By Amrita Goldar & Sajal Jain
Eyes are now set on the agenda of the 27th Conference of Parties (COP 27), with an expectation of a more focussed approach to adaptation financing. The COP 26 highlighted the vitality of the concept and discussed critical initiatives towards channelising greater adaptation finance. Global climate financing conversations at multiple fora, like the G20 as well as the United Nations Framework Convention on Climate Change (UNFCCC), have urged greater private sector participation. Efforts are being channelised to initiate a shifting of focus of investors to the hitherto publicly-funded adaptation sector. However, for any concrete results to materialise, there exists the crucial need to first put the house in order and understand the uncertainty around what constitutes adaptation.
At present, there exist multiple definitions of climate adaptation, not only making it difficult to estimate and track the global climate financing flows directed towards adaptation, but also throwing up a fresh set of problems with respect to the allotment of new finance. An analysis of some of the existing definitions of climate change adaptation from prominent entities highlights the differences. The Intergovernmental Panel on Climate Change (IPCC) defines adaptation in the following manner: “In human systems, the process of adjustment to actual or expected climate and its effects, in order to moderate harm or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate and its effects; human intervention may facilitate adjustment to expected climate and its effects.”
On the other hand, the UNFCCC defines it as “adjustments in ecological, social, or economic systems in response to actual or expected climatic stimuli and their effects or impacts. It refers to changes in processes, practices, and structures to moderate potential damages or to benefit from opportunities associated with climate change.”
The difference in definitions lies in the keywords that are used. While some describe it as a ‘process’, there are others who use words such as ‘adjustment’, or simply ‘changes’ to define adaptation. The term ‘adjustment’ can be deciphered to have an end objective. On the other hand, terms like ‘process’ and ‘changes’ can be interpreted as describing a broader and open-ended perspective, that do not include a particular time or subject reference, and can subsume any adjustments. With one definition containing overlapping features of the other, and the other missing features of the first, there is confusion over the concept and thus there are wide differences in what is seen as the goal and what are considered the metrics of achievement of the goal.
The IPCC definition of adaptation distinguishes between different types of adaptation and focuses not only on technical adaptation measures but also on institutional responses. From a policy perspective as well, the IPCC definition provides more scope for adaptation policies to provide greater resilience benefits for communities and ecosystems. On the other hand, the UNFCCC definition of adaptation is more technical and reads adaptation more as a cost of climate change, with limited recognition of any benefits of adaptive measures.
Due to the sensitive nature of definitions, these seemingly small differences can translate to different policy implications as well as finance allocations. Based on the definition of adaptation adopted, the end objective of the financed activity can vary. The lack of an agreed upon definition thus gives way to consequential disputes in the very classification of an adaptation initiative, and severe problems in adaptation climate finance allotment, while further increasing the probability of green-washing activities. Moreover, comparisons become difficult for any climate financing assessment initiative, thereby reducing accountability.
With the impact of climate change becoming increasingly apparent, the need to adapt and prepare for this will assume prominence. The COP27 will provide the necessary platform to engage world leaders in better, action-oriented conversations on climate financing. As interest in ensuring greater resilience and adaptation to climate change will rise, the need for a more precise definition of climate adaptation will become imperative. All the seemingly small differences discussed can have a significant effect on the expectations of different stakeholders in the adaptation financing process. In economics, there exists a concept of type I and type II error. In the current context, a type I error occurs if an actual adaptation activity is not considered to classify as adaptation, a false negative. In contrast, a type II error occurs if an activity does not serve any adaptation purpose, but is classified as a legitimate adaptation activity, a false positive. While the probability of both errors will exist, a balance needs to be sought with controls in place through a proper definition. A crucial impetus for expanding the role of private sector financing in adaptation will also depend to a large extent on an agreed-upon definition.
With multiple definitions and interpretations already existing, there is a need for adopting a globally-agreed framework of climate adaptation. Initially, this framework need not adopt a completely new set of definitions, but can agree on a combined definition from the already existing ones. Additionally, the definition or rule-making will need to be supported by systems in place that ensure regulatory and monitoring requirements in the form of international or government entities. This will contribute in great magnitude towards encouraging and providing more clarity for investors—of where their money will go and of the end objectives, for policymakers—for a precise assessment of the needs and gaps in adaptation financing, as well as for the global climate community (for efficient stocktaking and accountability).
Climate financing has been the most critical and discussed topic in international negotiations, and yet the most controversial. With climate induced changes becoming harsher, adaptation is a reality that the world faces. It is thus necessary to be able to make an informed decision on how to adapt, to prepare well for the reality of climate change.
(The author are senior fellow, and research associate, ICRIER respectively. Views are personal)