Transcript Climate Change Impacts and Adaptations - UNDP-ALM

The Economics of Climate
Change Adaptation
UNDP Accra 2012
Robert Mendelsohn
Yale University
Policy Questions
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What is adaptation?
What adaptations are efficient?
When should they occur?
Where should they be done?
What is adaptation?
• Change in behavior in response to climate
change.
• Examples: avoid running in hot afternoon,
change to heat-loving crops, adjust water
management, control disease causing
pests
Objective of Adaptation
• Maximize net benefits (benefits minus
costs) given that local climate has
changed
– Equate marginal benefit to marginal cost
• Depends on local conditions
– Local climate
– Local market
– Other local factors
Where Should Adaptation be
Done?
• Everywhere, but priority to places where
climate change is having largest impact
-Low latitudes could bear 70% of
damages of climate change because
already hot
• Not necessarily places with largest climate
change (north pole)
What sectors are at risk?
• Market: agriculture by far the largest,
energy, water, coastal, and forestry
• Nonmarket: ecosystem change (species
loss, shifting systems), disease, heat
stress, cold stress, recreation
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Can detailed impacts be predicted?
• Most analyses of climate impacts reveal
hill-shaped relationship with temperature
• Benefits to farms in cool locations
• Damages to farms in warm locations
• Impacts vary a great deal across the
landscape
Marginal impacts of Temperature
and Precipitation
Timing
• Timing of many adaptation actions
• Done too soon, raises cost and can be
ineffective (new crop before warm enough will
not grow well)
• Done too late, damages can be large (as if there
is no adaptation)
• Because adaptation actions must wait for
climate to change, the bulk of adaptation actions
need to be done in the second half of this
century
Autonomous Adaptation
• Autonomous
– Private benefit for actor
– Self interest to perform
– Will be done without help
– Most often done after climate changes
• Examples:
– Shifting from crops to animals
– Switching crop and animal species
– Changing timber species
Public Adaptations
• Benefit many (jointly consumed)
• Require coordination (government)
• Examples
– Conservation
– Water planning
– Flood control
– Storm warning
– Technical change
What should governments do?
• Help create setting to encourage markets
and private ownership of private resources
– Encourage long term use rights
– Enforce private property rights
• Manage public adaptations (conservation,
public resources, externalities)
• Address fairness issues
Common Property
• Requires collective action to protect
• Individual users will not adapt
• Overharvest common forests or fisheries,
overgraze grasslands, overutilize water
resources
• Climate change will make these current
problems worse by making these
resources more scarce
• Need to encourage long term use rights
Nonmarket Adaptations
• Public health responses to potential
illnesses and heat stress
• Retreat options for marshes and
mangroves against sea level rise
• Flexible and dynamic conservation
management for species migration to new
habitat
Externalities
• Secondary ozone pollution formation will
require tighter regulations on emissions
• Flooding will require land use regulations
and flood control
Severe Weather Events
• Can adapt now to hurricanes, droughts,
floods because current problem
• Severe events likely to cause more
damage in the future as economy grows
• Greenhouse gases may make events
more intense of frequent
Can poor adapt?
• Poor can do autonomous adaptation
• Household farms may adapt better than
commercial farms because less
specialized
• May help poor adapt for equity reasons:
they are low income and unlikely to have
contributed much to emissions
Additionality
• Unfair to expect climate change funds to
pay for development
• Yet focus on additionality will hamper
efforts to proceed-too difficult to parse out
what is adaptation versus development
• Recommend new focus on integration
between climate adaptation and
development
Policy Suggestions
• Do not confuse adaptation and mitigation
• Providing assistance for mitigation does
not help a poor country cope with climate
change
What adaptation can be done now?
• Focus on funding public adaptation where
needed and when it is needed
• Do planning and research to get ready
• Encourage institutional changes: improve public
management and markets for natural resources
(land, water, fisheries)
• Help developing countries grow and become
less dependent on climate sensitive economic
sectors- namely agriculture