Mitigation and Adaptation Some Perspectives

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Mitigation and AdaptationSome Perspectives

• Franck Lecocq, Zmarak Shalizi
• World Bank, Development Economics Research Group
• International Energy WorkshopParis, 22-24 June
  2004

The opinions expressed in this presentation are
the sole responsibility of the authors. They do
not necessarily represent the views of the World
Bank, its executive directors or the countries
they represent.
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Motivation

• There is strong evidence that most of the
  warming observed of the the last 50 years is
  attributable to human activities (IPCC TAR)
• Even if GHG emissions were stopped now, mean
  temperature and sea-level would still rise for
  decades.
• Developing countries are likely to suffer most,
  and have least ability to cope
• A portfolio approach combining adaptation and
  mitigation is needed because some adaptation is
  inevitable
• Question how to allocate efforts in such a
  portfolio given strong link with development?

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Outline

• Introduction Definition of Adaptation
• Why the mitigation vs. adaptation debate is
  relevant
• Mitigation and adaptation Similarities and
  Differences
• Some economics of adaptation vs. mitigation
• Political economy of mitigation vs. adaptation
• Conclusion Adaptation in a context

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Definitions

• Mitigation measures to limit GHG concentration
  in the atmosphere to avoid CC and associated
  adverse impacts (gross damages)
• Adaptation anticipative measures to alleviate
  the adverse impacts of CC
• Coping (reactive adaptation) reactive
  measures to limit adverse impacts of CC
• Net Damages the remaining adverse impacts of CC
  on welfare
• In this paper, we focus on international action
  related to anticipative adaptation in developing
  countries

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Relationships
? Emissions
? Concentrations
? Temperature
? Weather Patterns
? Sea-Level
? Other
Economic Damages
? Welfare
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Examples of Anticipative Adaptation
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Rationale for Beginning Some Adaptation Now

• Some adaptation measures will need time to be
  agreed upon and implemented
• Measures requiring international burden sharing
  agreements (e.g. transnational water sharing
  agreements
• When implemented, some adaptation measures
  require long time to yield desired results
• long-lived capital, e.g. new building code
• Measures affecting land-use dynamics, e.g. zoning
  policies
• Research and development
• Data collection (long time series required for
  insurance)
• We must make a decision about some adaptation
  measures now
• The decision to undertake these measures will be
  made under uncertainty about damages

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Similarities between Mitigation and Adaptation

• Both seek to limit damages of CC Costs now and
  benefits (long) in the future
• High uncertainty about costs and benefits
• Inertia of socio-economic or climatic system
  requires decisions to be made now despite
  uncertainty
• No-regret policy options
• Mitigation and adaptation are imperfect
  substitutes. They can be complementary in some
  cases

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Two Differences between Mitigation and Adaptation

• 1 Mitigation reduces all climate-related risks
  everywhere both known and unknown While
  adaptation reduces specific classes of risks,
  often in specific areas or types of locations
• For example, adaptation can be site specific
  (relocation), risk-specific (RD on heat-tolerant
  crops), or both (new buildings)
• In other words, mitigation provides a global
  public good, while adaptation often provides a
  local public good or a club good. However, it
  may be more concrete and actionable

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Two Differences between Mitigation and Adaptation

• 2 Mitigation is easy to measure While
  Adaptation is not
• GHG emissions provide a clear yardstick for
  measuring the success of mitigation efforts
• On the other hand, it is difficult to attribute
  particular events (e.g., a heat wave) to climate
  change
• Puts a premium on learning more about damages,
  which could help indirectly to clarify damages of
  CC for mitigation purposes as well

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A Model of the Mitigation - Adaptation Balance

• N regions indexed by i 2 periods
• Planner cost-minimization problem
• C(r) Costs of abatement (r)Ci(ai) Costs of
  adaptation in region iDi(r,ai) Damages in
  region i ? Discount factor

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Optimal Solution (Certainty Case)

• Mitigation and adaptation can be treated
  independently and sequentially, unless

• There are many examples where this condition
  is met hence optimal mitigation is not
  independent of optimal adaptation

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Uncertainty Case

• Planners function
• If adaptation increases marginal returns to
  mitigation, introducing uncertainty on the
  location of impacts lead to higher abatement
• Because the planner can no longer target
  adaptation optimally, she loses the opportunity
  to fully exploit the synergies between the
  adaptation and mitigation

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Measurement Issues

• It is difficult to attribute specific adverse
  events to CC
• This is not an issue for anticipative adaptation
  for classes of events both costs Ci(ai) and
  benefits Di(r,ai) can still be defined reasonably
  well
• But this is an issue for compensation schemes for
  specific events (e.g., disaster compensation,
  insurance)
• Data collection is critical to limit the problem,
  but normative judgments will also be needed

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The Question of No-Regret Adaptation Measures

• The literature claims that there are many
  no-regret adaptation options
• Rationale Adaptation to current climate
  variability extreme weather events is suboptimal
  in many developing countries due to knowledge and
  budgetary constraints
• Benefits Potentially large benefits for sum
  invested clear link with current development
  priorities

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Political Economy of Mitigation vs. Adaptation

• Current focus of international negotiations is on
  mitigation (e.g., Kyoto, EU ETS)
• Very few international institutions to adapt to /
  cope with climate change impacts, but many
  proto-institutions than can be built on
• Key issue which ones to scale up and whats
  missing?
• Some reluctance to engage on this topic in some
  quarters of the climate community
• If some adaptation is inevitable, the vulnerable
  developing countries need assurance that the
  intl institutional requirements are being
  addressed

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Equity and Distributional Issues

• Negotiations often stalled over distribution
  issues
• Like mitigation, adaptation measures will raise
  distributional issues because they target
  specific groups or categories of beneficiaries
• Except in the case of global measures such as
  weather alert systems, global insurance or damage
  compensation schemes, or RD
• Not clear a-priori whether the distributional
  issues in adaptation will be as contentious as in
  mitigation --since the focus will be on
  addressing classes of high probability and
  demonstrable damages

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Conclusion Adaptation in a Context of Capital
and Labor Mobility

• Risks that CC pushes population on fragile lands
  to breaking point, hence accelerating migration
  flows to cities and increasing conflicts over
  scarce resources (e.g. water)
• Risks that CC accelerates migration flows from
  developing countries to developed countries as
  cities themselves are impacted and cannot cope
  with higher in-migration
• Raises concerns for all in a World which is
  heading towards higher capital and labor mobility

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Conclusion

• In this context, a portfolio of actions combining
  adaptation and mitigation is necessary to avoid
  these non-linearities
• In addition to the core development agenda
  (empowering migrants, improving cities, etc.),
  will have to focus on scaling up the the
  no-regret options
• It is in OECDs best interest to help here.
• Problem designing institutions able to recognize
  where the most pressing threats are, and to act
  to contain them