Overview

2. Overview Provide some insights on the relationships between development and climate change adaptation, with a (macro) economic perspective. Link adaptation development Link development adaptation How to spend adaptation money wisely Adaptation cost Tackling the issue of education included in the wider context of adaptive capacity building Adaptation and equity 1

3. Adaptation: some basics “Adjustment in ecological, social, or economic systems in response to actual or expected climatic stimuli, and their effects or impacts. […] refers to changes in processes, practices or structures to moderate or offset potential damages or to take advantages of opportunities associated with changes in climate” (IPCC TAR, 2001) Emissions Mitgation Economic system Climate system Adaptation Ex ante  Anticipatory Damages Ex post  Reactive Autonomous Private “Something” (a process) acting on the effects (impacts) of climate change Planned Public Incremental Soft 2 Transformational Hard

4. Adaptation is unavoidable, but mitigation is needed … and the associated impacts Thus… “Managing the unavoidable, avoiding the unmanageable” 3

5. The two-way relation CC adaptation - development FromAdaptationtoDevelopment Direct: lower negative effectsfromclimatechange => lower “losses” and lower negative impact on economicactivity and social “welfare” Indirect (side) effects: adaptation (especiallyproactive) actions can consist in (a) investments (no pure costs) (b) notnecessarilyrelatedonlytoclimatechange. E.g.: coastaldefence, irrigation, health care, landscape management and riskreductionprogramsthat (c) can spur e.g. “welfare”, employment and technologicalinnovation in additiontoenvironmental benefit. (ILO) Mal adaptation: higherratherthanlowervulnerability conflictswithotheradaptationneeds, adaptingagents (water) or with the objectivesofotherpolicies (e.g. mitigationwhenhigherenergyuseisnecessary, desalination, air conditioning etc.) 4

6. The two-way relation CC adaptation - development In general: adaptation is deeply integrated in the social-economic fabric. Needs thus to be also integrated in the wider policy context The consequence (and current debate): Moving from “mainstreaming cimate change adaptation” to “mainstreaming climate change vulnerability reduction” to “mainstreaming vulnerability reduction, ultimately development” in planning 5

7. Damage reducing potential of adaptation Calibrating regional adaptation cost and benefit functions on Agrawala and Fankhauser 2008, UNFCCC 2007. Huge uncertainty! 6

8. Implications for world CC residual damage Source Bosello et al. (2012) 7

9. Implications for world CC residual damage Source Bosello et al. (2012) 8

10. Implications for world CC residual damage 8.8 8.7 7.2 Source Bosello et al. (2012) 9

11. But “crowding out ” between adaptation and mitigation Mitigation halves adaptation effort (wrt adaptation alone). Still adaptation expendiure non negligible. 10 Source Bosello et al. (2012)

12. The two-way relation CC adaptation - development DevelopmentAdaptation The idea: the “richer” you are, the higherisyourresourcesavailabilityto anticipate/copewithadverseconsequencesincludingthosefromclimatechange. Or, the more you care aboutclimateimpacts (“environment “as a luxurygood) Extending: Developmentis the best way toaddressclimatechangeimpacts “ShellingConjecture” (Shelling, 1992) Thismayholdforcountries, butalsofor social groups Mixedevidence 11

13. An example with (future) malaria mortality in Nigeria Source: Tol et al. (2007) 12

14. An example with (past) catastrophic events Natural Catastrophes 1980-2010 Source: Munich-RE (2011) 13

15. Summarizing More development may mean lower vulnerability depending on a complex interaction between: - Exposure (tipe of impacts a society is subjected to) - Social- economic structure - Their joint evolution (paths of development) Thus - It can hold for some societies and not for other - It can hold in some periods and not other (Anthoff and Tol 2011, Fankhauser and Burton, 2011) 14

16. More on adaptation costs In the short-medium term adaptation costs are already relevant for developing and developed countries Yearlyadaptationexpenditure Developing Cs 2010-15 Developing Cs 2030 15 Developed Cs 2030

17. To do what: hard vs soft adaptation On the onehandthereis the needof “hard” measures Yearly adaptation costs 2010-2050 Source: WB (2010) Thesefigures are likelytobeunderestimated: around $ 100-140 Billion / year in the first halfof the century and increasingthereafter(IIED 2011) 16

18. To do what: hard vs soft adaptation On the other hand there is the need of establishing those pre-requisites for a succefull adaptation i.e. of adaptive capacity building. In a loose sense => more knowledge and awareness  key role of education at different levels. • In the short term: awareness raising on climate change impacts and adaptation; more research on climate change and on cost and benefits of climate change policies/ measures; institutional capacity building • In the longer term , change in social behavior • These actions are particularly useful in the presence of uncertainty which requires flexibility and to reduce “moral hazard” 17

19. Where: an equity issue Developing countries are more vulnerable to climatic damages, more exposed (70% of damages occur here), more sensitive, lack of resources and Adaptation deficit: adaptive capacity (institutions, access to information, natural resources, and education) is lower 80% of adaptation expenditure is needed in D.ing countries $260 billion annuitized Equalizingadaptationexpenditureover GDP => $ 180 billionfromD.edtoD.ingcountriesyearly(quick and dirty back of the envelopecalculation!) 20% of adaptation expenditure is needed in D.ed countries $70 billion annuitized 18

20. Financingadaptationtoday Adaptation funding through dedicated multilateral climate (public) funds (until 2011) Cancun Adaptation Framework proposes $ 30 billion fast start finance 2010-2012 for mitigation and adaptation (100 billion by 2020) … In 2011 total approved adaptation finance was $ 957 million (Nakooda et al. 2011), … still far from $180 billion… Recipients of adaptation funding (until 2011) 19 19 Source: Nakooda et al., (2011)

21. Ideas under debate… • Relevant part of adaptation is a “private good” that could be efficiently provided by the individual/firm • Today about 60% of funding for climate-related investments originates from the private sector (Buchner 2011). • E.g. collective insurance and microfinance may be ways to help developing countries communities to respond to climate change  Pros: they can mobilize financing to adaptation in times of austerity. Cons: financing adaptation through loans put more stress on already highly indebted communities • Currently debated by the “high-level advisory group on climate finance” as well as work commissioned by the G20: use of taxes or levies on financial transactions or bunker fuels and carbon market revenue to support adaptation. Could private initiative help to cover the adaptation financial gap? 20

22. From the global to the local/urban dimension Climate Change impact areas • Water resources • Agricultural and food security • Terrestrial and freshwaterecosystems • Coastalzones and marine ecosystems • Humansettlements • Energy and industry • Insurance and otherfinancialservices • Humanhealth All have a urban dimension All the interactions and issues mentioned can be declined at the urban level Source: IPCC FAR 2001 21

23. Thank you!!!

24. ?????? http://climate-adapt.eea.europa.eu/en/ http://www.adaptationatlas.org/ 23