The Adaptation Principles: 6 Ways to Build Resilience to Climate Change

By Dr. Stephane Hallegatte, Dr. Jun Rentschler, Dr. Julie Rozenberg 25 February, 2021

Adaptation cannot be an afterthought to development. World Bank's Dr. Hallegatte, Dr. Rentschler & Dr. Rozenberg share 6 adaptation principles

Climate change not only threatens progress but can reverse success of the past; climate risks can't be reduced to zero so govts must take decisive action to help firms & people
Govts should support rapid & inclusive development, while protecting public investments; govts can also boost adaptive capacity by making climate risk info & financing available
Climate change will affect the macroeconomic situation, affect all sectors thus high level strategic planning is a must; a set of 111 indicators help govts track progress

The article was first published in The World Bank as a feature story in Nov 2020. Click here to view.

Over the past decades, Uganda made remarkable progress in reducing poverty and boosting socio-economic development. In 1992, some 56 percent of the population was living in poverty. By 2016, that figure had fallen to 21 percent. Yet, the global economic ramifications of the COVID-19 pandemic and the effects of climate change are forcing the country to confront new challenges: shocks not only threaten further progress but can reverse hard won successes of the past.

Around 72 percent of Uganda’s labor force works in agriculture – a sector that is highly climate sensitive. Take coffee: Uganda is Africa’s second largest exporter of coffee. Over 17 percent of Uganda’s exports coming from just this high-value crop. Recent droughts, however, are estimated to have destroyed half of all coffee yields.

Without adaptive measures, only 1% of Uganda’s coffee producing land is expected to continue…

…coffee = >17% of Uganda’s exports

In the coming decades, changing climatic conditions are expected to pose profound challenges to Uganda’s coffee sector: without adaptive measures, only 1 percent of Uganda’s current coffee producing land is expected to be able to continue production. And coffee is just one sector that could face mounting impacts from climate change: around 2.3 million poor people in Uganda also face high levels of flood risk.

In countries around the world, climate change poses a significant risk threatening the lives and livelihoods of people. These risks cannot be reduced to zero, which means governments must take decisive action to help firms and people manage them.

Doing so requires planning ahead and putting in place proactive measures that not only reduce climate risk but also accelerate development, and cut poverty, according to a new report, The Adaptation Principles: A Guide for Designing Strategies for Climate Change Adaptation and Resilience.

“Adaptation cannot be an afterthought to development. Instead, by integrating it into policy thinking up front, governments can catalyze robust economic development while also reducing vulnerability to climate change,” says Lead Economist, Stéphane Hallegatte, who co-authored the report with Jun Rentschler and Julie Rozenberg, all of the World Bank.

The report lays out six universal “Principles of Adaptation and Resilience” and 26 concrete actions that governments can use to develop effective strategies. To support the development and design of these actions, it also includes 12 toolboxes with methodologies and data sources that can ensure that strategies are evidence-based.

1. Build resilient foundations with rapid and inclusive development

Poverty and the lack of access to basic services—including infrastructure, financial services, health care, and social protection—are strong predictors of vulnerability to climate change. To put it another way: the poorer communities are, the more climate change will affect them. No adaptation strategy can be successful without ensuring high-vulnerability populations have the financial, technical, and institutional resources they need to adapt.

2. Help people and firms do their part

It’s critical to boost the adaptive capacity of households and firms: many already have incentives to adapt, but they need help overcoming obstacles, ranging from a lack of information and financing, to behavioral biases and imperfect markets.

To boost adaptive capacity, govts can help households and firms overcome obstacles – incl. lack of info & financing, imperfect markets

Governments can make information on climate risks available, clarify responsibilities and liabilities, support innovation and access to the best technologies, and ensure financing is available to all especially for solutions that come with high upfront costs. And they will also need to provide direct support to the poorest people, who cannot afford to invest in adaptation but are the most vulnerable to experiencing devastating effects of climate change.

3. Revise land use plans and protect critical infrastructure

In addition to direct support to households and businesses, governments must also play a role in protecting public investments, assets, and services.

Power & water outages + transport disruptions will cost more than $390bn/yr in developing countries

Power and water outages and transport disruptions are estimated to cost more than $390 billion per year already in developing countries. But if countries have the right data, risk models, and decision-making methods available, the incremental cost of building the resilience of new infrastructure assets is small—only around 3 percent of total investments.

Urban and land use plans are also important responsibilities of the public sector, and they influence massive private investments in housing and productive assets, so it is vital these adapt to evolving long-term climate risks to avoid locking people into high-risk areas.

4. Help people and firms recover faster and better

Risks and impacts cannot be reduced to zero. Governments must develop strategies to ensure that when disasters do occur, people and firms can cope without devastating long-term consequences, and can recover quickly.

Preparation such as better hydromet data, early warning and emergency management systems reduces physical damage and economic losses—for example, shuttering windows ahead of a hurricane can reduce damage by up to 50 percent. The benefits of providing universal access to early warning systems globally have been repeatedly found to largely exceed costs, by factors of at least 4 to 10.

And then, financial inclusion, such as access to emergency borrowing, and social protection are essential ways to help firms and people get back on their feet. Adaptive social protection systems, which can be rapidly scaled up to cover more people and provide bigger support after a disaster, are particularly efficient, but they rely on delivery and finance mechanisms that have to be created before a crisis occurs.

5. Manage impacts at the macro level

Coping with climate change impacts in one economic sector is already complicated. Coping with climate change impacts in all sectors at once requires strategic planning at the highest levels.

Through many impacts in many sectors —  from floods affecting housing prices to changes in ecosystems affecting agriculture productivity — climate change will affect the macroeconomic situation and tax revenues.

Climate change will affect the macroeconomic situation, affect all sectors…

…requires strategic planning at the highest levels

Some impacts on major sectors (especially exporting ones) can affect a country’s trade balance and capital flows. And spending needs for adaptation and resilience need to be added on top of existing contingent liabilities and current debt levels to create further pressure on public finances. The combination of these factors may result in new risks for macroeconomic stability, public finances and debt sustainability, and the broader financial sector. Governments will need to manage these risks.

Because of the massive uncertainty that surrounds macroeconomic estimates of future climate change impacts, strategies to build the resilience of the economy, especially through appropriate diversification of the economic structure, export composition and tax base, are particularly attractive over the short term.

6. Prioritise according to needs, implement across sectors and monitor progress

Governments must not only prioritise actions to make them compatible with available resources and capacity; they must also establish a robust institutional and legal framework, and a consistent system for monitoring progress.

Main objective of an adaptation strategy is to ensure all govt depts adopt/mainstream the strategy in all decisions…

The main objective of an adaptation and resilience strategy is not to implement stand-alone projects: it is to ensure that all government departments and public agencies adopt and mainstream the strategy in all their decisions and that governments continuously monitor and evaluate the impact of their decisions and actions, so they can address any challenges and adjust their actions accordingly.

The report provides a range of practical tools that can help governments implement adaptation strategies. For instance, economic analysis methodologies can help to select the most important interventions, and budget tagging methods can ensure spending is consistent with expectations.

…a set of 111 indicators is provided to enable govts to track progress

A set of 111 indicators is also provided to enable governments to track progress toward greater resilience, to identify areas that are lagging behind, and to prioritise effective measures. It also sheds light on how the COVID-19 pandemic and subsequent economic crisis can affect the design of an adaptation and resilience strategy, recognising how it has changed the development landscape in all countries.

The impacts of climate change are already here and fast increasing and there is no silver bullet to prevent them. Proactive and robust actions ahead of time, however, can go a long way to helping people and communities so that when a natural disaster strikes, not only are they better prepared to respond, but hard-won development gains are not lost.

Further reading

  • Sovereigns At Risk: Lots Of Capital In Vulnerable Spots – Clustered nature of rising coastal threats plus lax govt action put APAC sovereigns at risk. CWR’s analysis of GDP, trade, markets & bank loans reveal intense concentration of risks. As no-sense strategies pervade, see who’s in CWR’s watchlist
  • Capital Threats Remain Post COVID – There is no vaccine for climate & water risks, yet some in the financial sector are still burying their heads. CWR’s Dharisho Mirando reminds us how our capital is at risk & steps we can take to reduce them while going green
  • It Happened – Central Banks And Water Risks – Half a dozen new reports by the NGFS means that CWR has achieved a key milestone in embedding water risks in finance. Debra Tan and Dharisha Mirando expand on these game-changing moves by the central banks. The credit evolution has started
  • Asia, Why On Earth Would We Leave Our Future To G7? – With G7’s absent leadership & inability to plan for pandemics, CWR’s Debra Tan calls for Asia to step-up & lead the global fight against our climate crises. Tycoons, think about it – what’s the point of building empires that will kill your grandchildren?
  • Bankable Nature Solutions: A Case Study – Is there a way to stop land subsidence, create climate resilience & raise farmers’ incomes? WWF’s Thomas Gomersall & Jean-Marc Champagne say the integrated rice & shrimp model does exactly that

More on Latest

Dr. Stephane Hallegatte
Author: Dr. Stephane Hallegatte
Stéphane Hallegatte is the lead economist of the World Bank Climate Change Group. He joined the World Bank in 2012 after 10 years of academic research. His research interests include the economics of natural disasters and risk management, climate change adaptation, urban policy and economics, climate change mitigation, and green growth. Mr. Hallegatte was a lead author of the 5th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). He is the author of dozens of articles published in international journals in multiple disciplines and of several books. He also led several World Bank reports including Shock Waves: Managing the Impacts of Climate Change on Poverty in 2015, Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters in 2016, and Lifelines: The Resilient Infrastructure Opportunity in 2019. He also led the writing team of the Stern-Stiglitz High-Level Commission on Carbon Prices. He was the team leader for the World Bank Group Climate Change Action Plan, a large internal coordination exercise to determine and explain how the Group will support countries in their implementation of the Paris Agreement. In 2018, he received the Burtoni Award for his work on the link between climate change adaptation and poverty reduction. Mr. Hallegatte holds an engineering degree from the Ecole Polytechnique (Paris) and a Ph.D in economics from the Ecole des Hautes Etudes en Sciences Sociales (Paris).
Read more from Dr. Stephane Hallegatte →
Dr. Jun Rentschler
Author: Dr. Jun Rentschler
Jun Rentschler is a Senior Economist at the World Bank’ Chief Economist Office for Sustainable Development, working at the intersection of climate change and sustainable resilient development. Prior, he served as an Economic Adviser at the German Foreign Ministry, as an Economist at the European Bank for Reconstruction and Development (EBRD), and led economic research with Grameen Bank in Bangladesh and the Partners for Financial Stability Program by USAID in Poland. He is a Visiting Fellow at the Payne Institute for Public Policy, and holds a PhD in Economics from University College London (UCL), specializing in development, climate, and energy. He has published widely on these topics, including in academic journals and his books ‘Fossil Fuel Subsidy Reforms: A Guide to Economic and Political Complexity’ (Routledge, 2018); ‘Investing in Resource Efficiency: The Economics and Politics of Financing the Resource Transition’ (Springer, 2018); and Lifelines: The Resilient Infrastructure Opportunity (World Bank, 2019).
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Dr. Julie Rozenberg
Author: Dr. Julie Rozenberg
Julie Rozenberg is a Senior Economist in the office of the Regional Director for Sustainable Development in Latin America and the Caribbean. She focuses on climate change adaptation and mitigation policies, and on recovery strategies from the COVID-19 crisis, working with countries on building more sustainable, resilient and inclusive growth trajectories. In previous positions, she contributed to World Bank flagship reports on climate change (“Shockwaves”, “Decarbonizing Development”, “The Adaptation Principles”) and co-led two major reports on infrastructure: “Beyond the Gap: how countries can afford the infrastructure they need while protecting the planet” and “Lifelines: the resilient infrastructure opportunity”. Julie Rozenberg holds an engineering degree and a PhD in economics.
Read more from Dr. Julie Rozenberg →