The 21st Century climate challenge

4Adapting to the inevitable: national action and international cooperationThe risks and vulnerabilitiesthat come with climatechange cannot be dealt withthrough microlevel projectsand ‘special initiatives’and infrastructures for health and education areleft devastated.The foundations for a multilateral systemequipped to deal with climate emergenciesare just beginning to emerge. The CentralEmergency Response Fund (CERF), managedunder UN auspices, is an attempt to ensure thatthe international community has the resourcesavailable to initiate early action and to tackle‘silent emergencies’. Its aim is to provide urgentand effective humanitarian relief within the first72 hours of a crisis. Since its launch in 2006, theCERF has received pledges from 77 countries.The current proposal is to have in place anannual revolving budget of US$450 millionby 2008. The wider multilateral system is alsoreforming. The World Bank’s Global Facility forDisaster Reduction and Recovery (GFDRR) alsoincludes a mechanism—the Standby RecoveryFinancing Facility—a multi-donor trust fundaimed at supporting the transition to recoverythrough rapid, sustained and predictablefinancing. Both the CERF and the GFDRRdirectly address failings in the current emergencyresponse system. However, the risk remains thatthe growing costs associated with emergencyresponses will divert assistance from long-termdevelopment assistance in other areas.Rising to the adaptation challenge—strengthening internationalcooperation on adaptationClimate change adaptation has to be broughtto the top of the international agenda forpoverty reduction. There are no blueprints tobe followed—but there are two conditions forsuccess.The first is that developed countrieshave to move beyond the current system ofunderfinanced, poorly coordinated initiativesto put in place mechanisms that deliver on thescale and with the efficiency required. Facedwith the threat to human development posedby climate change, the world needs a globaladaptation financing strategy. That strategyshould be seen not as an act of charity on thepart of the rich but as an investment in climatechange insurance for the world’s poor. Theaim of the insurance is to empower vulnerablepeople to deal with a threat that is not of theirmaking.The second condition for successful adaptationis institutional. The risks and vulnerabilitiesthat come with climate change cannot be dealtwith through microlevel projects and ‘specialinitiatives’. They have to be brought into themainstream of poverty reduction strategiesand budget planning. One possible frameworkfor action is revision of the Poverty ReductionStrategy Papers (PRSPs) that provide theframework for nationally owned policies andpartnerships with donors.Financing adaptation insuranceEstimating the financing requirements forclimate change adaptation poses some obviousproblems. By definition, the precise costs ofinterventions cannot be known in advance. Thetiming and intensity of local impacts remainuncertain. Moreover, because interventionshave to cover a wide range of activities,including physical infrastructure, livelihoodsupport, the environment and social policy,it is difficult to assign costs to specific climatechange risks. These are all important caveats.But they do not constitute a justification forbusiness-as-usual approaches.Several attempts have been made to provideballpark estimates of the financing requiredfor adaptation. Most have focused on ‘climateproofing’.That is, they have looked principallyat the cost of adapting current investmentsand infrastructure to protect them againstclimate change risks. The World Bank hasprovided one set of estimates based on a rangeof current investments and ‘guesstimates’ ofadaptation costs. Updating the World Bank’sfigures for 2005 points to a mid-range costestimate of around US$30 billion (table 4.2).Importantly, these costs estimates are based onnational economic indicators. Another valuablesource of information comes from ‘bottom-up’analysis. Extrapolating from current NAPA costestimates, one study puts the financing neededfor immediate ‘climate-proofing’ at betweenUS$1.1 billion and US$2.2 billion for LDCs,rising to US$7.7–33 billion for all developing192 HUMAN DEVELOPMENT REPORT 2007/2008