Adapting to climate change

What's needed in poor countries, and who should pay

Climate change is forcing vulnerable communities in poor countries to adapt to unprecedented climate stress. Rich countries, primarily responsible for creating the problem, must stop harming, by fast cutting their greenhouse-gas emissions, and start helping, by providing finance for adaptation. In developing countries Oxfam estimates that adaptation will cost at least $50bn each year, and far more if global emissions are not cut rapidly. Urgent work is necessary to gain a more accurate picture of the costs to the poor. According to Oxfam's new Adaptation Financing Index, the USA, European Union, Japan, Canada, and Australia should contribute over 95 per cent of the finance needed. This finance must not be counted towards meeting the UN-agreed target of 0.7 per cent for aid. Rich countries are planning multi-billion dollar adaptation measures at home, but to date they have delivered just $48m to international funds for least-developed country adaptation, and have counted it as aid: an unacceptable inequity in global responses to climate change.

Sir Nicholas Stern and Rajendra K. Pachauri, (Chair of the IPCC) comment on Oxfam's Climate Change report.

Download full paper (PDF 494KB)

Summary

If the rainy season starts late, crops fail and people suffer. Children eat leaves. In that situation, only God can help us.’

Kasko Ajikara, farmer and father, Gadabedji village, Niger

‘We basically have three choices – mitigation, adaptation, and suffering. We’re going to do some of each. The question is what the mix is going to be. The more mitigation we do, the less adaptation will be required, and the less suffering there will be.’

John Holdren, President of the American Association for the
Advancement of Science.

There is a deep injustice in the impacts of global warming. Rich countries have caused the problem with many decades of greenhouse-gas emissions (and in the process have grown richer). But poor countries will be worst affected, facing greater droughts, floods, hunger, and disease.

The impacts are already hitting vulnerable communities, where people are starting to adapt their lives to this reality. In South Africa, less frequent and less reliable rains are forcing farmers to sell their cattle and plant faster-maturing crops. In Bangladesh, villagers are creating floating vegetable gardens to protect their livelihoods from flooding. In Viet Nam, communities are helping to plant dense mangroves along the coast to diffuse tropical-storm waves.

Climate change is a challenge to current models of economic growth: all countries will have to find low-carbon paths to development, in order to keep global temperatures to less than 2 degrees Celsius above pre-industrial levels. But given their historic role in causing the problem, rich countries now have two extraordinarily clear obligations: to stop harming, by massively cutting their greenhouse-gas emissions, and to start helping, by providing compensatory finance so that poor countries can adapt, before they suffer the full impacts of climate change.

Tackling climate change requires an unprecedented level of global co-operation. The G8 summit in Germany in June 2007 brings an important opportunity for rich countries to demonstrate their commitment to achieving such co-operation. The task of G8 leaders at Heiligendamm is clear. They must set a global target to keep global warming below 2 degrees, and commit to reducing emissions in their economies by 2015.

Rich countries must also demonstrate their commitment to generating the global co-operation needed to tackle climate change by living up to their obligation to finance adaptation in developing countries, but without diverting resources from aid already committed . When donors to the Global Environmental Facility meet in Washington DC later in June, to pledge contributions to the international funds set up for adaptation, it will be their ideal opportunity to start providing that finance on the scale needed.

What is needed for developing countries to adapt to climate change?

Changes at many levels. Communities must build their resilience by adopting appropriate technologies and diversifying their livelihoods to cope with the coming climate stress that lies outside the realm of human experience. Ministries must learn to plan and budget around climate uncertainty. New and old national infrastructure, such as hospitals, reservoirs, and roads, must be climate-proofed.

This paper sets out a rough guide to the scale of the financing challenge. Oxfam estimates that the costs for developing countries of adapting to climate change will be well above the World Bank’s widely cited estimate of $10–40bn annually. Based on new approaches to scaling up costs, we estimate the cost will be at least $50bn each year, and far higher if greenhouse-gas emissions are not cut rapidly.

Who should provide that finance? An approach rooted in equity and justice suggests that countries that are both responsible for producing excessive emissions, and capable of providing assistance, should bear the costs. Oxfam’s new Adaptation Financing Index gives an indication of what fairness in adaptation requires: the USA is responsible for over 40 per cent of what’s needed annually, the European Union for over 30 per cent, and Japan for over 10 per cent. Within the European Union, the top five contributors should be Germany, the UK, Italy, France, and Spain.

Adaptation calls for many tens of billions of dollars each year. But rich countries have so far pledged a mere $182m to international funds for developing-country adaptation – less than 0.5 per cent of the minimum amount that Oxfam believes is needed overall.

Funding just the most urgent and immediate adaptation priorities of the least- developed countries (LDCs) is likely to cost $1–2bn. Among donors, the mood is anything but urgent: they have so far delivered $48m to the international fund set up for LDCs – less than five per cent of what’s needed: enough for Haiti, Samoa, and Kiribati, but no more.

Not only is this funding a fraction of what is needed, but it is almost all being counted towards long-standing commitments to provide 0.7 per cent of national income as aid. Only the Netherlands has explicitly committed to provide climate-related finance in addition to this. Development and poverty reduction are hugely under-funded and donor countries must raise their aid to 0.7 per cent as was promised in 1970. Finance for adaptation should be provided in addition to this, and should not be included in the definition of aid.

Meanwhile, rich countries are investing in their own climate-change adaptation, with budgets for individual projects at home outstripping their total contribution to international adaptation funds. The UK – the biggest contributor to international funds so far, pledging $38m – is investing £178m ($347m) in cooling systems for the London Underground, partly in preparation for climate change. The Netherlands, pledging $18m to international funds, is spending at least €2.2bn ($2.9bn) on building new flood dykes at home, in anticipation of climate-change impacts.

Rich countries must seize the opportunity offered by the G8 summit in June 2007. Stop harming and agree that immediate measures must be taken to keep global warming as far as possible below 2 degrees Celsius. Start helping and provide adaptation funds on the scale needed, in proportion to their responsibility for pollution, and their capability to assist. On its own, adaptation is by no means an answer to climate change: it can only make a difference to poor communities if emissions are cut rapidly. So what will it take to achieve justice in climate adaptation?

Rich countries must lead by example

Rich countries must lead in drastically reducing their greenhouse-gas pollution in order to keep global warming less than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels. This is essential to avoid dangerous climate change, and to preserve poor peoples’ ability to avoid the worst impacts, through adaptation. Rich and poor countries must start working together to find low-carbon pathways for future human development.

The countries topping Oxfam’s Adaptation Financing Index – the USA, the European Union, Japan, Canada, and Australia – should start providing more finance to developing countries immediately.

In line with their responsibility for causing climate change, and their capability to assist, they should start actively planning to raise the scale of resources needed – likely to be at least $50bn annually.
Additional finance for adaptation must not come out of existing aid commitments.

Development is essential to enable poor people to adapt successfully, but it is still hugely under-funded: donors must live up to the commitment of providing 0.7 per cent of gross domestic product (GDP) in order to eradicate poverty. Adaptation finance cannot be rebranded or diverted from aid commitments, and must be reported systematically and transparently. In line with the ‘polluter pays’ principle, it is owed not as aid from rich country to poor country, but as compensatory finance from high-emissions countries to those most vulnerable to the impacts. There are many innovative mechanisms for raising this finance independently from aid, which deserve full consideration.
More robust estimates of the economics of adaptation are urgently needed.

This calls for an initiative equivalent to the British government’s ‘Stern Review’ on the economics of stopping climate change, but one focused on examining the relationship of development to adaptation, providing examples of best practice in project design and finance, and producing stronger estimates of the costs and benefits of adaptation. This would give developing countries a firmer basis for integrating adaptation into development plans and budgets, and would give high-income, high-emissions countries a clearer estimate of the finance that they are capable of – and responsible for – providing.
A far more intensive, action-learning phase of adaptation is needed to promote learning-by-doing.

There is still much for the international community to define and clarify about how best to manage and disburse funds for adaptation, and how best to build climate resilience in developing countries. But vulnerable communities across the world cannot be expected to wait until each and every question has been resolved, before they start getting the support needed. A far more intensive, action-learning phase – focused on testing, building up organisational capacity, and scaling up successful demonstration projects – would produce valuable learning-by-doing. Beginning in this initial three-to-five year phase, international adaptation funds should be made available to diverse actors, including NGOs because they can often reach and support vulnerable communities most effectively. The experience and expertise built up from this phase should be systematically documented and shared to promote learning. In this way, learning from practical experience will contribute to unresolved debates on eligibility and governance of funds, and will also inform best practice on adapting to climate change.