Change Policy Brief

Implementing adaptation under the : how can comprehensive management (CRM) support National Adaptation Planning (NAP) processes and NDC implementation May 2017

This policy brief Climate risks: What do they mean for NAP processes aims at ... and adaptation components of NDCs? Impacts of can already be felt today. Recent climate projections an- ticipate a significant increase in the frequency and / or intensity of yypresenting a comprehensive events such as storms and floods as well as slow-onset changes, like approach on how to integrate and desertification. In particular, Least Developed Countries (LDCs) and Small Island climate risk management into Developing States (SIDS) are affected and vulnerable due to financial, technical, physi- adaptation commitments (defined cal or social constraints. in NDCs and/or NAPs) to also account for residual climate risks Today’s and future adaptation action aim to reduce climate-related risks to a degree related to extreme weather events which depends on the scale of risks and the scale of the adaptation action. A com- and slow-onset changes. prehensive analysis and management of climate risks can be helpful to identify the yyproviding practical examples in potential for risk reduction, for identifying the respective limits and assess the out- order to illustrate how NAP and standing residual risk which cannot be mitigated by the specific measure. The National CRM can go hand in hand. Adaptation Plan process (NAP), initiated by UNFCCC in 2010, could serve as first start- yycontributing to the discussions ing point to align comprehensive climate risk management and the implementation of on how CRM can serve the adaptation commitments at country-level. implementation of the Paris Agreement. Comprehensive climate risk and sustainable development the IPCC management – analysing risks, AR5 risk concept serves as a valuable risk reduction opportunities complement to the previously used and residual risk concept of vulnerability to climate change. It broadens the perspective Climate risk has become an important to climate related impacts triggered consideration in the current thinking by extreme events and slow-onset around climate change: the Interna- changes. tional Panel on Climate Change (IPCC) has built on key concepts from the Comprehensive climate risk manage- disaster risk management discourse ment aims to reduce and address and introduced the concept of climate the negative consequences of climate risk in its Fifth Assessment Report change along the entire risk contin- (WGII AR5). Emphasising the link of uum: averting climate risks through climate change mitigation, adaptation the reduction of Climate Change Policy Brief | How can CRM support NAP

emissions, minimising climate risks CRM proposes a set of instruments for Implementing adaptation through adaptation and risk manage- risk reduction and adaptation that ena- measures under the Paris ment to managing residual climate ble stakeholders to take timely action Agreement: how to link CRM risks. Against this background, cli- for enhancing preparedness to cli- to NAP mate risks have to be continuously mate-related extreme events and for analysed, reduced, addressed and trans- strengthening overall resilience (e.g. NAP is a process to assess climate ferred. The concept of comprehensive early warning systems and contingen- change impacts and to mainstream climate risk management encompass- cy planning). adaptation responses into overall es the following mutually reinforcing development planning and, if appro- steps and should build on the partic- Despite current efforts for mitiga- priate, to implement adaptation com- ipation of stakeholders from different tion and adaptation, residual risks of mitments at the national level (e.g. sectors and scales: adverse impacts of climate change NDCs). According to UNFCCC currently remain. Addressing residual risks is 85 countries are formulating and Climate risk assessments build the therefore another critical pillar of implementing NAPs i. Therefore this foundation to analyse risks and to en- comprehensive climate risk manage- policy brief demonstrates that climate compass their potential consequences ment. Risk transfer mechanisms such risk management and national adapta- for people, assets and ecosystems. as climate risk insurance (see Infobox tion policy processes can be linked. The magnitude of adverse impacts by below) and social protection schemes climate change depends largely on can foster resilience to climate The NAP process supports countries the global level of emissions in the change by spreading risks across in integrating adaptation aspects into coming years and decades. In order different actors, geography and time. their development planning and public to keep climate change manageable Furthermore, in post-disaster situ- budgeting processes. NAP processes mitigating ations resilient recovery contributes are inter-ministerial planning pro- is paramount. Hence, keeping global to ‘build back better’ and prepare for cesses, set-up at the national level, warming below 2 degree, as agreed to future climate risks. covering and coordinating all sec- in the Paris Agreement, is an impor- tors at all scales, as adaptation is a tant step for managing climate risk. cross-cutting challenge. Hence, main-

International Climate Risk Insurance Initiative InsuResilience

Under Germany’s G7 presidency, the Federal Government initiated the climate risk insurance initia- tive ‘InsuResilience’. The initiative aims at offering insurance against climate risks to an additional 400 million poor and vulnerable people in developing countries by 2020. The initiative is based on a close partnership between the G7 and developing countries. Civil society, the insurance industry and development banks are also important partners.

Climate risk insurance can help in various ways to alleviate some of the impacts of extreme weather events by providing rapid assistance in the form of emergency aid packages to the people affected. Insurance instruments have an added value because they can buffer the adverse effects of extreme weather events. This way, climate risks are spread across many shoulders even before potential damage occurs. Direct insurance schemes insure households individually against risks such as harvest loss. In indirect insurance schemes, banks or states come together in risk pools. Such insurance instruments help to close a global equity gap since assistance is no longer an act of charity: the people affected are no longer petitioners but claimants, entitled to compensation for losses incurred. This safeguards the livelihoods of many people who are at risk from some of the impacts of climate change.

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Figure 2 iii Complementing vulnerability assessments Combining the array of instruments at country-level with a holistic view on climate risks including Complementing conventional adaptation measures with climate quantitative assessments of the potential risk management instruments and approaches to address magnitude of adverse impacts in order to guide residual risks (e.g. risk transfer mechanisms such as climate public and private decision making. risk insurance).

(Iterative steps)

Identifying info, assessing Assessing Initiating and gaps and needs, addressing climate launching Reviewing capacity gaps, assessing vulnerabilites of the NAP adaptation development needs and process options climate vulnerabilites Implementing Strategies Preparatory Elements

Compiling and Lay the Analyzing communicating Groundwork and climate risks adaptation plans Address Gaps (sectoral, national, etc)

Integrating climate change adaptation into planning Reporting, Monitoring and Review (Iterative steps)

Create a coherent planning basis at country-level Linking contingency or disaster risk response plans with NDCs and NAPs in order to enrich NDC and NAP implementation. streaming adaptation into political lines and to mobilise additional pri- instruments that can be used at planning aims at structural changes in vate-sector or international finance the national, regional or local level a country’s public policy-making pro- for adaptation where needed. complementing conventional adapta- cesses and decision-making cultures. tion measures. Key sectors for adaptation and for Thus, NAP can serve as an overarching yyProactive planning and preventive reducing migration pressures are for process to promote a coordinated ap- governmental action helps to avoid instance the agriculture, the health proach to climate risk management. As and reduce risks of potential me- and the water sector ii. governments currently face the chal- dium- to long-term damages for in- lenge of translating their NDC com- stance on infrastructure induced by The NAP process allows governmental mitments into national policies and climate impacts. entities to (1) identify and prioritise budgets, there is a good momentum yyBecause they get the ‘full picture’ adaptation action in all sectors (‘in- to link NAP and NDC implementation on climate risks decision makers formed decision-making’), (2) to op- and to integrate CRM approaches. will be able to also take interre- erationalise and implement preventive NAP offers an excellent opportunity to lated non-climatic aspects across measures and (3) to plan public in- analyse climate risks, risk reduction op- sectors and scales into account (e.g. vestments and allocate funds accord- portunities and resulting residual risks. demographic changes, limited eco- ing to the climate risks the respective The general benefits of linking the im- nomic opportunities, urbanisation country faces. The overall aim is to plementation of a country’s adaptation etc.). That can strengthen a coun- develop a coherent national policy commitments to CRM are: try’s resilience to climate change. approach on adaptation, covering all sectors, coordinating all political yyraising awareness among public de- Building on the Technical Guidelines levels and bringing the most relevant cision makers to demonstrate where of the UNFCCC LDC Expert Group stakeholders together, rather than there are residual risks that can- (LEG) Figure 2 demonstrates the add- implementing ‘stand-alone’ adaptation not be mitigated with the intended ed value of taking a comprehensive measures. Such a coherent approach adaptation actions. This enables approach on climate risks within the finally allows to incorporate adap- governmental entities to identify ap- NAP process. tation measures into public budget propriate climate risk management

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Possible ways of aligning CRM and adaptation

1. Enhance policy coherence and institutional cooperation

Aligning institutions and negotiation ened. Strengthening comprehensive often developed and operationalised in tracks under UNFCCC: Due to the con- risk management in the NAP process separate in-country processes. Linking ceptual similarities, a comprehensive could for example be integrated in contingency or disaster risk response CRM approach can contribute to link- the ExCom’s five-year rolling work plans with NDCs and NAPs and taking ing and operationalising international plan that is currently being developed climate risks into account enriches work streams of UNFCCC with regard to NAP. It would use synergies as NDC and NAP implementation, espe- to NDCs, NAP and the Warsaw In- outlined above, link stakeholders, in- cially with regard to the management ternational Mechanism for loss and cluding the private sector actors and of extreme weather events and pre- damage (WIM), as well as the Sendai its information and expertise on risks ventive risk management. Information Framework for Disaster Risk Reduc- and risk transfer solutions, and save and data will be combined, allowing tion. Institutional cooperation of the resources due to joint efforts. to get the ‘full picture’; policy co- WIM’s Executive Committee (ExCom) herence will be increased. Sharing with UNFCCC bodies, especially the Creating coherent planning basis at data is extremely advantageous as Adaptation Committee (AC) and the country-level: Currently, contingency assessing impacts of extreme whether Least Developed Countries Expert or disaster risk response plans as events and of slow-onset changes is Group (LEG), should be strength- well as NAPs and NDC documents are costly and time-consuming.

First regional framework aligning climate Aligning climate risk and adaptation needs change adaptation and disaster risk within Thailand’s NAP process management endorsed by Pacific leaders On behalf of the German Federal Ministry for the Environ- ment, Nature Conservation, Building and Nuclear Safety Having had a long history of suffering from natural haz- (BMUB) the GIZ project ‘Risk based national adaptation ards such as cyclones and storm surges, the Pacific Plat- plan – Risk-NAP’ in Thailand aims at improving develop- form for Disaster Risk Management and the Pacific Climate ment planning processes by using national and regional Change Roundtable joined forces and endorsed a common climate risk assessments as basis for setting adaptation ‘Framework for Resilient Development in the Pacific (FRDP)’ goals. Based on sector-specific impact chains climate risks in 2016. The development of the Framework was also sup- are analysed and quantified. In doing so, the need for ad- ported by GIZ on behalf of the Federal Ministry of Economic aptation measures is clarified and ante planning is encour- Cooperation and Development (BMZ). It provides guidance aged. Aligning climate risks and adaptation needs within to increase the region’s resilience towards climate change Thailand’s NAP process enhances cooperation between the and promotes an understanding of the links between cli- Office of Natural Resources and Environmental Policy and mate change adaptation and disaster management. Planning and the Ministry of Interior that is responsible for disaster risk management and regional planning.

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2. Joint action: combining the array of instruments at country-level

Combining the array of instruments at mix of policy instruments. Hence, mechanisms such as climate risk country-level: Mainstreaming pro- conventional adaptation measures insurance, transformational or resil- cesses like the NAP process give (e.g. land use planning, introduction of ient recovery approaches, migration an overview of a country’s policy resilient crop types etc.) can strategies etc.).There are further action across sectors. On that basis, be combined with tools used for risk possibilities to link risk pooling with most appropriate CRM instruments, management (e.g. risk assessments, additional financial protection instru- including risk transfer mechanisms early warning systems, contingency ments, including social protection and to address residual risk, can be se- planning etc.) and approaches to ad- meso-level risk insurance solutions. lected and integrated into the given dress residual risks (e.g. risk transfer

Insurance as part of climate risk Making use of comprehensive climate risk management in Ghana management in Tanzania’s NAP process

The African Risk Capacity (ARC) is one of the regional cli- To initiate the process of vulnerability stocktaking within mate insurance facilities under the international Climate Tanzania’s NAP process GIZ, on behalf of BMZ, conducted a Risk Insurance Initiative ‘InsuResilience’. It provides indi- combined NAP workshop and training event. Relevant mod- rect insurance against at state level for members ules of the GIZ training course ‘Loss and damage as part of of the African Union. It is supported by many multilateral comprehensive climate risk management’ were used to in- institutions and bilateral donors, among them the BMZ. troduce the concept of climate risk and instruments of CRM Ghana is in its accession process to the ARC. GIZ, on be- among the members of the inter-ministerial NAP team. The half of the BMUB, supports through the project ‘Promoting objective of this combined event was to demonstrate a risk Integrated Mechanisms for Climate Risk Management and analysis approach along the entire risk continuum in order Transfer’ (ICRM) the Ghanaian National Disaster Manage- to respond appropriately using risk reduction measures and ment Organization in gathering data on climate risks for approaches to manage residual risks. contingency planning (one of ARC’s accession criteria). As insurance sets a price tag on risks for society, insurance literacy and risk awareness is incentivised among Ghana- ian decision makers. Based on the pre-agreed contingency plan, an efficient use of payouts will be ensured. To complement such sovereign risk transfer solutions, the development of the private Ghanaian insurance market is also supported. With German funding through the BMUB, GIZ supported the establishment of the Ghana Agricul- tural Insurance Pool (GAIP), offering weather index and multi-peril crop insurance products as direct risk transfer solutions for small-holder farmers in Ghana. The project mentioned above also supports the development of risk transfer solutions for commercial agricultural companies in selected value chains.

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3. Methods: Risk analysis as a guide for public and private decision making

Complementing vulnerability assess- to apply it in respect to the new IPCC responsible in the public and private ments with an analysis of climate risks AR5 concept of climate risks. For up- arena to take informed decisions. It broadens the perspective on climate dated information please visit www. also spurs anticipatory planning and related impacts triggered by extreme AdaptationCommunity.net (see Infobox preventive action. On that basis, po- events and on slow-onset changes. below). litical will for investing / engaging in The GIZ Vulnerability Sourcebook is climate risk management instruments one example for a method that pro- Adding quantitative assessments of will be generated among public budget vides step-by-step guidelines to con- the magnitude of the adverse impacts authorities (e.g. conflict of targets: Do duct vulnerability assessments and to of climate change to vulnerability and I invest in education measures or in monitor changes in vulnerability over risk assessment: Quantifying the costs climate risk management? What are time. Currently a risk supplement to of climate risk management action benefits and potential savings accord- the Vulnerability Sourcebook is de- scenarios in comparison to the oppor- ing to financial capacities?) veloped to provide guidance on how tunity costs of non-action helps those

Methods: Better anticipatory planning by including quantitative aspects into climate risk assessments Including quantitative assessments of the magnitude To this end a risk assessment at local level in the Lake of the adverse impacts of climate change into risk Rukwa Basin / Tanzania was conducted by using a 5-step assessments is intended to bring about two results: approach, suggested by the GIZ ‘Global Programme first, to demonstrate and quantify the magnitude of on Risk Assessment and Management for Adaptation potential negative consequence of climate change (e.g. to Climate Change (Loss and Damage)’ on behalf of depending on different adaption measures that have been BMZ. The scale of potential climate risks and expected implemented). Second, to highlight how much different damages showed clearly that action is needed. Different risk management options cost in order to identify the stakeholders now discuss the proposed risk management most cost-efficient and appropriate response. measures in different fora to agree upon next steps.

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4. Share experience

Generating and showcasing examples and thus strengthen resilience to cli- term AdaptationCommunity.net could of good practice and sharing experi- mate change. The GIZ online platform be linked to the upcoming UNFCCC ences and expertise nationally and in- AdaptationCommunity.net provides in- Clearinghouse Mechanism informing ternationally will stimulate discussion formation on approaches, methods and on all aspects of climate risks and and contribute to managing climate tools for adaptation to climate change solutions available. risks along the entire risk continuum (see Infobox below). In the medium

yyVulnerability and Climate Risk Assessments yyLoss & Damage yyEcosystem-based Adaptation yyMonitoring & Evaluation yyPrivate Sector Adaptation There are also publications and supplementary materials on adaptation, climate risk assessments and compre- An online platform to support adaptation to climate change: hensive climate risk management available. Detailed AdaptationCommunity.net offers insights into different information on the training courses ‘NAP country-level topics: training’ and ‘Loss and damage as part of comprehensive climate risk management’ can also be found online. Ad- yyMainstreaming & NAP aptationCommunity.net is continuously expanding its re- yyClimate Information & Services sources and offering new webinars to provide users with the latest on the debate and adaptation tools.

7 Endnotes i. FCCC/SBI/2016/INF.11, Expanded table 1 of FCCC/SBI/2016/INF.11 ii. NDC Adaptation Navigator (forthcoming) iii. Source: Figure based on Least Developed Countries Expert Group. 2012. National Adaptation Plans. Technical guidelines for the national adaptation plan process. Bonn: UNFCCC Secretariat. Available at http://unfccc.int/adaptation/workstreams/national_adaptation_programmes_ of_action/items/7279.php

About the GIZ Climate Policy Support Programme

GIZ Climate Policy Support Programme aims at developing and mainstreaming innovative approaches to tackle the challenges of climate change in the context of German Development Cooperation. On behalf of the Federal Ministry for Economic Co- operation and Development (BMZ), it supports developing countries in their efforts to mitigate climate change and to adapt efficiently to its impacts. Through conceptual and practical activities, the Climate Policy Support Programme actively con- tributes to the implementation of the Paris Agreement and the UN Sustainable Development Goals.

About the GIZ Global Programme on Risk Assessment and Management for Adaptation to Climate Change

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) the programme aims to generate prac- tical experience and recommendations in the field of comprehensive climate risk assessment and management to support the German development cooperation and its international partners in regions severely affected by climate change. The pro- gramme operates pilot activities in different regions, e.g. the Pacific Island Countries, South Asia (India), Central America and East Africa.

Published by: Author/Contact: Deutsche Gesellschaft für Waltraud Ederer URL links: Internationale Zusammenarbeit (GIZ) GmbH E [email protected] Responsibility for the content of external websites linked T +49 228 4460 - 1570 in this publication always lies with their respective Registered offices publishers. GIZ expressly dissociates itself from such Bonn and Eschborn, Germany Lena Klockemann content. E [email protected] Dag-Hammarskjöld-Weg 1-5 T +49 228 4460 - 1278 On behalf of: 65760 Eschborn, Germany German Federal Ministry for Economic Cooperation and T +49 61 96 79-0 Nikola Rass Development (BMZ) F +49 61 96 79-11 15 E [email protected] Division 313, Climate policy T +49 228 4460 - 1198 E [email protected] GIZ is responsible for the content of this publication. I www.giz.de/climate Design/layout: Ira Olaleye, Eschborn Climate Policy Support Project Global Programme on Risk Assessment and Photo credits: Management for Adaptation to Climate Change Title page: © GIZ / Michael Gajo; Pg. 5, 6: © GIZ / Waltraud Ederer; Pg. 7: © GIZ / Ala Kheir; Pg. 8: © GIZ / Ranak Martin Bonn, May 2017