principles – to help ministries of finance approach adaptation challenges.
World Bank report on climate change
Climate risk cannot be reduced to zero, which means governments must take decisive action to help households and businesses manage them.
A new World Bank report, “The Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience”, lays out six universal principles to help policymakers plan for adaptation…
… Along with 26 actions, 12 tool boxes and 111 indicators.
Over the past decades, Uganda made remarkable progress in reducing poverty and boosting socio-economic development. In 1992, some 56 percent of the population were living in poverty. By 2016, that figure had fallen to 21 percent. Yet, the global economic ramifications of the COVID-19 pandemic and the effects of climate change are forcing the country to confront new challenges: shocks not only threaten further progress but can reverse hard won successes of the past.
Around 72 percent of Uganda’s labor force work in agriculture – a sector that is highly climate sensitive. Take coffee: Uganda is Africa’s second largest exporter of coffee. Over 17 percent of Uganda’s exports coming from just this high-value crop. Recent droughts, however, are estimated to have destroyed half of all coffee yields. In the coming decades, changing climatic conditions are expected to pose profound challenges to Uganda’s coffee sector: without adaptive measures, only one percent of Uganda’s current coffee producing land is expected to be able to continue production. And coffee is just one sector that could face mounting impacts from climate change: around 2.3 million poor people in Uganda also face high levels of flood risk.
In countries around the world, climate change poses a significant risk threatening the lives and livelihoods of people. These risks cannot be reduced to zero, which means governments must take decisive action to help firms and people manage them. Doing so requires planning ahead and putting in place proactive measures that not only reduce climate risk but also accelerate development, and cut poverty, according to a new report, The Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience.
“Adaptation cannot be an afterthought to development. Instead, by integrating it into policy thinking up front, governments can catalyze robust economic development while also reducing vulnerability to climate change,” says Lead Economist, Stéphane Hallegatte, who co-authored the report with Jun Rentschler and Julie Rozenberg, all of the World Bank.
The report lays out six universal “Principles of Adaptation and Resilience” and 26 concrete actions that governments can use to develop effective strategies. To support the development and design of these actions, it also includes 12 toolboxes with methodologies and data sources that can ensure that strategies are evidence-based.
1. Build resilient foundations with rapid and inclusive development
Poverty and the lack of access to basic services—including infrastructure, financial services, health care, and social protection—are strong predictors of vulnerability to climate change. To put it another way: the poorer communities are, the more climate change will affect them. No adaptation strategy can be successful without ensuring high-vulnerability populations have the financial, technical, and institutional resources they need to adapt.
2. Help people and firms do their part.
It’s critical to boost the adaptive capacity of households and firms: many already have incentives to adapt, but they need help overcoming obstacles, ranging from a lack of information and financing, to behavioral biases and imperfect markets. Governments can make information on climate risks available, clarify responsibilities and liabilities, support innovation and access to the best technologies, and ensure financing is available to all especially for solutions that come with high upfront costs. And they will also need to provide direct support to the poorest people, who cannot afford to invest in adaptation but are the most vulnerable to experiencing devastating effects of climate change.
3. Revise land use plans and protect critical infrastructure.
In addition to direct support to households and businesses, governments must also play a role in protecting public investments, assets, and services. Power and water outages and transport disruptions are estimated to cost more than $390 billion per year already in developing countries. But if countries have the right data, risk models, and decision-making methods available, the incremental cost of building the resilience of new infrastructure assets is small—only around three percent of total investments. Urban and land use plans are also important responsibilities of the public sector, and they influence massive private investments in housing and productive assets, so it is vital these adapt to evolving long-term climate risks to avoid locking people into high-risk areas.
4. Help people and firms recover faster and better.
Risks and impacts cannot be reduced to zero. Governments must develop strategies to ensure that when disasters do occur, people and firms can cope without devastating long-term consequences, and can recover quickly. Preparation such as better hydromet data, early warning and emergency management systems reduces physical damage and economic losses—for example, shuttering windows ahead of a hurricane can reduce damage by up to 50 percent. The benefits of providing universal access to early warning systems globally have been repeatedly found to largely exceed costs, by factors of at least 4 to 10. And then, financial inclusion, such as access to emergency borrowing, and social protection are essential ways to help firms and people get back on their feet. Adaptive social protection systems, which can be rapidly scaled up to cover more people and provide bigger support after a disaster, are particularly efficient, but they rely on delivery and finance mechanisms that have to be created before a crisis occurs.
5. Manage impacts at the macro level.
Coping with climate change impacts in one economic sector is already complicated. Coping with climate change impacts in all sectors at once requires strategic planning at the highest levels. Through many impacts in many sectors — from floods affecting housing prices to changes in ecosystems affecting agriculture productivity — climate change will affect the macroeconomic situation and tax revenues. Some impacts on major sectors (especially exporting ones) can affect a country’s trade balance and capital flows. And spending needs for adaptation and resilience need to be added on top of existing contingent liabilities and current debt levels to create further pressure on public finances. The combination of these factors may result in new risks for macroeconomic stability, public finances and debt sustainability, and the broader financial sector. Governments will need to manage these risks. Because of the massive uncertainty that surrounds macroeconomic estimates of future climate change impacts, strategies to build the resilience of the economy, especially through appropriate diversification of the economic structure, export composition and tax base, are particularly attractive over the short term.
6. Prioritize according to needs, implement across sectors and monitor progress.
Governments must not only prioritize actions to make them compatible with available resources and capacity; they must also establish a robust institutional and legal framework, and a consistent system for monitoring progress. The main objective of an adaptation and resilience strategy is not to implement stand-alone projects: it is to ensure that all government departments and public agencies adopt and mainstream the strategy in all their decisions, and that governments continuously monitor and evaluate the impact of their decisions and actions, so they can address any challenges and adjust their actions accordingly.
The report provides a range of practical tools that can help governments implement adaptation strategies. For instance, economic analysis methodologies can help to select the most important interventions, and budget tagging methods can ensure spending is consistent with expectations. A set of 111 indicators is also provided to enable governments to track progress toward greater resilience, to identify areas that are lagging, and to prioritize effective measures. It also sheds light on how the COVID-19 pandemic and subsequent economic crisis can affect the design of an adaptation and resilience strategy, recognizing how it has changed the development landscape in all countries.
The impacts of climate change are already here and fast increasing and there is no silver bullet to prevent them. Proactive and robust actions ahead of time, however, can go a long way to helping people and communities so that when a natural disaster strikes, not only are they better prepared to respond, but hard-won development gains are not lost.
.“The Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience” was produced with financial support from the Global Facility for Disaster Reduction and Recovery.