You might think it unexpected or unlikely, but one of the places where social equity in development work recently became more apparent to me was during a workshop on Monitoring & Evaluation (M&E) of Climate Change Adaptation held in Lima, Peru in April 2019.

What is the M&E of adaptation really about?

Many people think that M&E work is mostly technical, quantitative and—let’s face it—rather boring. And they are probably right… except it shouldn’t be. It shouldn’t merely be a quantitative or a technical undertaking. In the context of climate change adaptation, M&E is simply a tool to support the understanding and prioritization of actions to assist decision making. It should make it easier for users and decision makers to learn, as time passes, what is working and what is not.

With an evolving understanding of what makes people vulnerable to climate change impacts and what to do about it, ideas around what should be monitored and evaluated also need to evolve in order to promote effective adaptation.

Ultimately, M&E is about understanding change: what has changed (or not), how it has changed and how much over a period of time.

Because causality is so hard to determine and remains mostly uncertain, and because change happens in ways that are often complex, difficult to pinpoint and intangible, these “hard-to-measure” elements become increasingly important to look at.

How we respond to climate change doesn't only depend on how hard the flood hits us

These elements can include things like how much faith the public has in the people and institutions working on climate change, the state and openness of family relationships, the feeling that one’s opinion matters, or even the (real or perceived) weight of social norms on people and households. All of these “social” aspects can play a big role in whether or not individuals and communities will actively engage in adaptation.

However, because they are difficult to measure, these metrics tend to be excluded from M&E systems. Even if they are included, it is difficult to know if the answers to these questions are accurate or in any way biased. It is no less complicated to link these statements to people’s and institutions’ decisions to act or to remain inactive.

Take the case of an example presented by one of the countries participating in the Lima workshop. In this country’s first attempt at adaptation M&E, they developed over 100 indicators. These indicators helped them understand vulnerability but failed to illustrate how any given adaptation action can reduce that vulnerability or increase the capacity of people and institutions. So they decided to go back to the drawing board and reconsider their approach. The value of an M&E system is intrinsically related to the guidance and learning it provides to better understand, prioritize and act on the (adaptation) challenges at hand.

Blog | Why Gender Matters in Climate Change Adaptation

Mr. M&E and Ms. Intangible can dance a beautiful dance.

As M&E is a lot about learning and improving, there are important limitations and opportunities to recognize in an M&E system in the adaptation planning process. For example, it is important to recognize both what the system can measure (e.g., progress in processes, discrete achievements in numbers and types of stakeholders reached, outputs published, radio spots aired) and what it can’t really or realistically measure (e.g., to what extent stakeholders value, will or can use the results of a capacity-building workshop in their lives)—and then find the way to bring these two together.

This is where the link between adaptation M&E and social equity resides. Like an airplane’s black box, an M&E system is, after all, an influential—if enigmatic—source of information that can largely impact where adaptation investments are made.

There is a saying: “Nobody is a prophet in their own land”—and sadly, this is often applicable in climate change adaptation work. Expert technical inputs tend to be more highly valued than the lived experiences or perceptions and knowledge of people directly affected by climate impacts.

Technicians building M&E systems must create them with elasticity so that they can tell a more complex, messier, if less certain, story; one that doesn't just spit out numbers and tidy graphs.

Unless the airplane’s black box is humanized and made more robust with a mix of different types of knowledge that include the technical and the social (to be simplistically binary), M&E findings will be myopic and do little service to advancing adaptation efforts, which should always aim to be inclusive and effective.

Further reading:

Brief | Kenya’s Monitoring and Evaluation of Adaptation: Simplified, integrated, multilevel

Brief | Colombia’s Progress in Developing a National Monitoring and Evaluation System for Climate Change Adaptation

Brief | Monitoring and Evaluation in the NAP Process: Opportunities, challenges and emerging solutions

Most farmers in Kenya are smallholders: they own and work on plots of land that are on average less than three hectares in size.

For these farmers, a changing climate poses a significant challenge to their lives and livelihoods.

The challenge is immense, but the farmers can adapt: they can plant shade trees to protect their coffee crops from the blistering sun; they can switch to drought-resistant strains of cassava and sorghum; or they can increase the efficiency of their water harvesting systems. Such climate-smart agriculture techniques can be vital to ongoing adaptation efforts for this crucial segment of the national economy. And Kenya’s National Adaptation Planning (NAP) process recognizes climate-smart agriculture as a key priority for enhancing the resilience of the country’s agricultural value chains. However, designing and implementing these responses will require not only the right level of capacities, but also the appropriate financing.

Many private enterprises—and especially micro, small and medium-sized enterprises—may have limited access to financial resources to pursue adaptation actions. For many private sector actors, including smallholder farmers, accessing the appropriate level and type of financing to pay for their adaptation efforts can be difficult, even if the benefits to engagement are apparent. They may need financing to pay for investments in climate-proofing their operations, for example, or to bring new goods and services to the market that support resilience. However, accessing that financing can be impossible for many: they may not have the required collateral or may not be able to support high interest rates.

Ensuring that private sector actors have access to reliable financing to pay for adaptation actions and that appropriate financial instruments are made available to them will be integral to enabling private investments in a country’s longer-term adaptation goals and programs, including the NAP process.

Governments can help here. They can, for example, provide incentives that promote adaptation investments, including tax breaks. They can offer risk guarantees and can use procurement contracts that help secure the demand for climate-resilient products and services. Governments can use mechanisms like taxes, levies, fees and royalties to raise funding that allows financial support to be offered for climate risk assessments; extension services; and start-up or seed financing for new products and services. They can also use a variety of de-risking instruments—including partial credit guarantees, political risk guarantees and blended finance—to help bear the risk of adaptation investments, particularly for large-scale investments.

Accessing the appropriate kind of financing is another key challenge. Financiers and enterprises may be operating in imperfect capital markets that are unable to efficiently allocate capital or transfer risk. It is important that a variety of financial instruments suited to different types of adaptation investments are made available—financing, for example, that can cover short-term and long-term investments, or internal and external investments in adaptation. For example, there is often a shortage of longer-term credit in many financial markets, inhibiting the ability of companies to finance the investments required to cope with longer-term or distant climate impacts.

Enabling private sector access to finance should be a key part of the NAP planning and implementation process. This could include the development by the government of a NAP financing or resource mobilization strategy, keeping in mind that it is crucial that private sector actors be included in drafting these strategies, to ensure their priorities and interests are heard and incorporated.

In Kenya’s NAP document, developing fiscal incentives for private sector investment in adaptation has been identified as a medium-term sub-action moving forward. The government is already working toward this aim, in part through its support of the Finance Innovation for Climate Change Fund (FICCF). FICCF has sought to overcome many of the barriers to financing adaptation in its promotion of private sector investments in climate-smart agriculture. The fund does so in part by providing repayable grants to microfinance institutions for on-lending to smallholder farmers and aggregators, so that they can invest in climate-smart technologies and practices. The Kenyan government is helping the initiative by providing reliable access to data and information on current and forecasted weather and climate.

Private sector engagement will be essential to the success of the NAP process, whether through direct financing or active participation in adaptation actions. Governments can play a key role in enabling this private sector engagement by promoting a number of enabling factors.

In addition to promoting information sharing (released last week) and ensuring access to appropriate financing, in the next few weeks, we will also explore other enabling factors, including capacity building and institutional arrangements.

This is the third installment of a five-part series on private investment in the NAP process.

Blog | What is the Business Case for Private Investment in the NAP Process? (Part one)

Blog | Knowledge is Power: Why information sharing is key to engaging businesses in the NAP process (Part two)

Blog | How Institutional Arrangements Can Engage Small Businesses in Climate Adaptation (Part four)

Among a lush stretch of clear lakes, flourishing vegetation and rolling hills, fields of tea plants grow and thrive for cultivation. Rwanda is the “Land of a Thousand Hills” and one of the world’s largest and best tea producers.

Agriculture continues to dominate Rwanda’s economy, employing more than 70 per cent of the country’s working population and accounting for a third of the national GDP. Tea and coffee are the key cash crops: together they make up 21 per cent of Rwanda’s total exports. And while the tea industry has been a major source of economic and social development, it is also vulnerable to some of the most severe impacts of climate change, including heavy rainfalls, increasing temperatures, floods and landslides.

Those operating in the sector increasingly recognize the urgent need to respond to these changing conditions. The business case is clear: without investments in reducing the vulnerability of the crop and their operations to climate change, the viability of their businesses will become increasingly uncertain. This applies to enterprises both large and small; safeguarding jobs and profits in the face of climate change will require their engagement in adaptation processes, including the National Adaptation Plan (NAP).

While the tea industry has been a major source of economic and social development, it is also vulnerable to some of the most severe impacts of climate change.

As is often the case, this is easier said than done. Globally, a lack of information on climate change is often a key reason why private sector actors do not invest in adaptation. Companies and investors often lack a detailed understanding of what climate change is, how it may impact their operations, and what options are available to them to increase their adaptive capacities and climate resilience. Climate information and data may be unavailable, inaccessible, of poor-quality or unevenly distributed. It may be hard to interpret and understand. It is imperative that governments work to break down these barriers to ensure that private enterprises understand the challenges and how to address them.

They can do this in a few ways. To start, governments should clearly communicate the business case for climate change adaptation, making it clear that climate change will significantly alter the economy and that there may be opportunities inherent in this transition, but also that inaction will bring with it serious risks. Saint Lucia’s NAP document, for example, calculated the cost of inaction in each sector, estimating that, by 2025, a lack of action on adaptation could cost the country up to 12 per cent of its GDP.

Once the gravity of climate change is communicated and understood, it is essential that private sector actors understand what it is exactly they are adapting to. Governments must play a key role in gathering and disseminating localized climate data and presenting it in a format that businesses—both small and large—can understand and use. Governments can do this in a variety of ways, including by supporting improved climate research at public universities, by developing and maintaining a network of hydro-meteorological stations and services, and by establishing a help desk to answer stakeholder questions on climate information.

Finally, governments must work to ensure that, once they understand the gravity of the challenge and its implications, businesses also understand the adaptation options available to them. This information must be communicated through appropriate channels. It may require exploring digitization or mobile technologies, or working closely with local governments, civil society organizations or business multipliers (such as a local Chamber of Commerce) to reach micro, small and medium-sized enterprises. If these options are clearly communicated, the private sector may be able to better quantify the benefits and the costs of action, to inform better decision making.

To this end, governments are not the only actors who can help overcome these key informational barriers. Civil society organizations, development partners and even other private sector actors can address these obstacles. Businesses, for example, can share or sell climate and related information, participate in information-sharing platforms, or communicate their own best practices and lessons learned in adaptation action.

Investments in adaptation and sustainable agricultural practices have made Sowarthé’s operations far more resilient to climate change.

In Rwanda, the Albertine Rift Conservation Society (ARCOS Network), a regional conservation organization, identified some of these key barriers to private sector engagement in adaptation. In response, it organized a series of private sector dialogues in 2017 and 2018 to promote information-sharing between local businesses, civil society organizations and government entities. Sowarthé, a major tea company operating in Rwanda, presented their adaptation efforts during these dialogues, making the business case for these investments: investments in adaptation and sustainable agricultural practices have made their operations far more resilient to climate change. Their participation in the dialogues encouraged other enterprises to participate and explore ways of integrating adaptation into their operations.

Private sector engagement in the NAP process specifically and adaptation more generally will be necessary for countries, communities and individuals to meet the challenge of the climate crisis. We will continue to explore other themes relating to private sector engagement in the coming weeks—including enabling conditions around adaptation financing, capacity building and institutional arrangements. But to start, private sector decision-making on adaptation should be built on a foundation of reliable, accessible and understandable climate information. In addition to a good cup of tea.

Any opinions stated in this blog post are those of the author and do not necessarily reflect the policies or opinions of the NAP Global Network, its funders, or Network participants.

This is the second installment in a five-part series on private investment in the NAP process.

Blog | What is the Business Case for Private Investment in the NAP Process? (Part one)

Blog | Paying For It: How governments can help the private sector overcome financial barriers to investing in adaptation (Part three)

Blog | How Institutional Arrangements Can Engage Small Businesses in Climate Adaptation (Part four)

Find out more about our work on Financing NAPs.

A few weeks ago, researchers in Hawaii found our atmosphere’s concentration of carbon dioxide is the highest it’s been in 3 million years. Back then, humans didn’t exist. Earth was significantly hotter. Sea levels were 15 metres higher.

We are heading toward a similarly unrecognizable world. The need to take bold climate change action could not be clearer.

A vital action Canada must take to avoid a future of runaway climate change is reform of fossil fuel subsidies. By distorting the market, these subsidies incentivize the emissions that cause climate change. As well as being fiscally irresponsible, they help lock in pollution and slow our transition to a low-carbon economy.

Over the past few months, there have been repeated high-level calls to end fossil fuel subsidies. The United Nations' recent biodiversity report, which projected one million species approaching risk of extinction, denounced these subsidies for their devastating impact on wildlife. World leaders, such as UN Secretary-General Antonio Guterres and the International Monetary Fund’s Christine Lagarde, have condemned fossil fuel subsidies as a driver of climate change.

Ten years ago, Canada and other G20 countries committed to phasing out fossil fuel subsidies, but progress has been slow. Our country is still the largest funder of fossil fuels per unit of GDP in the G7. While the federal government has taken steps to address subsidies, including committing to a peer review of its subsidies with Argentina, phasing out some subsidies such as the Atlantic Investment Tax Credit (AITC) and opening consultations on non-tax subsidies, more work is needed to meet the G20 goal—because our subsidies are still significant.

In past years, federal subsidies have reached more than CAD1 billion per year. From 2016 to 2018, the federal government committed to some reforms, including removing the AITC, but still provided hundreds of millions of dollars annually in fossil fuel subsidies

To be clear, ensuring access to affordable energy is important, particularly for vulnerable groups. However, the reality is that many Canadian fossil fuel subsidies go to producers, not consumers. Our priority should be reclaiming taxpayer dollars and foregone public revenue handed to private companies that promote fossil fuel production.

The kicker is that we don’t understand the full scope of this problem. Canadians don’t have access to information on who directly benefits from these subsidies, or just how much in taxpayer dollars is being spent. Numerous organizations have pushed for subsidy transparency, but pressure to act has also come from inside government. Earlier this year, the Commissioner of the Environment and Sustainable Development criticized Canada’s lack of transparency and progress on this issue.

In response, Environment and Climate Change Canada began a public consultation on non-tax subsidies, which will remain open until the end of June. This is a positive step, and the results could build support for subsidy reform and improved policies to transition to a low-carbon economy.

However, more needs to be done. Despite clear calls to action from the commissioner, Finance Canada has yet to begin a similar public review process or consultation on tax provisions that benefit the oil and gas sector.

Without adequately addressing subsidies, the federal government undermines benefits from its own commendable carbon pricing policies. Significant emission reductions will only happen if Canada addresses those policies that encourage emissions in the first place.

The economics are clear. With billions redirected away from harmful subsidies, Canada has an incredible opportunity to support issues that matter to Canadians, such as job creation, healthcare and education.

We can move toward a low-carbon economy and a clean future for Canadians and at the same time use savings from subsidies to support industry, workers and communities that are affected by this transition. Canada already has a model to do this: the Just Transition Task Force on coal gave clear policy options to chart a safe, sustainable future beyond fossil fuels.

The question is: are we ready to come clean?

This op-ed first appeared in The Hill Times on June 5, 2019.

The 2019 World Circular Economy Forum (WCEF) in Helsinki was like a breath of fresh air as summer begins.

Speakers shared possible forecasts on innovation, economic opportunities and social development, giving new dimensions to the environmental sustainability of this promising economic model.

The question of how you grow and protect jobs under a circular economy has received increased attention this year. It’s natural to expect changes in employment under a circular economy, but, to date, a lot of analysis has been relatively high-level, based on economy-wide estimates. There remain several unknowns. Which sectors are best suited to growth under a circular economy? Where might new jobs be found? Where will governments have to assist workers to transition to new jobs?

In new research conducted in partnership with the Finnish Innovation Fund, Sitra, IISD dug into some of these unknowns to better understand how jobs may be created or impacted in Finland, though the findings have international implications. IISD also sought to provide insights on which sectors may need supportive policies to ensure that a transition to a circular economy is consistent with just transition principles.

We looked at six sectors: buildings, textiles, food production, mining, forestry and electronics. The good news across the board is that these sectors are well suited for a shift to a circular economy in Finland. Some, such as the building and electronics sectors, are naturally conducive to job growth under a circular model, since circularity implies an increase in labour-intensive activities associated with reuse, recovery and recycling (e.g., electronics recycling or building retrofits to meet efficiency targets). 

Other sectors, such as mining or forestry, see job growth but at a smaller level, as there is a net benefit when considering reduced demand for raw materials weighed against a sector well suited to circularity (e.g., sustainable forest products, cobalt for electric vehicles) and the potential for industry to seek to increase exports to offset reduced domestic demand. This means that there isn’t a threat of job loss, despite shifts away from consumption and production of raw materials in Finland and a higher focus on efficiency and extended product life span.

Some sectors will require additional attention. For example, food production will be affected, as there will be slightly lower demand for products in a reduced-waste scenario. Measures can be adopted to offset impacts on domestic jobs, however, such as procurement and promotion of locally grown products.

At the forum, international thought leaders shared their feedback—one of the main benefits the WCEF delivers. Acting as host, Sitra representative Kari Herlevi highlighted the importance of inclusive employment in a circular economy. He spoke about the need to look beyond employment numbers to sustainable well-being and social impacts, emphasizing that the circular economy is not about competition between sectors but collaboration for a sustainable circular model.

Speaking for the Organisation for Economic Co-operation and Development (OECD), Shardul Agrawala highlighted often neglected areas of research. He pointed out that it’s not only about the number of new jobs, but also their quality, the new set of skills required, durability and wages. He also noted that, apart from the jobs that are created or ended, there are jobs that are restructured or redefined in a circular model.

Carlos Tapia, representing Tecnalia, spoke about his research at a European regional level. He examined the dynamics between material and technological providers, where the former is more rural and the latter more urban based. This necessitates not only considering what the economy is based on but also where those jobs are physically located. His work estimates that there are already 5.8 million workers in circular jobs in Europe today. 

Representing the World Economic Forum, Antonia Gawel highlighted parallels with the fourth industrial revolution, noting the potential disruption for workers who are less resilient to technological change. She said that nearly three quarters of companies she has spoken with note that the most important component for the circular economy is the skills and talent required, much more so than the location of raw material inputs.

Peter Wooders, the Energy Program Director for IISD, closed the event by looking to the future. Having identified some jobs shifts within a circular economy model, the next challenge will be to develop implementation plans and policies that support workers in a just transition to a circular economy.

This event was a sneak peek. IISD and Sitra will share the entirety of their research in the fall, complete with job modelling in all six sectors and an analysis of how trade-related employment will be affected by a circular economy. The work will also include suggestions for how any government—not just Finland—can help workers find inclusive, circular employment.

Climate change is the most critical challenge facing humanity today.

Experts are raising the alarm about this crisis with increasing anxiety. Clearly, urgent action is needed to reduce greenhouse gas emissions in order to limit the global temperature rise over the coming years.

But what about the people who are experiencing the impacts of climate change now, today? And those who will experience worsening impacts for the foreseeable future? 

For the first time, in 2015, the Paris Agreement under the United Nations Framework Convention on Climate Change established a global goal for adaptation to climate change. This was a recognition that we are committed to a certain amount of climate change and that investment in adaptation is both necessary and increasingly urgent. 

Climate change is inherently a justice issue—those who have contributed least to its causes will suffer most from its effects. At the global level, such as in the Paris Agreement, this is already recognized.

Infographic | Addressing Gender Equality in Climate Change Adaptation

This agreement, ratified by 185 countries, makes the links between climate change and human rights, poverty eradication and sustainable development. It also acknowledges the importance of gender equality and women’s empowerment, and calls for climate action to be gender-responsive. 

So how do these commitments play out in practice? With limited resources available for adaptation, particularly in poorer countries, how can we ensure that investments reach the most vulnerable women, men, girls and boys? How can we ensure that efforts to respond to this unprecedented challenge eliminate, rather than exacerbate, inequalities?

At the International Institute for Sustainable Development, we are increasingly focused on the gender implications of sustainable development policies and investments. Among other projects, we work with governments to promote planning for climate change adaptation that is gender-responsive. This comes down to three things:

Who matters?

Who decides?

Who benefits?

The right answer to all of these questions is, of course, everyone. Everyone matters when it comes to managing the impacts of climate change, particularly those who are least able to adapt. Everyone should have a say in how climate action occurs, and everyone should benefit from investments in adaptation in an equitable manner.

But when we are thinking about who matters, we need to recognize that people experience the impacts of climate change in different ways. A livestock herder in the Ethiopian lowlands has a much different experience of climate change than a civil servant in Addis Ababa. A woman in a poor rural household has a different experience of climate change than her husband.

Report  | Conducting Gender Analysis to Inform National Adaptation Plan (NAP) Processes: Reflections from six African countries

People have different adaptation needs, depending on where they live, how they sustain their livelihoods, and the roles they play in their families and communities. There are socially determined differences too—in opportunities, responsibilities and decision-making power—and all of these influence how vulnerable people are to climate change.

Without understanding these dynamics—which are often influenced by gender—there is a risk that the people with the greatest need for adaptation will be left out.

Effective adaptation considers the differing needs of women and men, as well as marginalized groups, to ensure that investments are targeted where they are needed most.

The reality in many countries is that women are under-represented in decision-making in areas relevant to climate change adaptation. For example, in many African countries, the number of women in senior positions in the government is concerningly small. And at the household level, decision-making power still often rests with men.  

If women are not involved in decision-making, how likely is it that their interests will be represented?

Effective climate change adaptation brings everyone to the table, recognizing the value of their knowledge and their potential as agents of change. The process of adaptation planning is designed to make it possible to invest in concrete actions that reduce vulnerability to climate change.

However, there is a risk that adaptation investments actually reinforce existing wealth and power structures, rather than benefiting the most vulnerable women and men. Adaptation is effective when it is equitable, providing opportunities and benefits for all people.

The urgency of adapting to climate change has never been clearer. We have an opportunity, through global commitments like the Paris Agreement, to rapidly scale up action in this area. For this to be effective, we need to start from the premise that everyone matters—rich or poor, farmer or civil servant, woman or man. 

We need to bring diverse voices, including those that are typically excluded, into decision making to identify the best solutions for adapting to climate change. And we need to ensure that investments in adaptation provide equitable benefits for people of all genders and social groups. This is the only way we can build families, communities and societies that are resilient to the impacts of climate change.

Climate change is altering where rain falls, how much of it falls, and when it falls, with consequent impacts on where many of us can live and work.

We’re battling more frequent and intense hurricanes and wildfires, while rising sea levels threaten the long-term viability of coastal communities. It’s affecting ecosystems, bleaching coral reefs, threatening fish populations, melting glaciers and displacing species.

Greenhouse gas emissions are the principle culprit, and the mining sector—as a significant user of energy resources—is a key industry contributor. In Australia, for example, the mining sector consumes 500 petajoules of energy per year, which amounts to approximately 10 per cent of the country’s total energy use. Most of this energy is supplied by diesel (41 per cent) and natural gas (33 per cent), and the total amount of energy used in Australia each year is growing with increasing mining volumes.

Many companies are responding to the climate challenge by investing in efforts to reduce their greenhouse gas emissions, contributing to global efforts to mitigate climate change. Glencore’s Raglan nickel mine in Quebec and Rio Tinto’s Diavik diamond mine in Northwest Territories—both in Canada—have installed on-site wind turbines to offset some of their reliance on diesel. Newcrest’s Lihir gold mine in Papua New Guinea draws a significant portion of its energy from geothermal sources. IAMGOLD’s Rosebel gold mine in Suriname and B2Gold’s mine in Namibia have installed solar grids on site, which will be transferred to local communities to meet their energy needs once the mine closes. Goldcorp is pursuing full electrification at its Borden Lake deposit, and plans to make the mine Canada’s first all-electric operation, and the world’s first diesel-free hard rock mine. Much more needs to be done, but these are encouraging steps in the right direction.

In the face of the climate crisis, there is an equally urgent need for the mining sector to adapt to the impacts of climate change, for a number of reasons. The sector is a significant user of local water and energy resources, both of which will be impacted by a changing climate. Operations and supply chains are exposed to extreme weather events, including cyclones, flooding and drought. Employee health and safety could be threatened by rising temperatures. Sea levels and storm surges could challenge the viability of coastal and offshore mining. Investments in climate change adaptation in and around mine sites will help the mining sector manage the risks that climate change poses to operations and supply chains. Such investments can also help to build the adaptive capacities of communities adjacent to mine sites.

What can governments do to help those operating in the mining sector take action on climate change?

Generate and share climate change information: Governments can play a crucial role in generating and sharing information on climate change with private sector stakeholders to address knowledge gaps and promote best practices.

Develop supportive institutional arrangements: Governments can establish institutional arrangements that involve the private sector in national-level planning and action on climate change, including the country’s National Adaptation Planning (NAP) process and its Nationally Appropriate Mitigation Actions (NAMAs).

Build capacities: Mining companies may lack the technical capacities needed to adapt their operations in the face of a changing climate and to reduce their emissions. Governments can provide private sector actors with capacity building and training to better equip them to understand and act on climate change information.

Establish a supportive policy and regulatory framework: Governments should develop policies, laws and regulations that encourage and support investments in mitigation and adaptation within the mining sector, including through the permitting process.

Finance adaptation: Financial barriers can prevent mining companies from engaging in mitigation and adaptation processes. Governments can use financial incentives as motivation for the private sector to invest in new products or operational methods that lower their emissions or increase their climate resilience.

Governments have a crucial role to play in supporting the transition toward a low-carbon economy and increased climate resilience in the sector. They must ensure that enabling conditions are in place within their jurisdictions that allow and encourage mining and mineral exploration companies to invest in renewable energy and adaptation activities. Well-planned and implemented mitigation and adaptation actions from the mining sector, as well as from the private sector more broadly, will help countries achieve a number of their international commitments, including Sustainable Development Goals 7 and 13, the Nationally Determined Contributions agreed upon under the Paris Climate Agreement, and the Sendai Framework for Disaster Risk Reduction. 

Businesses around the world—big and small, from large-scale banks to smallholder farmers—invest in climate change adaptation every day.

They may not label it as such, but as they respond to droughts, recover from floods, or plan ahead for the next cyclone season, many are strengthening their operation’s resilience to current and future climate change.

In order the make these investments, which include time, capacities and money, there must be a strong business case for doing so. Fishers, farmers, miners, bankers and others will weigh the costs and risks of the investment against its expected returns—returns that can include more certainty in their operations, a more secure supply chain or a new market opportunity.

While investment in adaptation may seem like good business practice, it is not always an easy argument to make: the risks associated with climate change may be unknown or misunderstood by investors; the cost of action may be high; returns on investments may be uncertain; adaptation options may be unclear; or indicators of success may be difficult to define. This is particularly the case for small business owners in developing countries; for them, resources are often already stretched, and investments in immediate day-to-day operations take precedence over concerns far down the road.

This will be a key challenge as developing country governments formulate and begin to implement their National Adaptation Plans (NAPs). Achieving the ambitious and necessary adaptation pathways and goals contained in the NAPs will not be possible without the participation of the private sector, among other actors. They are key engines of economic growth and will be relied on to create the jobs needed to support adaptation, to develop the products and services needed for societies to become more climate-resilient, and to finance— directly or indirectly—many adaptation actions.

To enable the strategic and well-informed engagement of the private sector in climate change adaptation activities—including as designers, implementers, financers or evaluators— governments will need to establish and communicate the business case for investing in adaptation. Doing so will help to incentivize much-needed support and investment for the NAP process.

So what is the business case for private sector actors—from multinational corporations to smallholder farmers—to invest in the NAP process?

For one, direct losses from natural disasters between 1998 and 2017 cost morethan USD 2.9 trillion—77 per cent of which were climate-related. In 2018 alone, natural disasters led to more than USD 225 billion in economic damages globally, according to a report from the National Oceanic and Atmospheric Administration. As climate change continues to increase the frequency and severity of extreme weather events, adaptation action will be necessary to maintain international business continuity and growth.

Moreover, at the most basic level, adapting to the impacts of climate change—whether at the national, subnational or community level—cannot be the responsibility of national governments alone. While public financing is crucial, particularly during the development phases of the NAP process, it will not be enough to address all adaptations needs.

The process of establishing a business case for adaptation investment often needs to be context- and company-specific. In this sense, threatening numbers about global catastrophe—however pertinent—may not be enough to effectively engage the private sector in a country’s NAP process.

Despite the aforementioned challenges, many companies have been able to establish this business case and have initiated support for and investments in adaptation, through the NAP process and otherwise. Private sector actors have done so for three key reasons.

To manage risks for business continuity and reputation.

Climate change can pose serious risks to the activities of businesses. Physical risks—including drought, floods and severe weather events—can damage relevant property and disrupt trade. As a result, some companies are investing in adaptation to climate-proof their supply chains, protect their operations and avoid future loss.

In Madagascar, for example, companies including Danone, Mars, Firmenich and Veolia are providing EUR 2 million to help local farmers—representing more than 6,000 hectares of vanilla production—use more sustainable farming practices. In doing so, these partners are helping to increase the adaptive capacity of smallholder farmers, while managing climate risks in the supply chains of their products.

To capitalize on new markets and business opportunities.

A 2015 survey by AXA Group and UN Environment found that 53 per cent of businesses in developed and emerging markets believed that climate change represented an opportunity for their businesses. Developing and distributing new goods and services that respond to local threats posed by climate change—climate-resilient seeds, for example, or equipment for early-warning systems—represents a key opportunity to simultaneously profit and help local populations adapt.

To comply with policies, regulations, and investors’ interests.

Finally, some financiers and enterprises are investing in adaptation in response to ongoing or upcoming policies, regulations or investor interests. EU-registered pension funds, for example, are now required to consider and disclose climate risks in their investment decisions. This disclosure requirement is pushing companies to make smarter investments in adaptation in order to reduce their exposure to climate risks.

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Governments have to work with a range of partners—from civil society and private sector actors to bilateral and multilateral development agencies—as they embark on the NAP process. To engage with the private sector in particular, governments must understand and communicate the business case for investing in adaptation; doing so effectively will mean working with partners in the media, as well as business associations and chambers of commerce. This is a good starting point, but more will also need to be done; policy-makers and practitioners will have to put in place key enabling factors to encourage and facilitate private sector engagement in all phases of the NAP process.

Over the next month, the NAP Global Network will be taking a closer look into these key enabling factors. In our next blog, we will explore how effective and meaningful information-sharing can enable private sector engagement in the NAP process. We look forward to sharing it with you.

This post is the first of our five-part blog series on engaging the private sector in national adaptation planning processes. 

Blog | Why information sharing is key to engaging businesses in the NAP process (Part two)

Blog | Paying for it: How governments can help the private sector overcome financial barriers to investing in adaptation (Part three)

Blog | How Institutional Arrangements Can Engage Small Businesses in Climate Adaptation (Part four)

Find out more about our work on Financing NAPs.

Our oceans and fish stocks—and the populations that depend on them—all suffer from the consequences of overfishing.

According to the Food and Agriculture Organization of the United Nations, 33 per cent of the world's assessed fish stocks are considered overexploited, while 60 per cent are exploited at their maximum sustainable level. Perhaps even more worrying, despite a growing global awareness of the problem, the trend is not improving. The share of overexploited stocks is steadily increasing: it has tripled since the 1970s.

In addition to serious environmental impacts, there are social, economic and even cultural costs to this alarming trend. Of course, many fisheries are also well-managed, but as we witness this general decline of the health of fish stocks, the time has come for concrete actions.

Fisheries subsidies are a major contributing factor. By artificially reducing the costs of fishing, capacity- and effort-enhancing fisheries subsidies allow vessels to take ever more fish on longer trips, ever further from land. Unfortunately, the amount of fish in the ocean does not extend in the same way. That is why the International Institute for Sustainable Development (IISD) has chosen to support the current World Trade Organization (WTO) negotiations to effectively discipline harmful fisheries subsidies, in support of Sustainable Development Goal target 14.6. Along with the Pew Charitable Trusts, IISD is delivering analysis and convening support to WTO members to help them reach their goal of an agreement on fisheries subsidies by December 2019.

In parallel with activities in Geneva to support and inform the negotiating process more directly, a series of workshops have taken the conversation to the negotiators’ home regions. In a non-negotiating setting, we have brought together policy-makers, experts and stakeholders from academia, the fisheries sector and civil society for an in-depth discussion of WTO fisheries subsidies negotiations. Like the Caribbean and Latin American workshops, our recent session in Senegal on West African issues offered invaluable insights, illustrating the spectrum of concerns these negotiations raise for the region.

Illegal, unreported and unregulated fishing, overfished stocks, as well as overfishing and overcapacity more broadly all pose real challenges in West Africa. The magnitude of fishing by foreign fleets in West African waters and the fundamental importance of artisanal fishing for people in the region (with a special nuance for women active in the processing sector) highlight both the relevance of WTO negotiations and the variety of issues at play. The event also offered stakeholders two new tools for considering subsidy reform: a draft case study commissioned by IISD on the Sardinella fishery off the coast of West Africa gave participants a real-world model of the possible impacts of new WTO rules, while an interactive toolkit developed by Pew let attendees consider the larger biological and economic implications of prohibitions being negotiated at the WTO.

Throughout the workshop, the message crystalized that something must change because the current situation is not tenable over the long term. The WTO negotiations are a real opportunity to not only rethink industrial and artisanal fisheries subsidies, but to take meaningful action that renews the health of our oceans and supports the livelihoods of the fishing communities and populations who depend on them.

During the past decade, there has been widespread agreement about the benefits of reforming subsidies to fossil fuels, as endorsed by international commitments and discussions within international forums.

Encouragingly, between 2012 and 2016, fossil fuel subsidies (FFS) to consumers almost halved, from USD 504 billion to USD 260 billion. This reduction was due to a combination of reform efforts alongside a decrease in international prices for crude oil, which provided a window of opportunity for action and allowed governments to implement long-awaited reform plans.

In a review of reform efforts, the Global Subsidies Initiative (GSI) has mapped countries implementing some level of FFS reform between 2015 and 2018. The map traces policy changes that have contributed to declining fuel subsidies. Some fifty countries implemented some level of policy change, from fuel price changes and deregulation to energy tariff reforms. While this map is not an exhaustive picture of all subsidy policy change and does not cover all subsidies within a country, it does illustrate the broad engagement of countries, at a national level, in tackling the FFS issue.

Despite these reforms, the International Energy Agency (IEA) found that consumer price support for subsidies increased slightly in 2017, reflecting pressure on previously implemented reforms due to the rise of oil prices in the international market (Figure 2). The IEA finds that consumer FFSs (price-gap methodology) increased from USD 270 billion in 2016 to USD 302 billion in 2017. The increase is linked to a change in the average oil price from USD 42 (2016) to USD 52 (2017) per barrel. However, the 12 per cent increase in consumption subsidies was considerably less than the 25 per cent increase in oil price; this indicates that there is still a level of ongoing reform that has taken place and is being maintained. In this context, governments will need strong encouragement and support to maintain existing, and introduce additional, energy sector reforms, enabling domestic prices to reflect changing international ones. Reforming FFSs and shifting to renewable energy and increased energy efficiency offers governments protection from the volatility of international oil prices. 

Moreover, the IMF recently released a working paper with updated global estimates of consumer price support for FFS estimates using pre-tax and post-tax subsidies approaches. The latter differs from the IEA method since it includes un-priced externalities arising from fossil fuel usage, such as GHG emissions and emissions of air pollutants, as well as social costs associated with driving (e.g. traffic congestion). According to the authors, these costs are 15–20 times larger than pre-tax subsidies, which stood at USD 296 billion in 2017. They reached USD 5.2 trillion in 2017, up from USD 4.7 trillion in 2015, illustrating starkly the far broader negative costs and impacts from fossil fuels on the environment and the economy as a whole. Furthermore, the research highlights that there has not been a sharp increase in the pricing of environmental costs at the global level, despite the 2015 Paris Agreement and implementation of reforms in several countries (see Figure 3).

Yet, even without including huge externalities, GSI estimates that the scale of subsidies to fossil fuels is still significant, at around USD 400 billion in 2017 (USD 300 billion per year for consumer subsidies and between USD 70 billion and 100 billion for producer subsidies which are consistently underreported).

Implementing and acknowledging the importance of both FFS reform and the correct pricing of fossil fuels are crucial, even more so when the world is made aware of the high costs that fossil fuels imply. When envisioning next steps, countries can look at successful reforms and pricing efforts from other countries around the globe, for example, from research and networks that allow for knowledge exchange and provide important lessons for governments pursuing FFS reform.

India, for instance, has been succeeding in many different aspects when phasing out FFSs. Between fiscal year (FY) 2014 and FY 2017, the country cut subsidies to oil and gas by 76 per cent, from USD 26.1 billion to USD 5.5 billion, thanks to various reform efforts combined with a decrease in international oil prices. During the same period, the government support to renewable energy grew almost six times—from INR 2,608 crore (USD 431 million) in FY 2014 to INR 15,040 crore (USD 2.2 billion) in FY 2017. Meanwhile, in 2015, liquefied petroleum gas subsidies begun to be redirected straight to the consumers’ bank accounts, putting in place the world’s largest benefit transfer scheme as a way to avoid diversion and eliminate duplicate connections and non-existent users. Moreover, the country has also implemented communication campaigns to assess consumers’ views, which is a key part of delivering successful reforms.

On the other hand, some countries have been struggling to maintain efforts to phase out FFSs for many different reasons. In 2015, Indonesia completed its reform of gasoline and diesel subsidies, saving up to USD 15.5 billion. However, the country has not implemented fuel price changes in a consistent and regular manner, with gaps between when prices are adjusted growing over time. Prices were last locked in 2019 in the leadup to recent presidential elections. More importantly, the island country has continued to invest in coal power plants, going against the current global trend to move toward cleaner sources of energy.

Whatever the case, the importance of FFS reform is clear and unanimous: FFSs are socially regressive, failing as a social welfare policy tool and potentially preventing government funding of more sophisticated social security nets, including investment in health and education. Furthermore, such subsidies lock us into a high-carbon future and their elimination could contribute to reducing carbon emissions, as stated in the Paris Agreement. Despite considerable efforts to reform FFSs, the absolute value of subsidies increased in 2017, both in subsidies captured within the economy and those yet unpriced, which brings massive broader costs to society (the externalities). It is therefore crucial that countries persist with efforts to phase out subsidies to fossil fuels and usher in more efficient social welfare and sustainable energy systems, and that they are supported strongly in their endeavours to do so by the international community.