Working Group II: Impacts, Adaptation and Vulnerability

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2.7. Decision Analytic Methods and Frameworks

This section presents basic principles of decision analytic frameworks that have been or could be used in assessing adaptation decisions in sectors and regions. Thus, it provides a common base for decision analysis-related discussions in sectoral and regional chapters of this report.

2.7.1. Decision Analysis to Support Adaptive Decisions—Introduction to Frameworks and Principles

Decisionmakers who are responsible for climate-sensitive economic sectors (e.g., forestry, agriculture, health care, water supply) or environmental assets (e.g., nature reserves) face questions related to undertaking adaptation measures on the basis of what impacts might be expected if global GHG emissions continue unabated or as a result of globally agreed mitigation action at different levels of control. The starting point for adaptation decisions is to explore the possible range of impacts to which one would need to adapt. This is a complex task in itself because it involves understanding possible regional patterns of climate change, the evolution of key socioeconomic and biophysical components of the sector or region under consideration, and the dynamics of the impacts of changing climatic conditions on the evolving social system.

Adaptation decisions in private sectors operating under free-market conditions will be made largely as part of a business-as-usual approach and will rely on analytical frameworks that are compatible with the management culture. The emerging literature on adaptation describes this as autonomous adaptation. The flexibility of private-sector actors and thus the range of options they are able to consider in adapting to any external impact (not only climatic ones) can be severely constrained by market distortions or by a lack of resources to implement any transformation. Under such circumstances, the potential for autonomous adaptation is limited. Planned adaptation will be required, and the importance of public policy is larger.

A standard example for autonomous adaptation is the farmer who switches from one cultivar of a given crop to another or from one crop to another in response to perceived changes in weather patterns, simultaneously considering changes in relative prices of input factors and agricultural commodities, the evolving technological and agronomic conditions behind them, and other factors affecting his profits. However, if prices are distorted by a quota system or state subsidy, decisions are excessively dominated by these considerations, which could lead to maladaptation. Similarly, subsistence farmers in less-developed countries are not profit maximizers, and they may not possess the resources required to make even minor shifts in response to changes in their external conditions. Under these conditions, the only possibility for them might be to give up their livelihood altogether.

With a view to the already significant atmospheric load of GHGs since the industrial revolution, as well as the huge inertia and long delays characterizing the atmosphere-ocean-biosphere system, adaptation to anthropogenic climate change appears inevitable over the coming decades. It is worth looking at some of the key differences in applications of DAFs that deal with climate change mitigation (reducing GHG emissions) and adaptation (managing and counterbalancing the impacts of climate change).

The most crucial difference between mitigation- and adaptation-oriented DAF applications is to whom the benefits of action accrue. Except for "no-regret" options, benefits of mitigation will become a globally shared public good. Adaptation actions will predominantly benefit agents who adapt, in the case of private actors, or gains will be shared by the community in the case of local/regional public goods and services, such as flood protection.

The second important difference between mitigation and adaptation decisions is related to the timing of policy options. If climate protection were needed, as many scientists and policymakers maintain, policies and technologies that help reduce GHG emissions at the lowest possible social costs would be required immediately. On the adaptation side, in contrast, the bulk of more significant impacts of climate change may be felt 30, 50, or 100 years from now. This leaves a longer time period (compared to mitigation action) to steer the development of climate-sensitive sectors so that their climate vulnerability will be lower and, more important, to develop technologies that will help reduce remaining negative impacts by the time they really happen. Nevertheless, forethought and action might well be required in sectors with long-lived infrastructure and large social inertia (e.g., changing institutions such as misallocated property rights) to foster adaptation to future climate.

In terms of public policies, the foregoing analysis implies urgency on the mitigation side to formulate and put in place appropriate measures; by contrast, in general there is more time on the adaptation side to sort out potential impacts, adaptation needs, institutional and technological options involved in various adaptation measures, and public policies to develop and deliver them. At the same time, however, in many countries around the world that suffer from current climatic variability and extremes, there is an urgent need for appropriate adaptation policies and programs to be designed and implemented now to lessen adverse impacts; such actions also will help to build adaptive capacity for future climate changes.

Several other differences between mitigation and adaptation decisions must be considered in framing DAFs appropriately. Mitigation decisions are to be crafted globally, and their implementation may entail a global spread to reduce costs, whereas adaptation decisions are more limited to nations or subnational regions. The region in this context is intentionally defined loosely and given a broad interpretation. In considering climate change impacts and adaptation policies, a region typically would be a sociogeographical unit under the jurisdiction of a legally recognized policy entity within a country. However, a region in this sense also could correspond to a whole country, especially if it is relatively small and geographically homogeneous. Moreover, regional climate impact and adaptation studies also are conceivable (and in some cases have been undertaken) at the level of a supranational region, provided it has a recognized policymaking entity (e.g., the European Union).

Many market-sector impacts can be relieved at least partially by a combination of regional adjustments and interregional trade (especially in the agriculture and livestock sectors), but regions remain the prime focus of adaptation policies even in these cases. In terms of the public policy agenda, mitigation decisions have to be made today in the context of current short-term economic problems, social challenges, and policy debates. Adaptation and adaptation-related analyses will have to be developed in the context of long-term socioeconomic and technological development, with a special view to economic and technological trends in climate-sensitive economic sectors and environmental systems. This makes adaptation-oriented DAF applications easier because options to factor them in are much broader, but it also makes them more difficult because the future is difficult to predict and there is a clear need for policies that will be successful across a broad range of plausible futures (these policies commonly are called robust). The information base for adaptation decisions will improve over time, whereas DAFs to support near-term mitigation decisions must cope with current knowledge plagued with enormous uncertainties.

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