The economics of adaptation and climate-resilient development: lessons from projects for key adaptation challenges

Abstract

EXECUTIVE SUMMARYThis working paper aims to inform the development community about the current state-of-knowledge and emerging thinking on the economics of adaptation and the application to development. The paper explores a number of key challenges on the economics of adaptation, and investigates examples of how these are being addressed in practical case studies. The case studies are drawn from the portfolio of the International Development Research Centre (IDRC) and the wider literature. The key areas of focus have been to assess:  Mainstreaming adaptation into development planning.  The analysis and appraisal of building (adaptive) capacity and non-technical adaptation.  The consideration of distributional effects.  The phasing and prioritisation of adaptation and the application of light-touch approaches for decision making under uncertainty.The analysis has first considered the mainstreaming of adaptation, recognising the recent emphasis on integrating (mainstreaming) adaptation into current policy and development, rather than implementing measures as a stand-alone activity. This requires the integration of adaptation into existing policies and processes, taking account of broader policy objectives and wider costs and benefits, not just for climate change. The review and case studies provide a number of additional insights. Effective mainstreaming requires the identification of suitable entry points in the policy and development planning process, noting these will differ across sectors and national contexts. An evaluation of case studies has been undertaken, focusing on LDCs where mainstreaming is being advanced. These indicate that the presence of a high level champion, the involvement of strong Ministries, the availability of climate finance and, technical assistance and capacity building support are important in effectively advancing mainstreaming. There is a need for pragmatism when mainstreaming and success will often be contingent on the timing of action and the ability to take advantage of intervention opportunities. A critical finding is that there is a strong need for technical assistance and capacity building to enable mainstreaming to occur. This remains an emerging area, and further practical orientated research and support is needed.The second area of interest has explored the analysis and appraisal of efforts to build (adaptive) capacity. This follows the recent adaptation literature which has moved from a focus primarily on technical options to a more comprehensive set of interventions that include capacity building, institutional strengthening, research and information, as well as non-technical (soft) options. These options are widely recommended as early low-regret priorities. Underpinning this shift is the recognition that adaptation is a process, which requires adaptive or organisational capacity, and that there are important barriers to adaptation that need to be addressed to enable effective implementation. However, it is particularly challenging to appraise capacity building and ins...