Enabling private sector adaptation to climate change in sub‐Saharan Africa

Abstract

The private sector is increasingly recognized as having important potential to help society adapt and become more resilient to climate change. Yet there is limited research examining how to promote and facilitate private sector adaptation in developing countries and in particular how governments can create an enabling environment to stimulate and incentivize domestic private sector adaptation. In this paper, we address this gap through a review of the key factors required to provide an enabling environment for the private sector denoted by existing adaptation literatures. We do this with a focus on adaptation by small and medium enterprises (SMEs) in sub‐Saharan Africa (SSA). To advance this review, we draw insights from a much larger, yet generally independent, literature on enabling environments for private sector development. This literature disaggregates the private sector and highlights key constraints to the development and growth of SMEs in SSA, including deficient infrastructure and evidence of an African gap in access to and use of finance. Both areas of scholarship are then combined in a framework identifying key “building blocks” constituting enabling conditions for private sector adaptation. The framework could be applied in many ways including to focus strategies to enhance private sector adaptation and to identify trade‐offs and interactions between policies or initiatives surrounding private sector development. By combining these literatures, we call for a more holistic approach to develop enabling environments for SME adaptation and climate resilient development that addresses the broader structural deficits that condition vulnerability and barriers that limit adaptive capacity. This article is categorized under: Vulnerability and Adaptation to Climate Change > Institutions for Adaptation

A relational view of climate adaptation in the private sector: How do value chain interactions shape business perceptions of climate risk and adaptive behaviours?

“…Resource diversification strategies have been acknowledged as an important adaptive strategy for firms that rely on yields and operations that are highly affected by climate (Bren D'Amour, Wenz, Kalkuhl, Christoph Stechel, & Creutzig, ; Crick et al, ; Linnenluecke, Stathakis, & Griffiths, ). Diversification, however, requires new network relationships to be fostered and developed, either within existing or new business environments.…”

“…Some have acknowledged the role of social networks on farmers' vulnerability and adaptive capacity (Ali & Erestein, 2017;Rhiney et al, 2015) and mapped the role of value chain information networks on adaptation decision outcomes (Nidumolu, Lim-Camacho, Gaillard, Hayman, & Howden, 2018). Similarly, other studies have described the interdependencies of adaptation actions between value chain actors (Crick, Gannon, Diop, & Sow, 2018;Fleming et al, 2014;Lim-Camacho et al, 2015;Lim-Camacho et al, 2016), as well as the role of power dependencies articulated through network relations on adaptive behaviours (Benedikter et al, 2013). These studies have helped conceptualise adaptive behaviour within the context of value chains as a system of interactions and interdependencies working towards adaptation goals (e.g., Lim-Camacho et al, 2017), or as systems of linked communities of practice combining their capabilities to foster innovation (Lowitt, Hickey, Ganpat, & Phillip, 2015).…”

Business experience of floods and drought-related water and electricity supply disruption in three cities in sub-Saharan Africa during the 2015/2016 El Niño

“…Meaningful climate information, forecasts and tailored information about resource disruption are therefore only one element of the enabling conditions that MSMEs require to make the adjustments necessary to respond to climate and hydrological risk. Echoing the findings of wider literatures Crick et al, 2018 b), access to finance and capacity building, to address lack of knowledge and confidence to implement strategies, appear to be priority areas for supporting MSME adaptation to hydrological disruption. This research, for example, suggests that businesses will benefit from governments seeking to increase access to credit and designing incentives that support businesses to invest in adaptation and coping strategies, such as generator access (c.f.…”

Climate Change Adaptation among Female-Led Micro, Small, and Medium Enterprises in Semiarid Areas: A Case Study from Kenya

“…Firstly, 'the private sector' constitutes a wide-ranging term that covers all types of formal and informal businesses, ranging from micro enterprises, such as local entrepreneurs and smallholder farmers, through to multinational companies operating at global scales. As well as focusing primarily on companies based in developed countries, as noted by Crick et al, (2018a) the private sector adaptation literature has, to date, tended to focus on larger sized companies (Averchenkova et al, 2016;PWC, 2010;Tompkins and Eakin, 2012). Yet adaptive capacity varies widely, being intimately connected with wider social vulnerabilities and heavily constrained by local institutional, regulatory, infrastructural and technological conditions (Ackerman et al, 2012).…”

“…Yet adaptive capacity varies widely, being intimately connected with wider social vulnerabilities and heavily constrained by local institutional, regulatory, infrastructural and technological conditions (Ackerman et al, 2012). As a result, it is important to disaggregate the private sector when considering adaptation (Crick et al, 2018a).…”