The role for public policy in adaptation

Given the combined public and private good nature of the benefits of adaptation in agriculture and related sectors, what is the role for public policy in tackling these climate change risks? This chapter considers rationales for public intervention in adaptation.

The public-private issue is important since it represents real trade-offs in policy. Governments in Europe, for example, continue to intervene in agricultural markets to reach public policy objectives of conservation, food security and farming and rural sector income support through the Common Agricultural Policy, even though the benefits may actually accrue to capital values in land (Allanson and Hubbard, 1999) But there may be less willingness to invest in climate change responses if all the benefits are perceived to be "private" - i.e. accrue to individual farmers, insurance companies or emerging weather futures markets. The mix of private and public good climate change impacts is the landscape against which government responses and investment priorities are determined.

The first rationale for promoting adaptation is to protect those parts of the agricultural sector and communities in rural areas that have the least ability to cope. As discussed above, agricultural regions facing climate change are subject to multiple stresses associated with market re-structuring, marginal productivity, and in the case of developing countries, lack of public infrastructure, high disease burden and many other factors that limit the ability to adapt. In addition, adaptation focussed on the most vulnerable is implicit in the Articles of the Framework Convention on Climate Change (Adger et al., 2006), and is the basis for deriving potential international transfers to developing countries for adaptation (Baer, 2006). A survey of adaptation responses across the world by Adger et al. (2006) finds that adaptation is often directed towards greatest resource efficiency, rather than focussed on vulnerability reduction. Enhancing adaptive capacity, particularly that of disadvantaged rural populations, is likely to be more fruitful than identifying specifically how a given group in a particular area will be affected by climate change (Agrawal, 2008).

The second public policy response is the provision of high-quality information on the risks, vulnerability and threats posed by climate change. Such information includes scenarios of change at the global scale, as discussed in this report. But it also involves significant investment in the incorporation of climate information into land-use planning and other forms of regulation, hence the need for policy integration across government sectors, such as agriculture, planning and health, where climate change risks interact.

The third area of public policy response is in the provision and enhancement of the public good aspects of agricultural production and land-use. There are direct and demonstrable interactions between habitat and species protection with climate change impacts on water and vegetation and agricultural response (as demonstrated by Berry et al., 2006 [for Europe]). Climate change impacts represent enhanced reasons for agri-environment policies and incentives to promote biodiversity conservation within the farming landscape, given the potential for habitat decline and species extinction throughout the world. Policies to promote food security at global and regional scales are also imperative, given the potential threats, and most importantly the potential uncertainty, in aggregate production in key regions such as South Asia and Russia.

In planning an adaptation strategy for the EU, the White Paper on Adaptation (European Commission, 2007) seeks to "define the role of the EU in adaptation policies so as to integrate adaptation fully into relevant European policies, to identify good, cost-effective practice in the development of adaptation policy and to foster learning".

The White Paper provided a first attempt at addressing the appropriate roles for public policy, arguing for a multi-level approach to adaptation governance in the EU, with specific roles at the European, national, regional and local levels. The main role at the European level was seen as the integration (or mainstreaming) of climate adaptation into policies across sectors, where the EU has specific competencies, including agriculture, fisheries, water, biodiversity, health, transport and energy.

Swart et al. (2009) analyse National Adaptation Strategies in ten European countries (Denmark, Finland, France, Germany, Latvia, the Netherlands, Portugal, Spain, Sweden and the United Kingdom). They find that the countries studied are adopting a variety of approaches based on their own cultural norms, political systems, and assessment of the risks posed by climate change. The report also identifies a number of common strengths and weaknesses in these plans, including a lack of co-ordination between sectors, and cross-sectoral conflicts. In addition, the national focus of most strategies ignores the threats (or opportunities) through global systems and networks.

Aaheim et al. (2008) argue that the role for public policy relating to adaptation covers seven objectives:

• Information, knowledge and learning;

• Early-warning and disaster relief;

• Facilitating adaptation in the market;

• Mainstreaming climate policy;

• Infrastructure planning and development;

• Regulating adaptations spillovers; and

• Compensating for the unequal distribution of climate impacts.

Given these policy imperatives for adaptation there is also a need to recognise how adaptation fits with other policy objectives of sustainability and whether certain adaptations themselves are desirable (see also Adger et al., 2005; Mendelsohn, 2000; Hanneman, 2000; Burton et al., 2002; Berkhout, 2005). Adaptation to climate change therefore can be evaluated through generic principles of policy appraisal seeking to promote equitable, effective, efficient and legitimate policies and investments harmonious with wider sustainability (Adger et al., 2003; 2005). Defining success simply in terms of the effectiveness of meeting these objectives, however, is not sufficient for two reasons. First, whilst an action may be successful in terms of one stated objective, it may impose externalities at other spatial and temporal scales — what appears successful in the short term turns out to be less successful in the longer term. The rush to install domestic and commercial air-conditioning in western Europe following summer heatwaves, for example, represents an effective adaptation for its adopters, but is based on energy- and emissions-intensive technologies and therefore may not be sustainable in the long term (unless the energy is derived from renewable sources). Second, whilst an action may be effective for the adapting agent, it may produce negative externalities and spatial spillovers, potentially increasing impacts on others or reducing their capacity to adapt. Such adaptations are known in the literature as maladaptations. This may be particularly relevant in agriculture, where the success of farm-scale adaptations (in terms of both private and public good outcomes) is dependent on responses in contiguous areas of land on other farms.

Effectiveness relates to the capacity of an adaptation action to achieve its expressed objectives. Effectiveness can either be gauged through reducing impacts and exposure to them or in terms of reducing risk and avoiding danger and promoting security. The effectiveness of an adaptation action may depend on the future uncertain state of the world. Two key indicators of the effectiveness of an adaptation action are therefore robustness to uncertainty and flexibility, or ability to change in response to altered circumstances.

Efficiency in adaptation requires avoidance of under- or over-investment in adaptation technologies. In agriculture some investments in buildings, water infrastructure and land improvement are long-term investments where over- or under-shooting is a distinct possibility (Mendelsohn, 2000). These are known as the costs of misplaced foresight. While there is presently some theoretical research on adaptation to climate change as a learning strategy (Kelly et al., 2005; Ingham et al., 2007), this issue has yet to be examined in any detail in agriculture. Kelly et al. (2005) estimate so-called "adjustment" costs for farming regions in the United States' Midwest, simulating learning from one climate change state to the next through assuming a restricted profit function. They found that these adjustment costs were 1.4% of land rents for one simulated unanticipated climatic shock. A further issue in the efficiency of adaptation response is the valuation issues surrounding public good provision. Any assessment of the efficiency of an adaptation that incorporates only goods with market proxies (such as property, human health, or economic production) risks seriously underestimating both costs and benefits. Government-led adaptation to climate change often stresses public good elements of the problem such as ecological and aesthetic impacts and non-traded ecosystem goods and services, as much as private market impacts (Fankhauser et al., 1999; Azar, 1998).

Equity of outcome in adaptation intervention and legitimacy of decision-making are both central to the resilience and ultimate perceived success of adaptation. They are important for instrumental reasons: development which is inequitable undermines the potential for welfare gains in the future, and developments which lack legitimacy have less chance of full implementation (see Cohen et al., 2004; Adger et al., 2006).

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