7. Adaptation costs
Some amount of climate change is inescapable, and adaptation measures will be required. What are the costs of adaptation? How does adaptation relate to mitigation, as part of a policy response?
Irrigated agriculture and climate change: The influence of water supply variability and salinity on adaptation
Connor, J. D.; Schwabe, K.; King, D. & Knapp, K.
Ecological Economics, 2012, 77, 149 – 157
Increased irrigation has been identified as an important potential adaptation to meet growing world food demand. Yet many of the world's major irrigation regions are in arid and semi-arid regions that face climate change projections of hotter and drier weather. A growing body of analysis assesses irrigated agriculture impacts of climate change in such regions. Most published literature focuses on reductions in the mean-levels of freshwater supplies; less information is available on the potential impacts from changes in the reliability and quality of those diminishing water supplies. This article investigates the combined impacts on irrigated agricultural food supply from reduced, more variable and more saline water supply for a representative semi-arid irrigation region. Results indicate that understanding the potential impacts of climate change on agricultural production requires an understanding of not only how production may adapt to changes in mean water supplies, but also how it may respond to changes in water supply variability and salinity. We illustrate, using an Australian, Murray Darling Basin semi-arid region example, that ignoring these combined water-related climate effects lead to results that overlook thresholds where the structure of production and cost incurred fundamentally change above certain levels of variability and salinity.
Agricultural technologies for climate change in developing countries: Policy options for innovation and technology diffusion
Lybbert, T. J. & Sumner, D. A.
Food Policy, 2012, 37, 114 - 123
Climate has obvious direct effects on agricultural production. The reverse is more apparent than ever as greenhouse gas emissions from agriculture are tallied. The development and effective diffusion of new agricultural practices and technologies will largely shape how and how well farmers mitigate and adapt to climate change. This adaptation and mitigation potential is nowhere more pronounced than in developing countries where agricultural productivity remains low; poverty, vulnerability and food insecurity remain high; and the direct effects of climate change are expected to be especially harsh. Creating the necessary agricultural technologies and harnessing them to enable developing countries to adapt their agricultural systems to changing climate will require innovations in policy and institutions as well. Potential constraints to innovation involve both the private and public sectors in both developing and developed countries. The process of transferring agricultural innovations across agroecological and climatic zones is often subject to agronomic constraints. Often, the most binding constraints occur at the adoption stage, with several factors that potentially impede poor farmers’ access to and use of new technologies. Based on discussions of these constraints, we derive six policy principles and use these principles to suggest several specific investments and policy priorities.
Managing private and public adaptation to climate change
Tompkins, E. L. & Eakin, H.
Global Environmental Change, 2012, 22, 3 - 11
Adaptation to climate change is already being delivered by public and private actors, yet there has been little analysis of the relationships between the providers and beneficiaries of adaptation. This paper reviews the type of actors that are supplying adaptation services and their motivations. We then focus on a specific, under-explored case of adaptation: that of privately provided adaptation public goods and services, the realization of which is contingent on the individual management of private goods and private risks. Following the work of Olson (1965) we find that the benefits of the privately provided adaptation public good do not necessarily accrue back to the (same) individuals who are the providers. The characteristics of this particular form of public good pose specific institutional challenges. In this paper we: 1) explore the characteristics and defining features of these privately provided adaptation public goods; 2) argue that this form of adaptation provisioning is increasingly recognised as a feature in climate change adaptation (and/or social transformation) problems; 3) review existing cases of effective/ineffective management of these public goods; and 4) outline the institutions that may be required to facilitate the management of these public goods for adaptation.
Sustainability and climate adaptation: Using Google Earth to engage stakeholders
Stocker, L.; Burke, G.; Kennedy, D. & Wood, D.
Ecological Economics, 2012, 80, 15 - 24
This action-research project aimed to test a participatory mapping methodology using Google Earth to develop shared understandings among participants about sustainability and climate change. The process focused on improving knowledge uptake and enabling dialogue among participants in order to develop adaptation strategies for Rottnest Island, off the Western Australian coast. Project results indicate increased levels of knowledge and commitment to active involvement in sustainability and climate change issues. Common threads came together in a coherent set of recommendations that will contribute to ongoing climate change and sustainability planning by the Rottnest Island Authority. Major conclusions drawn include: the usefulness of Google Earth for participatory planning for climate adaptation and sustainability; the methodology enables social, economic, ecological and cultural layers to be considered without any having primacy; care must be taken to ensure knowledge and power differential are managed effectively; and, the methodology brought together stakeholders and scientists to co-produce knowledge and decisions.
Economic prospects of ocean iron fertilization in an international carbon market
Rickels, W.; Rehdanz, K. & Oschlies, A.
Resource and Energy Economics, 2012, 34, 129 – 150
Staying within the 2° C temperature increase target for climate change requires for ambitious emission reduction targets for the 2012-2020 compliance period. Cost-efficiency is a crucial criterion for the achievement of such targets, requiring analyses of all possible options. Enhancing the oceanic carbon sink via ocean iron fertilization (OIF) provides such an option. Our analysis reveals that the critical unit costs per net ton of CO2 sequestered by OIF range from 22 to 28 USD (price level 2000) in a post-Kyoto compliance scenario. The critical unit costs are defined as those that would make an emitter indifferent between various abatement options. With reference to hypothetical short-term large-scale Southern Ocean OIF we are able to show that seven years of OIF provide a number of credits exceeding those obtainable from global forestation projects lasting 20 years. From an economic perspective, our results indicate that OIF can be considered a potentially viable carbon-removal option. However, further research is needed, especially on adverse side-effects and their ecological and economical consequences.
Mitigating economic risk from climate variability in rain-fed agriculture through enterprise mix diversification
Kandulu, J. M.; Bryan, B. A.; King, D. & Connor, J. D.
Ecological Economics, 2012, 79, 105 - 112
Climate variability, and its increase with climate change, pose substantial economic risks to agriculturalists and hence, limit their ability to respond to global challenges such as food security. Enterprise mix diversification is the most common, and is widely regarded as the most effective, strategy for mitigating multiple sources of short-term economic risk to agricultural enterprises. However, assessments of enterprise mix diversification as a strategy for mitigating climate risks to ensure long term viability of agricultural enterprises are sparse. Using the Lower Murray region in southern Australia as a case study, we combined APSIM modelling with Monte Carlo simulation, probability theory, and finance techniques, to assess the extent to which enterprise mix diversification can mitigate climate-induced variability in long term net returns from rain-fed agriculture. We found that diversification can reduce the standard deviation by up to A$200 ha- 1, or 52% of mean net returns; increase the probability of breaking even by up to 20%, and increase the mean of 10% of worst probable annual net returns (Conditional Value at Risk) by up to A$100 ha- 1. We conclude that enterprise mix diversification can also be an effective strategy for hedging against climate-induced economic risk for agriculturalists in marginal areas.
How harmful are restrictions on adapting to climate change?
Kelly C. de Bruin and Rob B. Dellink
Global Environmental Change, in press
The dominant assumption in economic models of climate policy remains that adaptation will be implemented in an optimal manner. There are, however, several reasons why optimal levels of adaptation may not be attainable. This paper investigates the effects of suboptimal levels of adaptation caused by different types of adaptation restrictions, on the composition and level of climate change costs and on welfare. We find that especially restrictions to the effectiveness of adaptation at more extreme levels of climate change can be very harmful. Furthermore we show that the potential of mitigation to offset suboptimal adaptation varies from being essential in case adaptation becomes ineffective at higher temperature increases, to being largely ineffective in case of short-term inaction. However, in all cases the short-term recommendation is to increase mitigation levels slightly above what is normally recommended, and to keep mitigation policies flexible enough to be able to respond when adaptation restrictions become more prominent. It is clear that by reducing adaptation restrictions, in combination with adjusting the optimal level of mitigation may keep the costs of adaptation restrictions limited, and thus generally it is very harmful to ignore existing restrictions on adaptation when devising (efficient) climate policies.
Managing private and public adaptation to climate change
Emma L. Tompkins, Hallie Eakin
Global Environmental Change, (2012) 22(1): 3-11
Adaptation to climate change is already being delivered by public and private actors, yet there has been little analysis of the relationships between the providers and beneficiaries of adaptation. This paper reviews the type of actors that are supplying adaptation services and their motivations. We then focus on a specific, under-explored case of adaptation: that of privately provided adaptation public goods and services, the realization of which is contingent on the individual management of private goods and private risks. Following the work of Olson (1965) we find that the benefits of the privately provided adaptation public good do not necessarily accrue back to the (same) individuals who are the providers. The characteristics of this particular form of public good pose specific institutional challenges. In this paper we: 1) explore the characteristics and defining features of these privately provided adaptation public goods; 2) argue that this form of adaptation provisioning is increasingly recognised as a feature in climate change adaptation (and/or social transformation) problems; 3) review existing cases of effective/ineffective management of these public goods; and 4) outline the institutions that may be required to facilitate the management of these public goods for adaptation.
Climate change impacts and adaptation in cities: a review of the literature
Alistair Hunt and Paul Watkiss
Climatic Change (2011) 104(1): 13-49.
Many of the decisions relating to future urban development require information on climate change risks to cities This review of the academic and "grey" literature provides an overview assessment of the state of the art in the quantification and valuation of climate risks at the city-scale. We find that whilst a small number of cities, mostly in OECD countries, have derived quantitative estimates of the costs of climate change risks under alternative scenarios, this form of analysis is in its infancy. The climate risks most frequently addressed in existing studies are associated with sea-level rise, health and water resources. Other sectors such as energy, transport, and built infrastructure remain less studied. The review has also undertaken a case study to examine the progress in two cities—London and New York—which are relatively advanced in the assessment of climate risks and adaptation. The case studies show that these cities have benefited from stakeholder engagement at an early stage in their risk assessments. They have also benefited from the development of specific institutional responsibilities for co-ordinating such research from the outset. This involvement has been critical in creating momentum and obtaining resources for subsequent in-depth analysis of sectoral impacts and adaptation needs..While low cost climate down-scaling applications would be useful in future research, the greatest priority is to develop responses that can work within the high future uncertainty of future climate change, to build resilience and maintain flexibility. This can best be used within the context of established risk management practices.
Climate change impacts on pricing long-term flood insurance: A comprehensive study for the Netherlands
Jeroen C.J.H. Aerts and W.J. Wouter Botzen
Global Environmental Change (2011) 21(3): 1045-1060.
Recently long-term flood insurance contracts with a duration of 5, 10 or 15 years have been proposed as a solution for covering flood risk and mitigating increasing flood losses. Establishing a long-term relation between the policyholder and the insurer can provide better incentives to reduce risk through undertaking damage mitigation measures. However, the uncertainty about the development of future flood risk in the face of climate and socio-economic change may complicate insurers’ rate-setting of long-term contracts. This issue has been examined in this study by estimating the effects of these changes on flood risk and pricing flood insurance premiums of short- and long-term flood insurance contracts in all (53) dike-ring areas in the Netherlands. A broad range of simulations with hydrological and flood damage models are used to estimate the future development of flood risk and premiums. In addition, the long-term development of insurance funds is estimated with a spatial "Climate Risk Insurance Model (CRIM)" for a private insurance arrangement and for a ‘three-layered’ public-private insurance program. The estimation of flood insurance premiums of long-term insurance contracts reveals fundamental problems. One is that there is an incentive for either the consumer or the insurer to prefer short-term rather than long-term contracts in the face of climate-related uncertainty. Therefore, it seems advisable to examine the introduction of one-year flood insurance contracts in the Netherlands, at least until the large uncertainties with climate and socio-economic change on flood risk have been resolved. The estimations performed with the Climate Risk Insurance Model indicate that a private insurance fund could have difficulties with building up enough financial reserves to pay for flood damage, while the layered public–private insurance scheme is more robust.
Observed adaptation to climate change: UK evidence of transition to a well-adapting society
Emma L. Tompkins, W. Neil Adger, Emily Boyd, Sophie Nicholson-Cole, Keith Weatherhead and Nigel Arnell
Global Environmental Change (2010) 20(4): 627-635.
This paper investigates whether and to what extent a wide range of actors in the UK are adapting to climate change, and whether this is evidence of a social transition. We document evidence of over 300 examples of early adopters of adaptation practice to climate change in the UK. These examples span a range of activities from small adjustments (or coping), to building adaptive capacity, to implementing actions and to creating deeper systemic change in public and private organisations in a range of sectors. We find that adaptation in the UK has been dominated by government initiatives and has principally occurred in the form of research into climate change impacts. These government initiatives have stimulated a further set of actions at other scales in public agencies, regulatory agencies and regional government (and the devolved administrations), though with little real evidence of climate change adaptation initiatives trickling down to local government level. The sectors requiring significant investment in large scale infrastructure have invested more heavily than those that do not in identifying potential impacts and adaptations. Thus we find a higher level of adaptation activity by the water supply and flood defence sectors. Sectors that are not dependent on large scale infrastructure appear to be investing far less effort and resources in preparing for climate change. We conclude that the UK government-driven top-down targeted adaptation approach has generated anticipatory action at low cost in some areas. We also conclude that these actions may have created enough niche activities to allow for diffusion of new adaptation practices in response to real or perceived climate change. These results have significant implications for how climate policy can be developed to support autonomous adaptors in the UK and other countries.
Climate change in a public goods game: Investment decision in mitigation versus adaptation
Reviva Hasson, Åsa Löfgren and Martine Visser
Ecological Economics (2010) 70(2): 331-338.
We use behavioral and experimental economics to study a particular aspect of the economics of climate change: the potential trade-off between countries' investments in mitigation versus adaptation. While mitigation of greenhouse gases can be viewed as a public good, adaptation to climate change is a private good, benefiting only the country or the individual that invests in adaptation. We use a one-shot public-goods game that deviates from the standard public-goods game by introducing a stochastic term to account for probabilistic destruction in a climate-change setting, where the probability density function is mapped to within-group levels of mitigation. We compare low-vulnerability and high-vulnerability treatments by varying the magnitude of disaster across treatments. Our results show that there is no significant difference in the level of mitigation across these treatments. Further, our results emphasize the role of trust in enhancing cooperation.
Social capital, individual responses to heat waves and climate change adaptation: An empirical study of two UK cities
Johanna Wolf, W. Neil Adger, Irene Lorenzoni, Vanessa Abrahamson and Rosalind Raine
Global Environmental Change (2010) 20(4): 44-52.
It has been claimed that high social capital contributes to both positive public health outcomes and to climate change adaptation. Strong social networks have been said to support individuals and collective initiatives of adaptation and enhance resilience. As a result, there is an expectation that social capital could reduce vulnerability to risks from the impacts of climate change in the health sector. This paper examines evidence on the role social networks play in individuals’ responses to heat wave risk in a case study in the UK. Based on interviews with independently living elderly people and their primary social contacts in London and Norwich, we suggest that strong bonding networks could potentially exacerbate rather than reduce the vulnerability of elderly people to the effects of heat waves. Most respondents interviewed did not feel that heat waves posed a significant risk to them personally, and most said that they would be able to cope with hot weather. Bonding networks could perpetuate rather than challenge these narratives and therefore contribute to vulnerability rather than ameliorating it. These results suggest a complex rather than uniformly positive relationship between social capital, health and adaptation to climate change.
Did the Stern Review underestimate U.S. and global climate damages?
Frank Ackerman, Elizabeth A. Stanton, Chris Hope and Stephane Alberth
Energy Policy (2009) 37(7): 2717-2721.
One controversy surrounding the Stern Review concerns the magnitude of the expected impacts of climate change. Stern’s estimates, based on the PAGE2002 model, were greater than those produced by many other models, leading some critics to suggest that Stern had inflated his damage figures. We reached the opposite conclusion in a study of the costs to the U.S. of inaction on climate change. This article describes our revisions to the PAGE estimates, and explains why the Stern Review underestimates U.S. and global damages. One large part of the underestimate is due to the PAGE/Stern assumptions about the availability of almost costless adaptation in developed countries. Stern’s estimates from PAGE2002 imply that mean business-as-usual damages in 2100 would represent just 0.4 percent of GDP for the United States and 2.2 percent of GDP for the world. Our revisions and reinterpretation of the PAGE model imply that climate damages in 2100 could reach 2.6 percent of GDP for the United States and 10.8 percent for the world.
Using expert elicitation to define successful adaptation to climate change
Miguel de Franca Doria, Emily Boyd, Emma L. Tompkins and W. Neil Adger
Environmental Science & Policy (2009) 12(7): 810-819.
This paper develops definitions of adaptation and successful adaptation to climate change, with a view to evaluating adaptations. There is little consensus on the definition of adapting to climate change in existing debates or on the criteria by which adaptation actions can be deemed successful or sustainable. In this paper, a variant of the Delphi technique is used to elicit expert opinion on a definition of successful adaptation to climate change. Through an iterative process, expert respondents coalesced around a definition based on risk and vulnerability and agreed that a transparent and acceptable definition should reflect impacts on sustainability. According to the final definition, agreed by the Delphi panel, successful adaptation is any adjustment that reduces the risks associated with climate change, or vulnerability to climate change impacts, to a predetermined level, without compromising economic, social, and environmental sustainability.
Fair adaptation to climate change
Jouni Paavola and W. Neil Adger
Ecological Economics (2006) 56(4): 594-609.
This article identifies social justice dilemmas associated with the necessity to adapt to climate change, examines how they are currently addressed by the climate change regime, and proposes solutions to overcome prevailing gaps and ambiguities. We argue that the key justice dilemmas of adaptation include responsibility for climate change impacts, the level and burden sharing of assistance to vulnerable countries for adaptation, distribution of assistance between recipient countries and adaptation measures, and fair participation in planning and making decisions on adaptation. We demonstrate how the climate change regime largely omits responsibility but makes a general commitment to assistance. However, the regime has so far failed to operationalise assistance and has made only minor progress towards eliminating obstacles for fair participation. We propose the adoption of four principles for fair adaptation in the climate change regime. These include avoiding dangerous climate change, forward-looking responsibility, putting the most vulnerable first and equal participation of all. We argue that a safe maximum standard of 400–500 ppm of CO2 concentrations in the atmosphere and a carbon tax of $20–50 per carbon equivalent ton could provide the initial instruments for operationalising the principles.
Adaptation and Its Measurement
W. Michael Hanemann
Climatic Change (2000) 45(3-4): 571-581.