How can interventions increase society’s capacity to manage climate risks, reducing household vulnerability while maintaining or improving opportunities for development? This paper presents a social risk management and asset-based conceptual framework to help design such interventions. An integrated, multisectoral approach is needed to manage both direct and indirect climate risks. This requires greater collaboration among professionals working on disasters, climate change, and social policy, including shared platforms around definitions, data, monitoring, research, and capacity building. In terms of social protection, index-based insurance and combinations of insurance and safety net approaches hold promise, but the limits to what insurance can achieve need to be kept in mind.
Continual adaptation is needed to climate risks and climate changes. Recent evidence and predictions show that climate changes are accelerating and will alter the characteristics of climate risks. Risks associated with climate changes could increase household vulnerability to poverty, hunger, disease, mortality, displacement, and violent conflict in many developing countries. ‘Vulnerability’ is a function of risks, exposure and sensitivity and adaptive capacity, and depends on the relationship between losses and a benchmark indicator of household well-being.
Threats to household well-being stem from both direct risks associated with climate change (changes in climate variables) and indirect risks. The latter include: increased prevalence of pests and diseases; the degradation of natural resources; food price and employment risks; displacement; and potential conflicts.
Many interventions, however, tend to focus on direct risks and impacts with insufficient attention to indirect risks and to impacts on households. Further, given that climate change is (to an extent) a future problem, gaining the attention of policymakers can be difficult.
- Index-based weather insurance for farmers and for local and national governments appears to be increasingly important, but it is not a panacea.
- However, there are interesting innovations for weather risk management that combine insurance and safety net approaches. For example, Mexico and Ethiopia run programmes that include weather indices as triggers for payouts to farmers and to mobilise safety net transfers. The poor do not pay premiums; instead, local and national governments access international re-insurance markets.
- Climate change is likely to affect developing countries disproportionately, and so international burden-sharing beyond development aid will need to include: labour and migration flows; easy remittances; trade policies and effective international food markets; financial markets and insurance systems; disaster risk insurance and contingency disaster financing; peace keeping; and research in new technologies for exposed sectors.
Adaptation to climate change should be multi-sectoral and strive for a balance between institutional development, infrastructure sectors, productive natural resource sectors, and social policy including social protection. Policymakers should:
- Prioritise and sequence interventions: Set up early warning and monitoring systems and focus on investments that require significant time before accruing benefits. It is important to close the existing adaptation gap – helping households and countries better manage current climate volatility in order to prepare for the expected increase in future volatility. This involves identifying interventions with high payoffs for adaptation to current as well as future climate risks.
- Support local adaptation: Support communities to improve their capacity to identify and manage risks. Communities serve as a critical link between households and higher levels of society.
- Scale up social policy for adaptation to climate change: Increase support for social policy interventions that promote the ability to manage climate change risks at the household and local level.
- Support research: Seek consensus on basic terms and relationships between risk, vulnerability and adaptation to advance multi-disciplinary and multisectoral approaches. Seek also an understanding of poverty and distributional implications of climate risks and changes, and alternative interventions for adaptation to climate changes.
See also: Heltberg, R., Siegel, P. B. and Jorgensen, S. L., 2010, ‘Social Policies for Adaptation to Climate Change’, in Social Dimensions of Climate Change: Equity and Vulnerability in a Warming World, eds. R. Mearns and A. Norton, The World Bank, Washington, D.C., ch. 10.
