85056 A Risk Management Approach to Climat SUSTAINABLE DEVELOPMENT-EAST ASIA AND PACIFIC A Risk Management Approach to Climate Adaptation in China Adaptation in China         Chris Sall    China and Mongolia Sustainable Development China and Mongolia Sustainable Development  Sustainable Development Department Sustainable Development Department  East Asia and Pacific Region East Asia and Pacific Region  June 2013  Chris Sall     June 2013 THE WORLD BANK 1    THE WORLD BANK A Risk Management Approach to Climate Adaptation in China China and Mongolia Sustainable Development Sustainable Development Department East Asia and Pacific Region June 2013 This background paper was prepared as an input to a series on Climate Risk Management and Adaptation in China (CLIMA). Each of the papers in the CLIMA series outlines a framework for managing risks posed by present-day climate variability, extreme weather events, and future climate change to an individual sector in China, including transportation, urban water utilities, and forestry. The CLIMA series papers are an initiative of the Sustainable Development Department of the East Asia and Pacific Region of the World Bank. A growing body of scientific evidence shows that China’s climate is indeed changing, especially when climate is viewed at the regional level. Temperatures are rising, precipitation regimes are changing and shifts have occurred in the distribution of extreme weather events. The effects of extreme weather events, present- day climate variability, and future climate change cut across many different sectors of China’s economy. China’s government estimates that direct economic losses from extreme weather events cost the country 1–3 percent of gross domestic product each year. As China's economy continues to grow, its exposure to weather- related hazards is expected to increase, especially without policies to limit building in hazardous areas such as floodplains and alleviate non-climate pressures such as overuse of freshwater resources. Effective risk management policies and investments are crucial to reducing the sensitivity and increasing the resilience of the country to extreme weather, climate variability, and long-term climate change. Sustainable Development Department East Asia and Pacific Region The World Bank Washington, D.C. September 2013 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on maps in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of denoted boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally promptly grant permission to reproduce portions of the work. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750- 8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. Cover photo by Arne Hoel Contents Acknowledgments......................................................................................... v Abstract........................................................................................................... vii Abbreviations.................................................................................................. ix Introduction..................................................................................................... 1 1. Risk, Uncertainty, Risk Management, and Adaptation................................ 2 2. Overview of Climate Change Adaptation and Disaster Risk Management in China..................................................................................... 8 3. A Risk-based Approach to Climate Change Adaptation in China............ 11 Step 1: Frame the Decision.......................................................................... 14 Step 2: Assess Risks ................................................................................... 18 Step 3: Identify and Evaluate Options to Reduce Risk.............................. 25 Step 4: Identify Challenges to Implementation and Plan to Monitor and Evaluate.......................................................... 31 4. Conclusion.................................................................................................... 34 References...................................................................................................... 37 A Risk Management Approach to Climate Adaptation in China iii Acknowledgment s This background paper is part of a series on Specialist, World Bank). Vivian Argueta- Climate Risk Management and Adaptation Bernal (Consultant, World Bank) and in China (CLIMA). It was written by Chris Zuzana Staton-Geddes (Operations Analyst, Sall (Consultant, World Bank; Affiliated World Bank) coordinated the editing and Researcher, Center for International publication process. Anne Himmelfarb Environment and Resource Policy, the edited the final draft. Liu Jin (Senior Forestry Fletcher School, Tufts University) under Specialist, World Bank) reviewed the the guidance of team leaders Paul Procee Chinese translation. Any remaining errors (Lead Urban Specialist, World Bank) are the author’s own. and Carter Brandon (Lead Economist, Sustainable Development, World Bank), with About the East Asia and Pacific contributions by Gordon Hughes (University Sustainable Development of Edinburgh). The paper benefited greatly Discussion Paper Series from critical review and comments by Sustainable development issues are an integral Ademola Braimoh (Global Expert Team for part of the development challenge in the East Climate Change Adaptation, World Bank), Asia and Pacific (EAP) region. The World Milen Dyoulgerov (Global Expert Team for Bank’s Sustainable Development Strategy for Climate Change Adaptation, World Bank), the region provides the conceptual framework Nancy Chaarani-Meza (Environmental for setting priorities, strengthening the policy Specialist, Climate Policy and Finance and institutional frameworks for sustainable Department, World Bank), Michael development, and addressing key environmental, McCraken (Chief Scientist for Climate social, and rural development challenges through Change Programs, Climate Institute), Abed projects, programs, policy dialogue, nonlending Khalil (Water and Climate Risk Management services, and partnerships. The EAP Sustainable Specialist, World Bank), Rosina Bierbaum Development Discussion Paper series provides a (University of Michigan, World Bank forum for discussion of good practices and policy Fellow on Climate Change Adaptation), issues within the development community and and Habiba Gitay (Senior Environmental with client countries. A Risk Management Approach to Climate Adaptation in China v Acknowledgments EAP Sustainable Development Discussion Papers governments they represent. The World Bank carry the names of the authors and should be cited does not guarantee the accuracy of the data accordingly. The findings, interpretations, and included in this work. The boundaries, colors, conclusions expressed in this paper are entirely denominations, and other information shown on those of the authors. They do not necessarily any map in this work do not imply any judgment represent the views of the International Bank on the part of the World Bank concerning the for Reconstruction and Development/World legal status of any territory or the endorsement or Bank and affiliated organizations, or those of acceptance of such boundaries.  the executive directors of the World Bank or the vi A Risk Management Approach to Climate Adaptation in China Abs tract This discussion paper provides the analytical The paper begins by defining key concepts backdrop for a series of papers on managing and establishes the context for climate risk climate- and weather-related risks in China. management and adaptation in China. It then It reviews and synthesizes the growing outlines a step-by-step process for a risk- literature on risk-based management centered approach to adaptation. The focus approaches to climate change adaptation and of the process is on planning for adaptation, offers guidance on a process for decision- not policy implementation. The papers making. Managing risks from severe that follow in the series take the general weather, present-day climate variability, framework set out by this paper and apply it and future climate change is integral to to different sectors, including transportation, China’s development. While the effects of water utilities, urban planning, and forestry. future climate change are deeply uncertain,   this uncertainty should not preclude action. Risk management is in essence a process for designing, implementing, and evaluating policies in the face of such uncertainty. A Risk Management Approach to Climate Adaptation in China vii Abbre v iation s CBA cost-benefit analysis CCCPC Central Committee of the Communist Party of China CLIMA Climate Risk Management and Adaptation in China CMA Chinese Meteorological Administration DRM disaster risk management EAP East Asia and Pacific ESMAP Energy Sector Management Assistance Program FYP Five-Year Plan GCM general circulation model or global climate model GDP gross domestic product IEUA Inland Empire Utilities Agency IPCC Intergovernmental Panel on Climate Change IRS Institutional Readiness Scorecard M&E monitoring and evaluation MOST Ministry of Science and Technology OECD Organisation for Economic Co-operation and Development NARCC National Assessment Report on Climate Change NDRC National Development and Reform Commission NGO nongovernmental organization NPV net present value R&D research and development RDM robust decision making ROA real options analysis UKCP09 UK Climate Projections 2009 UNFCCC United Nations Framework Convention on Climate Change A Risk Management Approach to Climate Adaptation in China ix Abbreviations x A Risk Management Approach to Climate Adaptation in China Introd uct ion This discussion paper provides the analytical to different sectors, including transportation, backdrop for a series of papers on managing water utilities, urban planning, and forestry. climate- and weather-related risks in China. The primary audience for the paper includes It reviews and synthesizes the growing development planners and practitioners in literature on risk-based management public agencies in China who are responsible approaches for climate change adaptation for making investments, plans, and policies and offers guidance on a process for decision in climate-sensitive sectors. The risk making. Managing risks from severe management approach to climate change weather, present-day climate variability, adaptation is still relatively new in China, and future climate change is integral to though it is beginning to gain traction. China’s development. While the effects of This paper aims to strengthen the case for future climate change are deeply uncertain, risk-based adaptation planning in China this uncertainty should not preclude action. by demonstrating how the process works Risk management is in essence a process for within the Chinese context and providing designing, implementing, and evaluating practical examples from other countries. The policies in the face of such uncertainty. secondary audience for this paper includes planners and practitioners in the World Bank The paper begins by defining key concepts and other international donor organizations. and establishes the context for climate risk The World Bank was one of the early management and adaptation in China. It then proponents of climate risk management. It outlines a step-by-step process for a risk- now requires that climate risks be considered centered approach to adaptation. The focus in its country strategies as well as projects in of the process is on planning for adaptation, sensitive sectors (van Aalst 2006; Carter et al. not policy implementation. The papers 2007; see also IDA Executive Directors 2011). that follow in the series take the general framework set out by this paper and apply it A Risk Management Approach to Climate Adaptation in China 1 Introduction 1. Risk, Uncertainty, Risk alternative outcomes” (Lempert, Popper, and Management, and Adaptation Bankes 2003, xii). In everyday usage, the idea of risk is invariably tied to the possibility of suffering How the earth’s climate will change many some form of danger, harm, or loss. From a decades or centuries in the future is deeply strictly technical perspective, though, risk is uncertain. There are at least three sources of defined more broadly as the product of how uncertainty associated with climate change likely an event is to happen and what the (Hallegatte et al. 2012): consequences of that event are. 1 • Development pathways, or demographic Uncertainty is closely tied to the concept and socioeconomic trends that affect of risk. In a way, risks and uncertainties emissions of greenhouse gases and the represent different levels of ignorance about resilience of societies to the resulting the future. At one end of the spectrum are changes in the climate; risks—or “known unknowns” for which we • Scientific uncertainty, which reflects have definite knowledge about the chance of our limited knowledge about how an event occurring and whose likelihood can the earth’s climate and other natural be described with a single set of probability systems function; and distribution curves. Such routine variability • Natural variability, referring to is employed by engineers in designing the “chaotic behavior of the climate infrastructure, for instance in building a dike system” and inherent unpredictability to protect against a one-in-100-year flood or randomness of weather. (that is, a level of river flooding that has a 1 percent chance of being reached in any given The degree to which each of these sources year). At the other end of the spectrum are of uncertainty contributes to the overall uncertainties—events for which probabilities envelope of uncertainty varies. At the micro are ambiguous, imprecise, or immeasurable.2 or regional scale and in dealing with time Deep uncertainty exists where there is frames of a few years, the biggest source ignorance or disagreement about “(1) of uncertainty is usually natural variability the appropriate conceptual models that associated with local or regional weather, describe the relationships among the key topography, and hydrology. At the global driving forces that will shape the long- scale and in dealing with time frames of many term future, (2) the probability distributions decades or centuries, the unknown pattern used to represent uncertainty about key of future development and limits to scientific variables or parameters in the mathematical knowledge are the dominant sources of representations of these conceptual models, uncertainty (see figure 1; Yip et al. 2011). and/or (3) how to value the desirability of 1 This definition is based on ISO 31000:2009, “Principles and Guidelines on Implementation,” issued by the International Organization of Standards to offer guidance on managing risk. 2 These two levels of ignorance were famously described by economist Frank H. Knight in his 1921 book Risk, Uncertainty, and Profit. Knight distinguishes between what he calls “risk,” which is measurable, and what he calls “true uncertainty,” or “that higher form of uncertainty not susceptible to measurement and hence to elimination” (Knight 1921, I.I.15, III.VII.47). Others have pointed out that beyond Knightian uncertainty, where we at least know what is uncertain, there is an even more fundamental level of ignorance, where even the event itself is a surprise (see Dobes 2012). 2 A Risk Management Approach to Climate Adaptation in China Introduction Figure 1: Sources of Uncertainty in Projections for Changes in Decadal Mean Precipitation, Globally and in Southeast Asia a. Uncertainty in Global, ANN decadal mean precipitation b. Uncertainty in South East Asia, JJA decadal mean precipitation Fraction of total variance (%) Fraction of total variance (%) Lead time (years from 2000) Lead time (years from 2000) Source: Hawkins and Sutton 2011. Note: Orange shows natural variability (or what Hawkins and Sutton call “internal variability”) as a share of total uncertainty or variance in the climate model results; green represents uncertainty from development pathways (“scenario uncertainty”); and blue is scientific uncertainty (“model uncertainty”). Climate risks are potential impacts from There is strong evidence that climate change severe weather, variability in the kinds of is altering the profile of hazards (IPCC weather experienced, or long-term changes in 2012; see figure 2). In China, for example, the weather.3 Climate risks are both physical the observed frequency and severity of and social in nature. The physical dimension extremely heavy rain storms since the 1950s of climate risk has to do with the existence have significantly increased across the South of weather- and climate-related hazards. A and Southwest (Wang and Qian 2009; Zhai et hazard is defined simply as the potential al. 2005). In the North and Northeast, future for a harmful event to occur. Hazardous climate scenarios show that interannual climate events range from discrete, recurrent variability in rainfall may increase along events such as tropical cyclones, to gradual with rainfall from short, intense storms. shifts such as drier winters, to previously More than three-quarters of the precipitation unseen events such as the collapse of the in the North and Northeast could come from Antarctic ice sheet. The physical profile of days of heavy rain (Shi et al. 2010; Gao, Shi, climate hazards may be described in terms of and Filippo 2011; Gao et al. 2012a, 2012b; intensity, frequency, timing, persistence, or NARCC 2011).4 These shifts imply that recent geographic distribution. 3 These impacts cannot easily be classified as “good” or “bad.” In both popular and scientific discussion on climate change, there is a strong tendency to stress negative outcomes and underplay positive ones, but this is not helpful for any serious analysis of risks. An increase in average temperatures may be associated with a higher probability and/or severity of heat waves (causing heat- related illnesses) or droughts or tropical storms, all of which will increase the level of weather-related losses. But, equally, it may be associated with lower heating requirements, a longer growing season, higher crop yields, and less damage to roads and other structures caused by freeze-thaw cycles. Any analysis of climate risks that focuses solely on the probability of negative outcomes and neglects positive outcomes will give a misleading impression of the distribution of the overall impact of climate change on income or welfare. 4 For more details on observed and expected trends in climate hazards in China, please see Sall (2013). A Risk Management Approach to Climate Adaptation in China 3 Introduction history is becoming less useful as a guide for Figure 2: Effects of Changes in Temperature the future, especially over the longer term as Distribution on Extreme the effects of deep uncertainty become more pronounced, and climate conditions diverge more from what is considered normal today (see box 1). The shifts illustrated in figure B1.1 do not imply that climate change will be gradual or will occur evenly across all regions (see Solomon et al. 2007). Climate change is nonlinear. As global temperatures rise more than 2°C above preindustrial levels, social and ecological tipping points will be crossed, and the possibility for surprises and abrupt changes will increase (Potsdam Institute 2012). Abrupt changes include the massive die-off and disintegration of corals as atmospheric concentrations of carbon dioxide (CO2) rise and ocean waters become much more acidic. It is virtually impossible to predict when such “regime shifts” (or sudden, catastrophic, and lasting changes to ecosystem structure and function) will occur, given the inherent complexity of natural systems, limited scientific knowledge, and the effects of other pressures (Folke et al. 2004; Elmqvist et al. 2010; Scheffer and Source: IPCC 2012 Carpenter 2003; Scheffer et al. 2001). Obviously, the mere occurrence of severe Construction in floodplains, mass migration climate or weather events such as storms to densely populated cities in coastal deltas, or flooding does not by itself explain the destruction of mangroves and coastal damage these events inflict. Weather wetlands that buffer against storms, and disasters are not really “natural” as much as the weak enforcement of building or zoning the result of uneven development processes codes can heighten exposure. Given a certain that heighten exposure and vulnerability level of exposure, vulnerability is the degree (World Bank and UN 2010; Cardona et to which people or assets are susceptible al. 2012). Exposure refers to the location to being harmed or unable to adjust to the of people or assets in hazard-prone areas. effects of climate hazards. There are many Levels of exposure are influenced by patterns dimensions to vulnerability—including of social and economic development. social, cultural, political, economic, and 4 A Risk Management Approach to Climate Adaptation in China Introduction Box 1  Climate Analogues—WillBox 1: Climate  BeijingAnalogues—Will  and Gansu Be Like Beijing  Hainan and Gansu  and Be Like  Yunnan?   Hainan and Yunnan?   One way of putting shifts in weather and climate conditions in perspective is to think of climate “analogues.” For example, Onethe way  of putting climate in the in  shifts of Paris  weather 2080s could and be a climate  conditions lot like that of Madrid  in  perspective in  is to think the 1970s (Hallegatte,  of climate Hourcade,  “analogues.” and   For  Ambrosi 2007; Kopf, Ha-Duong, and Hallegatte 2008). An architect in Paris designing a building meant to last 80 years or more would face   example,   the   climate   of  Paris  in  the   2080s   could   be   a   lot   like   that   of  Madrid   in  the  1970s   (Hallegatte,  Hourcade, and  Ambrosi 2007; Kopf, Ha‐Duong, and Hallegatte 2008). An architect in Paris designing a building meant to last  the challenge of dealing with a much wider range of climate conditions than experienced in the past. As figure B1.1 shows, years or 80 average  more would face the challenge of dealing with a much wider range of climate conditions than  summer temperatures in Beijing in the 2080s are projected to be the same as summer temperatures in Hainan experienced in the past. As figure B1.1 shows, average summer temperatures in Beijing in the 2080s are projected  during the 1970s (about 27°C). Likewise, summer temperatures in Gansu in the 2080s are projected to be warmer than those to be the same as summer temperatures in Hainan during the 1970s (about 27°C). Likewise, summer temperatures  observed in Yunnan in the 1970s (about 20°C). in Gansu in the 2080s are projected to be warmer than those observed in Yunnan in the 1970s (about 20°C).     Figure Figure  B1.1  Projected B1.1: Summer Projected Temperatures  Summer in 2080s  Temperatures versus  in 2080s Temperatures  versus in 1970s  Temperatures  in 1970s  Beijing summers in the 2080s  may be as warm as . . .  Gansu summers in the 2080s  may be warmer than . . .   . . . Yunnan summers  in the 1970s  . . . Hainan summers  in the 1970s    Source:  Downscaled Source:  climate Downscaled  projection climate  data for projection data China  obtained for China  fromfrom obtained  The Nature  Conservancy’s The Nature Conservancy’s  “Climate  Wizard” “Climate  site, Wizard”   site, http://www.climatewizard.org/ http://www.climatewizard.org/  (accessed (accessed  June  2013).. June     2013).. Note: Note: Projections  for average Projections  summer for average  (June(June-August) summer ‐August) temperatures temperatures  for Beijing  and and for Beijing Gansu  in the Gansu in 2080s  represent the 2080s  the the represent median  values   of   30 ‐year   averages   generated   by   an  ensemble   of   16   global   climate   models median values of 30-year averages generated by an ensemble of 16 global climate models for a middle-of-the-road  for   a   middle ‐of ‐the ‐ road   emissions  scenario.  Temperatures emissions  in  the 1970s scenario.  represent an Temperatures  average in the 1970s  of observed represent values  for 1950 an average ‐2002. No of observed  data are values available for for  1950-2002.  Taiwan. No   data are   for Taiwan. available   The shifts illustrated in figure B1.1 do not imply that climate change will be gradual or will occur  evenly  across all regions environmental—and many (see Solomon ways of et  al. 2007). Climate framing may be  change  is nonlinear. the product  As global of low levels  temperatures of public   rise more than 2°C above preindustrial levels, social and ecological tipping points will be crossed, and  its causes. The factors that contribute to investment in building or maintaining the possibility for surprises and abrupt changes will increase (Potsdam Institute 2012). Abrupt changes  vulnerability include the massive are both ‐off and dependent  diecontext disintegration and of coralsexisting infrastructure,  as atmospheric weak of  concentrations enforcement  carbon dioxide  multiscale (CO2) rise and (Adger watersAdger  ocean 2006;  become et al. 2007;  much  more acidic. of  standards, poorly coordinated It is virtually impossible  to predict whenplanning such  “regime shifts” Cardona et al.  2012). (or sudden, At the  catastrophic, household  and  lasting changes level, processes,  to ecosystem structure and and the  sensitivity  function) of outcomes  will  occur,  given   the  inherent  complexity vulnerability is often linked to poverty, poor  of  natural  systems,  limited  scientific  knowledge, (for example, agricultural income or  and  the  effects  of  other pressures (Folke et al. 2004; Elmqvist et al. 2010; Scheffer and Carpenter 2003; Scheffer et al.  health, lack of education, weather-sensitive hydropower production) to weather and 2001).    livelihoods (such as rain-fed farming), climate conditions. Table 1 shows some of social marginalization, Obviously, and lack  the mere occurrence  of of access  severe  climate the  or different factors weather events  suchaffecting  as storms different  or flooding types does  not  by  itself  explain  the  damage to safety nets such as public crop insurance  these  events  inflict.  Weather  disasters of vulnerability.  are  not  really  “natural”   as   much   schemes. At the sector level, vulnerability 9    A Risk Management Approach to Climate Adaptation in China 5 Introduction Table 1: Types of Vulnerability and Influencing Factors Type of vulnerability Influencing factors Individual or household vulnerability Low education, poor health, old-age dependents in household, livelihood tied to weather conditions (e.g., rain-fed agriculture), past disaster experience Social vulnerability Poverty, isolation, racial discrimination, lack of access to social security services Institutional vulnerability Ineffective policies, disorganized and noncommitted public and private institutions Economic vulnerability Financial insecurity, lack of national income and funds for disaster prevention and mitigation Physical vulnerability Poor environmental practices, unprecedented population growth and migration Source: World Bank 2012a. Climate risks are but part of the broader Actions to reduce or manage climate risks array of risks that can affect a country’s are often grouped into two broad categories: development (van Aalst 2006). Climate risks mitigation and adaptation. Mitigation are compounded by other pressures, such activities reduce climate risks by reducing as the loss or degradation of natural habitat, emissions of greenhouse gases, thus limiting the overdraft of scarce water resources, and the possibility of long-term global warming. pollution. There are numerous examples However, the overwhelming scientific in China of how climate impacts have been consensus is that the global climate is already amplified by other pressures. Nutrient changing (IPCC 2007). With the current level loading from inland agricultural runoff of CO 2 concentrations in the atmosphere and lower oxygen levels due to higher and the inertia of the global climate system, temperatures have created “dead zones” continued change is inevitable—even if in coastal waters in the Southeast (Wei et emissions are cut to zero today. Moreover, al. 2011). In the South and Southwest, the countries are already exposed to varying rapid expansion of monoculture plantations, high levels of risks from extreme weather along with hotter conditions and more events and present-day climate variability. frequent extreme precipitation events, have Thus, the imperative for adaptation —a made forests more susceptible to pests and “process of adjustment to actual or expected disease outbreaks (Allen et al. 2010; Sturrock climate and its effects, in order to moderate et al. 2011; Xu et al. 2009). In the North and harm or exploit beneficial opportunities” Northeast, annual flow volumes measured (IPCC 2012, 5)—is clear. in the Songhua, Liao, Hai, and Yellow Rivers have declined since the 1950s. Only part of this decline is due to drier conditions; rapid growth in the demand for water by cities, agriculture, and industry has played an even larger role (NARCC 2011). 6 A Risk Management Approach to Climate Adaptation in China Introduction Adaptation covers a wide range of responses In many ways, development is still the to actual or anticipated changes in climate best form of adaptation, but this does not conditions. From a risk management mean development as usual (World Bank standpoint, anticipatory measures help a 2010b). As Ranger and Garbett-Shiels (2012, society avoid damages from weather- and 298) argue, “Climate change strengthens climate-related hazards. Reactive adaptation the case for pushing faster and harder on measures help societies withstand or recover development priorities and investments... from the impacts of hazardous events. A with a greater awareness of long-term risks”. mix of both hard (capital-intensive) and soft Economic development provides resources (institution- and policy-based) solutions and opportunities for people to adapt to is needed. As researchers from the World change. Managing risks from severe weather Bank have commented, “There is no point in and climate variability enhances adaptability building the best type of road in the wrong to change and improves welfare. Planning place, while the best institutions will provide for future climate change safeguards the no protection against a storm that destroys long-term gains of development and better buildings or power lines” (World Bank prepares a society for the range of uncertain 2010b, 94). environmental, economic, and social impacts associated with rapid urbanization and growth. A Risk Management Approach to Climate Adaptation in China 7 Introduction 2. Overview of Climate Change provinces followed by developing their Adaptation and Disaster Risk own climate change strategies. An updated Management in China national strategy on climate change for Since first appearing on the political agenda 2011–2020 and national climate adaptation in China in the 1980s, climate change strategy are being drafted, but they have not has been increasingly viewed by China’s yet been finalized or made public as of the government as an important domestic issue.5 time of writing.6 The growing concern over the risks posed by climate change to China’s social and At the top of China’s institutional hierarchy economic development is evident in the 12th for climate change adaptation is the National Five-Year Plan (FYP) (2011–2015), which Leading Group on Climate Change, 7 a groups climate change together with energy superministerial group of 27 agencies and security and natural resource security as key entities that is headed by the premier (State challenges to sustainability. Council 2007). Since the National Leading Group was established in 2007, 28 of the 31 The guiding principles and priorities for provinces8—and many more municipalities climate change adaptation in China are and counties—have also set up climate articulated in China’s National Climate change leading groups. Leading groups for Change Program, released in 2007 (NDRC climate change have also been established 2007). The program states that climate within line ministries and agencies, including change adaptation should be placed the State Forestry Administration. The “within the framework of sustainable leading groups are in a unique position to development,” given equal priority with coordinate climate risk management actions mitigation (in reducing the risks of climate across sectors. However, in practice, leading change to development), and “integrated” groups in the provinces have given relatively (mainstreamed) with other areas of policy low priority to climate change adaptation making. Priority areas for climate adaptation and have instead concentrated their attention as identified in the program are agriculture, on renewable energy investments, Clean water resources, forestry, ecosystems Development Mechanism projects, and other management, and coastal zone management. initiatives that are seen as yielding more China’s Second National Communication immediate benefits to the local economy (Ye on Climate Change, submitted to the United et al. 2008). Nations Framework Convention on Climate Change (UNFCCC) in 2012, also lists public The secretariat for the National Leading health as a priority for climate adaptation Group is housed in the Climate Change (NDRC 2012b). After the National Climate Office of the National Development and Change Program was introduced, many Reform Commission (NDRC). The NDRC 5 See Stensdal (2012) for a summary of the evolution of China’s climate change policies and interests. 6 See “Xie Zhenhua Opening Remarks at State Council Press Office Press Conference,” http://www.china.com.cn/zhibo/zhuanti/ ch-xinwen/2012-09/17/content_27184746.htm; see also NDRC (2012a). 7 Formally referred to as the “National Leading Work Group on Climate Change, Energy Conservation, and Reducing Emissions.” 8 These figures include provincial-level cities and other provincial-level administrative regions. 8 A Risk Management Approach to Climate Adaptation in China Introduction exercises wide-ranging powers over social Communist Party of China (CCCPC), State and economic development policy in China Council, NDRC, People’s Liberation Army, and has assumed a dominant role in the all of the ministries, and Red Cross Society making of climate change policy (Heggelund of China— and currently chaired by Wang 2007; Rommeney 2008; Stensdal 2012). Yong, CCCPC and State Council member.10 Besides the NDRC, the Ministry of Foreign Twenty-seven of the 31 provinces have Affairs is leading China’s participation in also established committees for disaster international climate talks. The Ministry of reduction. Guiding principles and priorities Science and Technology (MOST) handles for action on DRM in the 12th FYP are laid the technical aspects of the international out in the National Plan for Comprehensive talks and, together with the NDRC and the Disaster Risk Reduction (2011–2015) (State Ministry of Finance, oversees public support Council 2011). for researching, developing, and deploying new climate-relevant technologies. The China is a vast country, spanning many State Forestry Administration and Ministry different regional climates, with hundreds of Water Resources are the key agencies of millions of people living in hazard- responsible for developing policies and prone areas, such as in low-lying deltas strategies to manage climate risks to natural and along active fault lines. Annual losses resources and ecosystems. Together with from weather-related disasters average MOST and the Chinese Academy of Sciences, 1 to 3 percent of gross domestic product the Chinese Meteorological Administration (GDP). 11 China’s high level of exposure (CMA) has taken the lead in researching to natural hazards and long history of the impacts of severe weather, climate disasters no doubt play a large role in the variability, and climate change. 9 The CMA high priority attached to DRM. As evidence has also played a leading role in advocating of its commitment, China has done better the principles of climate risk management, than most countries on indicators of especially in relation to the risks from progress toward implementing the Hyogo weather disasters. Framework for Action on DRM (figure 3). These indicators include measures of The disaster risk management (DRM) government and institutional arrangements community in China has its own institutional for DRM, investments in risk reduction hierarchy apart from the climate adaptation measures, identification and provision of community. At the helm is the National risk information (for example, early warning Committee on Disaster Reduction, composed systems), and planning and support for of leaders from 34 different entities— disaster response. including the Central Committee of the 9 For a description of the respective roles played by the various ministries and agencies, see the most recent of the annual progress reports on climate change, issued by the NDRC each year since 2008 (NDRC 2012a). 10 The secretariat for the National Committee is housed in the Ministry of Civil Affairs. 11 See the companion paper on trends in weather and climate risks (Sall 2013). A Risk Management Approach to Climate Adaptation in China 9 level of exposure to natural hazards and long history of disasters no doubt play a large role in the high  priority attached to DRM. As evidence of its commitment, China has done better than most countries on  indicators of progress toward implementing the Hyogo Framework for Action on DRM (figure 3). These  indicators include measures of government and institutional arrangements for DRM, investments in risk  Introduction reduction measures, identification and provision of risk information (for example, early warning  systems), and planning and support for disaster response.      Figure Figure 3: Progress  3  Progress of Countries  of Countries towardtoward Implementing  Implementing the  the Hyogo Hyogo Framework  Framework  for Action for Action (2011)   (2011) 5 China Progress Scale 4 3 2 1 0 Antigua and… Palestinian… Turks and Caicos… British Virgin… Kyrgyzstan Burundi Timor‐Leste Madagascar Nicaragua El Salvador Georgia Myanmar Chile Comoros France Sweden Colombia St. Kitts and Nevis Poland Armenia Monaco Bolivia Germany Turkey Paraguay Honduras Panama Syria Argentina Guatemala St. Lucia Nepal Moldova Yemen Lesotho Switzerland Norway Nigeria Croatia Finland Romania Sierra Leone United States Algeria Ghana Sri Lanka Uruguay Mauritius Canada Barbados Seychelles Zambia India Tanzania Dominican Republic Peru Malawi Costa Rica Togo Côte d'Ivoire Cuba China Mexico Australia Portugal Senegal Burkina Faso Czech Republic Egypt Morocco Brazil Vietnam Bahrain Bhutan Maldives Botswana New Zealand Ecuador Namibia Cayman Islands Indonesia Anguilla Source: UNISDR 2011.   Source: UNISDR 2011. Note: A score of 5 indicates “comprehensive achievement” of framework commitments.  Note: A score of 5 indicates “comprehensive achievement” of framework commitments.   Like  many countries, Likemany countries,  China  continues China  to focus its continues  DRM infrastructure to efforts primarily on  the episodic and development  rather than   projects. continuous treatment of risk.12 Disaster response commands the greatest attention, particularly for local  focus its DRM efforts primarily on the A number of provinces and municipalities governments (Dong 2011). There are signs of a change, however, and a growing emphasis on risk  episodic rather management than  For  as a process. continuous  example, the treatment  Regulations for have already  Prevention  and issued or are  Reduction currently drafting  of Meteorological   12 Disasters,  by the response Disaster of risk. issued State Council commands  in 2010 (State the  Councilimplementation rules for  2010), require that provincial, the national  municipal,   and attention, integrate  county governments greatest  DRM into particularly for local  development local  planning (such regulations  as local FYPs and on preventing and  urban reducing   master plans) and that they provide budgetary support for DRM activities. Each level  of  government  is   governments (Dong 2011). There are signs of weather disasters. 13 responsible for drawing up a weather disaster risk reduction plan that assesses current risks in the local  a change, areas however,  and establishes and  a  targets, growing priorities,  andemphasis  plans for disaster prevention and management. Following  on risk management administrative  regulations issued as by a  the process.  CMA in 2008 For (CMA One  2008),of the  local challenges  governments  are for climate also required   risk to  perform  “climate  feasibility”   assessments example, the Regulations for Prevention and  for  major  infrastructure  and  development  projects. management in China will be to reconcile the  A   number of provinces and municipalities have already issued or are currently drafting implementation  Reduction of Meteorological Disasters, issued two disparate policy spaces occupied by the rules for the national regulations on preventing and reducing weather disasters.13   by  the State Council in 2010 (State Council climate adaptation and DRM communities. 2010), require that provincial, municipal, One of the challenges for climate risk management in China None of be  will the  toleaders  reconcile in  the the twoNational  disparateDisaster   and spaces policy county  occupied  by the climate governments  adaptation integrate DRM and DRMReduction  communities.  None of the Committee are leaders in the part  of the  National National Disaster Reduction Committee are part of the National Leading Group on Climate Change, for  into local development planning (such as Leading Group on Climate Change, for local FYPs and urban master plans) and example.14 The CMA, which carries primary                                                              regulatory authority for managing risks from 11that they provide budgetary support for  See the companion paper on trends in weather and climate risks (Sall 2013).   See Ranger and Fisher (2012) for efforts of other countries.  weather disasters and plays a leading role 12DRM activities. Each level of government 13 is   Theresponsible  provinces in question for drawing up a weather  include Guangdong, in  Tianjin, Guangxi, researching  Yunnan, and  Hebei, Hubei, providing  Guizhou, information  Fujian, and  Anhui. The municipalities include Suzhou, Xiamen, and Dalian.  disaster risk reduction plan that assesses on climate change trends and impacts, has current risks in the local areas an d  13 so far acted as the main bridge between the   establishes targets, priorities, and plans two communities. The lack of integration for disaster prevention and management. between the communities is a challenge that Following administrative regulations issued China shares with many other countries (Lal by the CMA in 2008 (CMA 2008), local et al. 2012). Linking these communities will be governments are also required to perform crucial for ensuring coordinated planning and “climate feasibility” assessments for major action across sectors for risk management. 12 See Ranger and Fisher (2012) for efforts of other countries. 13 The provinces in question include Guangdong, Tianjin, Guangxi, Yunnan, Hebei, Hubei, Guizhou, Fujian, and Anhui. The municipalities include Suzhou, Xiamen, and Dalian. 14 This is because the members of the National Disaster Reduction Committee are all of lower administrative rank than members of the National Leading Group on Climate Change. 10 A Risk Management Approach to Climate Adaptation in China Introduction 3. A Risk-based Approach to change (World Bank 2010b). The China of Climate Change Adaptation in 2030 or 2050 will look very different from China the China of today, and it is impossible to Sector-level planning for climate change forecast with confidence how these changes adaptation is about making decisions in the will unfold. face of deep uncertainties. The problem of deep uncertainty is not unique to climate Policy decisions that are most affected by the change. Policy makers deal with deep deep uncertainties of climate change include uncertainties all the time when making the following: decisions contingent on unpredictable future situations such as international • Long-lived investments with high sunk exchange rates, energy costs, research and costs (such as in the sectors listed in development (R&D) outcomes, and actions table 2), by other countries. The mere existence of • D e c i s i o n s w i t h i r r e v e r s i b l e deep uncertainty should not prevent policy consequences (related to species loss makers from making decisions now about or regime shifts in ecosystems, for how to manage climate risks (Hallegatte example) 2009), and waiting for improved knowledge • Decisions that constrain future options to reduce uncertainties before acting is not (related to land use in flood plains, for a viable strategy. While progress in climate example) science and technology will help reduce uncertainty about climate change over the • Decisions with long lead-in times long term, this reduction will not happen (especially for large infrastructure within a few years. Over the past 40 years, projects) as knowledge of the climate has improved, and the climate models have grown more Moreover, the effects of natural variability of complex, the envelope of uncertainty in local weather, topography, and hydrology projections has not narrowed (Weaver mean that the sensitivity of policy decisions et al. 2013). More fundamentally, the to climate change uncertainty may be even climate science cannot solve the problem higher for policies targeted for specific of predicting societal choices, long-term locations. development pathways, and technological Table 2: Sectors Sensitive to Climate and Weather Hazards with Long Investment Time Scales Sector Typical investment decision lifespan Water infrastructure (e.g., dams and reservoirs) 30–200 years Land use planning (e.g., in flood plains or other hazard-prone areas) More than 100 years Coastline and flood defenses (e.g., dikes and seawalls) More than 50 years Building and housing (e.g., thermal design properties) 30–150 years Transportation infrastructure (e.g., ports, roads, and bridges) 30–200 years Urban spatial planning More than 100 years Energy production (e.g., thermal power plants) 20–70 years Source: Based on Hallegatte 2009. A Risk Management Approach to Climate Adaptation in China 11 Introduction The risk-based approach to climate change scenarios? In particular, is it possible to adaptation is underpinned by the belief identify “no regrets” measures that can that uncertainty—even deep uncertainty— be justified under almost any future can be man a g ed. I n b roa d t erm s , t h e development outcomes? risk management process of planning • Flexibility. Is it possible to adjust for adaptation involves four main steps: policies or the design of investment (1) framing the decision; (2) assessing programs so as to preserve flexibility to risks; (3) identifying and prioritizing respond to changes in circumstances? adaptation options; and (4) planning for For example, what is the additional implementation. As illustrated in figure cost of upgrading coastal defenses 4, the process is iterative. Each step is progressively rather than trying to interconnected, and conclusions reached at forecast the extent of sea-level rise over earlier steps may need to be adjusted when the next 50 or 100 years? information generated by later steps is taken into account. The process works best when Aiming to answer these questions, the risk it is designed to support the achievement of management process is driven by policy, not existing goals and priorities and is made part prediction (Jones and Preston 2011; Ranger et of existing policy-making processes (that is, al. 2010; Dessai et al. 2009; Wilby and Dessai when it is mainstreamed). 15 2010; Carter et al. 2007). Here, it is worth pointing out how the policy-driven approach The process aims to answer some practical differs from more traditional, prediction-led questions faced by the adaptation planner approaches to climate change adaptation. The making decisions in the face of deep risk management process begins by framing uncertainty. These include questions about the policy context—establishing what the timing, robustness, and flexibility: goals are for the development of the sector and how these goals may be jeopardized • Timing. Is it necessary to make a long- by severe weather, climate change, and term decision now? What is the payoff other risks such as the loss of natural from waiting in order to collect more ecosystems. The nature and context of the information relative to the reduction decision determine what kind of scientific in costs or damages that might be information is needed, what economic or achieved by acting now? If there is decision-support tools will be used, and how a case for waiting, what information adaptation options will be evaluated. By should be collected to inform a future contrast, the standard “predict-then-act” or decision, and what threshold should be “science-first” approach begins with a set of set for taking such a decision? predictions or projections of future climate • Robustness. What kinds of policy change impacts, typically using outputs from or investment make sense under a global climate models (GCMs). The decision wide range of economic and climate is then defined according to these impacts. 15 The process outlined in this paper draws primarily from Willows and Connell (2003) and Ranger et al. (2010). 12 A Risk Management Approach to Climate Adaptation in China Introduction Figure 4: Risk Management Process for Adaptation Planning Figure 4  Risk Management Process for Adaptation Planning    Frame the decision 1. Define sego Step 1: Frame the decision   What is the policy or investment decision at hand?  Establish goals  Define  Identify   What targets are set in policies at the national and subnational level for  and objectives  boundaries  stakeholders  the sector to achieve by 2015/ 2020?  What are the longer‐term goals?   What indicators of economic, social, and environmental well‐being will  measure the progress of the sector toward achieving those goals?   What is the planning horizon?  Assess risks   How are the boundaries of the sector defined?   Where will the actions be taken or investments made?   Who will be affected by the policy or project, and what agencies or  Screen for exposure and vulnerability  entities have say in implementing the project?  to present‐day risks  Explore scenarios of future changes in  Step 2: Assess risks  the profile of risks   What is the current level of exposure and vulnerability to hazards?   What are the potential impacts of those hazards on the sector in terms  of frequency, timing, magnitude, and persistence?    What is the vulnerability of the sector to those impacts given current  Identify and evaluate options  and future levels of exposure, sensitivity, and adaptive capacity?   What are scenarios for how risks may change in the future?   Define criteria or  metrics for success Step 3: Identify and evaluate adaptation options Identify adaptation   What candidate measures exist to manage risks to the sector?  options   What is the timing and scale of each proposed action?   What metric (e.g., robustness or cost‐effectiveness) should be used to  determine the “best” option?  Weigh the robustness and   Which option performs best under the chosen metric?  cost‐effectiveness of options  for achieving success  Step 4: Develop an action plan   What are the barriers to implementing, both internal (controllable) and  Develop an action plan   external (noncontrollable)?   What are the priority steps that should be taken, and when?    How will the strategy be monitored and evaluated?  Identify barriers to  implementation  Plan to monitor and  evaluate   Decision path   Feedback loop Implement  Source: author, drawing from Willows and Connell (2003) and Ranger et al. (2010). The seven-step climate impact assessment two 16  approaches is how information about   process of the International Panel on Climate climate risks enters into the adaptation Change (IPCC) is a classic example of the policy decision (Weaver et al. 2013; Brown standard approach (see Carter et al. 1994). et al. 2012). The predict-then-act approach puts the scientific impact assessment out in The distinction between risk-based and front of the decision, while the policy-led traditional impact-led approaches may approach fits the scientific assessment within seem subtle, but it is important in practice. the decision-making process, with the belief One of the key differences between the that scientific information is more likely to A Risk Management Approach to Climate Adaptation in China 13 Introduction be effectively utilized when it is viewed as makers will invariably have to make “credible, salient, and legitimate” by the normative choices about how much risk people who use it (Weaver et al. 2013, 42). is acceptable and for whom (Jones and Because it is not prediction based, the policy- Preston 2011). Values and preferences play led approach is also more amenable to the an increasingly important role in cases “exploratory” use of climate models. Model where there are no objective probabilities outputs are treated as plausible (though and uncertainty is pervasive (Anand 2002). not necessarily probable) scenarios for how Consulting and communicating with the climate could change under certain stakeholders is thus a core part of the risk assumptions about the future world, and management process (Jones 2001; Carter et then vulnerabilities of policy decisions under al. 2007; Jones and Preston 2011). Key points these scenarios are explored. for stakeholder input include framing the decision (that is, setting goals), defining Decision-support tools are available to risk thresholds, and establishing criteria for assist policy makers at various steps of the selecting the “best” adaptation option. adaptation planning process.16 The World Bank’s online Climate Change Knowledge Step 1: Frame the Decision Portal offers a useful entry point to access a The risk management process begins with range of tools and climate data resources.17 questions about what needs to be decided In addition, the World Bank is developing a and what the priorities are, and about framework to assess vulnerability to climate “what really matters” with regards to the change in all of its country strategies and development of the sector. Asking the right analyze potential climate impacts on projects questions at the outset and articulating in sensitive sectors such as agriculture and the process increase the likelihood that the water resource management. The sector policy-making process will be successful guidelines will provide development (Jones and Preston 2011). Elements of practitioners in World Bank and framing the decision include setting goals, International Development Association client defining boundaries, and identifying key countries with a structured, questionnaire- stakeholders. based process to screen projects for potential climate risks—essentially “due diligence” for Define the decision. Severe weather, present- climate-smart development (see box 2). day climate variability, and future climate change represent but a piece of the broader Even though rigorous economics-based spectrum of risks to development in China. methods and tools exist to aid in decision In broad terms, the question for Chinese making, the risk management process is policy makers “is not ‘How can we minimize ultimately as much art as science. Policy 16 Hammill and Tanner (2011) have evaluated a variety of decision-support tools, which they group into three categories: process- based tools that guide users through the steps of the decision, data or information tools that provide information on risks, and knowledge-sharing tools that allow users to exchange experiences and ideas for adaptation. For a collection of decision-support tools and practical guidance on what kind of tools can be used for different kinds of project and policy decisions, see the “Climate Planning” meta-tool developed by Ecofys and the Institute of Development Studies for the Climate and Development Knowledge Network at http://www.climateplanning.org/. 17 The Climate Change Knowledge Portal can be found at http://sdwebx.worldbank.org/climateportal/index.cfm. 14 A Risk Management Approach to Climate Adaptation in China core part of the risk management process (Jones 2001; Carter et al. 2007; Jones and Preston 2011). Key  points for stakeholder input include framing the decision (that is, setting goals), defining risk thresholds,  Introduction and establishing criteria for selecting the “best” adaptation option.    Box 2  Screening for Climate Risks in World Bank Operations    Box 2: Screening for Climate Risks in World Bank Operations The World Bank is developing climate risk screening tools to help client countries better prepare for and deal with  risks The and World  associated  impacts of Bank is developing  a changing climate  climate. risk screening  The tools to help are  tools client intended countries  to  ensure better  that actions prepare for and   to manage deal with risks  risks and   and  associated associated impacts impacts of a  are  consistent changing climate.  with The the  climate tools  change mitigation are intended to ensure that  and  adaptation actions to manage  strategiesrisks   of the and  country.   associated Countries impacts are   have   historically consistent with the climate change   adapted to  climatic   contexts mitigation   that  included and adaptation   seasonal strategies of the  country. variability   and  extreme Countries   events.  have historically adapted  to However, climatic   historical variability contexts that   is   no  longer included seasonal   thevariability   norm,  as and  we   have  events. experienced extreme However,   anhistorical   increased   rate  of variability is  nochange longer   in  climate the norm, conditions as we have  during  the pastan experienced  several increased decades.rate of  This change  trend in   is  likely climate  to  further conditions  accelerate during the past  asseveral  the world  continues decades. This   to  emitis trend   large likely to further accelerate   amounts of  CO2  and as  theotherworld  greenhouse continues to   gases emit  large into amounts the  atmosphere. of CO2 and   The other   impacts greenhouse   of  an   increasingly gases into the   warmer  world atmosphere.  are The  described impacts of an in  a recent World increasingly warmer  Bankworld  report  entitled are described  Turn in  Down a recent  theBank World  Heat:  Why report  a 4°C World entitled Turn Down  Must  Be  the Avoided Heat: Why  (Potsdam a 4°C World  Institute Must Be  2012). Avoided    (Potsdam Institute 2012).   A  A National National   Climate Climate Impact   Impact Screening   Screening (NCIS) tool enables   (NCIS)   tool  enablescountries   to systematically countries identify the climate   to  systematically   identify vulnerabilities   the  climate of   vulnerabilities national programmatic   of  national   programmatic activities and development   activities goals;   and   development it also enables them   goals;   it  also to identify   enables sector   them  to  identify and geographic hotspots. The     sector and   geographic tool builds on existing   hotspots.   The  tool information,   builds including   on that of  existing the World   information, Bank’s Climate   including Change Knowledge  that  of  the   World Portal Bank’s  Climate  . It is  complemented by the  Institutional Change Knowledge Readiness Portal.  It  Scorecard is  complemented (IRS), which   the  Institutional   byprovides   Readiness a rapid assessment   Scorecard of clients’   (IRS), institutional   which and   provides capacity needs  a  for   rapid assessment  of understanding and  clients’ acting  oninstitutional information   andabout  capacity climate   needs risks at   for the   understanding strategic level. By   and   acting allowing   on  information countries to characterize   about  potential climate impacts and capacity (figure B2.1), the two sets of information inform dialogue on the importance and   climate   risks   at   the   strategic   level.   By   allowing   countries   to   characterize   potential   climate   impacts   and   capacity (figure urgency  B2.1),   the  two climate of addressing sets  of   information risks and facilitate   inform   dialogue a systematic   on  the response to capacity importance   and  urgency challenges   of  addressing and resilience building.   climate  risks and facilitate a systematic response to capacity challenges and resilience building.    Figure B2.1 Adaptation Figure B2.1: Adaptation Imperative—Comparing  Imperative—Comparing  Potential Climate Impacts Potential  and Adaptive Climate Impacts  Capacity     and Adaptive Capacity      the AtAt the project project level,  sector-specific  level, sector‐specific  screening screening  tools tools have have been been  developed developed  to better to better  understand understand the risks from the risks  from climate   change climate  change and climate  and climate variability  variability that the investments that  the may  investments be  may be exposed exposed to. Screening  to. climate for potential Screening  for risks potential at  early  climate stages   of project risks  at early design  stages has been  of project developed for design six key has  been developed subsectors (urban water for sixsanitation, and  key subsectors  (urban irrigation  water and and drainage,  sanitation, dams   and reservoir, irrigation land and soil  management,  and drainage, dams  and roads,  reservoir, and  land coastal flood  and soil management, protection). These tools are  roads,  and currently  coastal being  flood tested, and  protection). once finalized These will   be   tools are currently made  being tested, widely available through  and  once various  finalized platforms, knowledge will be made  widely including  available the Climate  Change through  various knowledge Knowledge   Portal at http:// platforms,  including the Climate Change Knowledge Portal at http://climateknowledgeportal.worldbank.org.  climateknowledgeportal.worldbank.org. Source: Kanta Khumari, World Bank.  Source: Kanta Khumari, World Bank.   18    the damage from climate hazards?’ but Define sector policy goals and targets. As rather ‘How can we reach our development Ranger and coauthors (2010, 27) write, targets while accounting for current and “Objectives are not necessarily adaptation future risks?’” (Economics of Climate specific and in fact using broader objectives Adaptation Working Group 2009, 27). can be useful in helping to mainstream A Risk Management Approach to Climate Adaptation in China 15 Introduction adaptation into organizational decision- for forestry during the 12th FYP are to (1) making.” The essential starting point for increase natural carbon stores by scaling up setting objectives is to identify how climate tree-planting efforts; and (2) stem the loss risk management and adaptation objectives of biodiversity by strengthening China’s support existing development priorities. network of natural protected areas. Yet The integration of risk management and increasing carbon stores does not necessarily adaptation objectives into sector policy goals lead to more biodiversity. Tree-planting is a consensus-building process and can efforts so far have largely relied on exotic elevate the profile of risk management and species and monocultures. Plantation forests adaptation on the political agenda. exhibit lower levels of biodiversity and are more susceptible to pests and disease. As a The extent to which climate risk management result, only one-quarter of the trees planted objectives have already been mainstreamed as part of afforestation and reforestation into organizational decision making is evident efforts between 1952 and 2005 have survived in the 12th FYP, for 2011–2015. The 12th FYP (Cao 2008; Cao et al. 2011). mandates that China reduce the CO 2 per unit of GDP by 17 percent in 2015 compared Set boundaries. Clearly defining the to 2011 and calls for the development of a boundaries of the policy decision up front national adaptation strategy. The plan sets can make the adaptation problem more broad-based goals for improving DRM in a tractable. Different elements of boundaries number of sectors, including urban planning include the following: and flood prevention. Additional goals for DRM during the period of the 12th FYP are • Time frame. The time frame depends specified in the National Comprehensive on the planning horizon for sector Disaster Reduction Plan (2011–2015) (State goals, the functional lifespan for Council 2011). The plan sets a goal of reducing investments, and decision lead-in losses from natural disasters each year to times. As illustrated in table 2 above, less than 1.5 percent of GDP (annual losses long-lived investments may increase from weather disasters alone averaged 2 to 3 the sensitivity of the decision to deep percent of GDP during the previous FYP). uncertainties about the future. • Geographic extent. Mapping where The sector FYPs offer a crucial point of entry the people, assets, businesses, and for mainstreaming adaptation objectives into other entities that make up the sector sector-level policies. They also illustrate the are located can help define who and importance of balancing potential trade-offs. what will be affected by the policy For example, the 12th FYP for forestry states decision. Often, the spatial boundaries that taking action on climate change is one of of the sector do not conform to political the guiding principles for the development or jurisdictional boundaries. As of the sector (SFA 2011b).18 Two main goals with many environmental problems, 18 Priorities for both mitigation and adaptation are further defined in the “Key Action Points for Forestry in Addressing Climate Change” during the 12th FYP (SFA 2011a). 16 A Risk Management Approach to Climate Adaptation in China Introduction actions by governments in one area always an easy task and will require may generate externalities that identifying where overlapping or extend far beyond local borders (for unclear responsibilities exist. example, downriver flood protection). There is thus a need for cross-border Identify stakeholders. Defining the boundaries cooperation in the risk management of the policy decision will help reveal who the process, for example, involving key stakeholders are. Relevant stakeholders watershed or basin-scale authorities include those outside the government. In such as the Yellow River Conservancy China, for example, research centers and Commission in sector plans for water environmental groups have played an resources. increasingly important role as advocates and information providers in the realm of climate • Institutional authority. Institutional policy making.19 Consulting with research mapping can be useful for identifying centers, environmental nongovernmental key public agencies and other entities organizations (NGOs), financial institutions, and their responsibilities. It will also and private enterprises at this early stage in the shed light on where cross-sector decision-making process is especially important coordination is needed. The question for setting goals. However, the process of for the sector planner is, “Who else has consultation with stakeholders in adaptation decision-making powers that could must be carefully structured to ensure that it is affect the outcome of this policy or meaningful (box 3). investment and should be involved?” Answering this question is not Box 3: Examples of Guidelines and Tools for Stakeholder Engagement in Adaptation Planning The following resources are available to help those undertaking adaptation planning structure consultations with stakeholders: • Slocum, Nikki. 2003. Participatory Method Toolkit: A Practitioner’s Manual. United Nations University, Comparative Regional Integration Studies, Belgium. http://unu.edu/hq/library/Collection/PDF_files/CRIS/PMT.pdf. • CoastalAdaptation.eu. “Stakeholder Engagement.” Innovative Management for Europe’s Changing Coastal Resources (IMCORE) Project. http://www.coastaladaptation.eu/index.php/en/plan-to-adapt/stakeholder-engagement. • Gardner, John et al. 2009. “A Framework for Stakeholder Engagement on Climate Adaptation.” Working Paper No. 3, Climate Adaptation National Research Flagship, CSIRO, Australia. http://www.csiro.au/files/files/pph1.pdf. • Holstein, Age Neils. 2010. “Participation in Climate Change Adaptation.” GRaBS Expert Paper 2, EU Regional Development Fund and INTERREG IVC Programme. http://www.grabs-eu.org/downloads/Expert_Paper_Climate_Participation_FULL_ VERSION(mk3).pdf. • Bizikova, Livia, Samantha Boardley, and Simon Mead. 2010. “Participatory Scenario Development Approaches for Identifying Pro-Poor Adaptation Options.” World Bank, Washington, DC. http://climatechange.worldbank.org/sites/default/files/ documents/PSD-Pro-Poor-Adaptation_EACC-Social%20.pdf. • CARE. 2012. “Participatory Monitoring, Evaluation, Reflection, and Learning for Community-Based Adaptation: PMERL Manual, A Manual for Local Practitioners.” CARE and IIED. http://www.careclimatechange.org/files/adaptation/CARE_ PMERL_Manual_2012.pdf. 19 For a discussion of the role of think tanks and environmental nongovernmental organizations in shaping China’s climate change policy, see Stensdal (2012), Heggelund (2007), Yu (2004), and Glaser and Saunders (2002). A Risk Management Approach to Climate Adaptation in China 17 Introduction Step 2: Assess Risks to guiding decisions. Failure to take full As emphasized in the climate risk account of climate risks due to poor uptake management framework developed for the or lack of appropriate information can lead United Kingdom by the UK Climate Impacts to poor decisions and a waste of resources Programme with Defra and the Environment (Ranger, Muir-Wood, and Priya 2009, Ranger Agency, an assessment of climate risks et al. 2010). Information needs will largely be should follow a tiered approach that begins determined by how the scope and nature of with an initial, “light-touch” screening of the decision are defined in the previous step. climate risks (Willows and Connell 2003; Varying information needs for different kinds Ranger et al. 2010). The sensitivities of the of climate risk management decisions are sector to weather and climate are identified illustrated in table 3. and scenarios of future change are explored to provide a sense of how the policy decision Screen for risks. The initial screening starts may be affected by climate risks before by looking at the sector’s current level of launching into a detailed, quantified analysis exposure and vulnerability to severe weather of options to deal with those risks. events and climate variability. This step accomplishes two things. First, it gives a There is a tendency for climate risk sense of how the sector is already affected information to be underutilized by decision by weather- and climate-related hazards. makers (see Weaver et al. 2013). This may Second, it sheds light on how the sector may be because the information is at the wrong be affected in the future by illuminating the scale, is poorly understood, or is not seen as sensitivities of the sector to weather and credible. Engaging with climate scientists and climate. Box 4 offers an example of an initial other technical experts to identify appropriate, screening for sensitivity to climate risks “fit-for-purpose” risk information for the that was performed by the World Bank for assessment of climate risks is thus essential Vietnam’s energy sector. Table 3: Comparison of Risk Information Needs for Different Management Decisions Risk assessment Single-location Emergency Land use planning Natural resource Engineered information needs infrastructure response planning management risk reduction design strategies (e.g., strategies (e.g., water supply) building codes and flood defenses) Accuracy Medium Low Medium Medium Medium Consideration of Medium High High Medium High multiple hazards Spatial resolution High Low Low Low Medium to higha Need for Medium Low Low to medium Medium to higha Higha probabilistic information Presentation Site-specific hazard Hazard map Hazard map Hazard and risk map Risk map and data modeling Source: Based on Ranger, Muir-Wood, and Priya (2009), with modifications. a. In these categories, there will be higher information needs where cost-benefit analysis is performed. 18 A Risk Management Approach to Climate Adaptation in China Introduction One way of identifying sensitivities is to up to the task. As existing canals, moats, reflect on how the sector was affected by waterways, and green spaces have been severe weather events and other climate- filled in, this has increased runoff into the related hazards in the past. For example, outdated piping system. The construction in developing a climate-resilient strategy of drainage infrastructure has also failed to for improving urban drainage in Beijing, keep pace with development in newer areas one could consider the flood of July 2012. of the city. This suggests that the sector is Ten hours of heavy rain—the worst in six already highly sensitive to heavy storm decades—inundated much of the city and events; this sensitivity may increase as the killed a reported 79 people. The city’s storm built-up area of the city expands and if older drain system, which was engineered in the infrastructure is not repaired or replaced early 1950s and consists of underground ( Economist 2012; Southern Weekend 2012; pipes designed to handle one-in-two- or one- People’s Daily 2012). in-three-year storm events, was simply not   Box 4: Screening Vietnam’s Energy Sector for Climate Risks The World Bank’s Energy Sector Management Assistance Program (ESMAP) has developed a tool for performing an initial screening of climate risks to a country’s energy supply system. The tool evaluates the imperative of adapting the energy sector to climate change according to (1) physical exposure and sensitivity of the sector to climate-related hazards; and (2) the capacity of the sector to adapt. Countries are scored in both dimensions to determine the level of adaptation imperative using a matrix similar to that illustrated in figure B2.1. The ESMP tool has been or is being applied to Vietnam, Zambia, Nepal, and Mozambique. A rapid assessment of Vietnam’s energy sector using the tool demonstrates that adapting the sector to climate change is highly imperative for Vietnam. The country’s energy sector already faces a high level of exposure to tropical cyclones and floods, and its energy supply system is highly sensitive to changes in weather and climate conditions. Some of the indicators used to assess the sensitivity of Vietnam’s energy sector to climate change are illustrated in table B4.1. The sector also possesses a relatively high level of economic, technical, institutional, and informational capacity to adapt. Thus, the screening indicates that adapting the energy sector in Vietnam is both necessary and feasible. An initial screening of a country’s energy supply system using the ESMAP rapid assessment typically requires up to six person- weeks, while a more detailed, quantitative analysis of risks may require up to six months.20 Table B4.1: Indicators for the Sensitivity of Vietnam’s Energy Sector to Climate-related Changes Source: ESMAP 2012. 20 Personal communication with Wang Xiaoping, ESMAP, World Bank, March 27, 2013 A Risk Management Approach to Climate Adaptation in China 19 Introduction Nonclimate pressures should be considered in different areas. Risk maps are generated as part of the initial screening of sensitivities. using meteorological and hydrological data, These pressures may amplify the effects inventories of assets and structures, property of severe weather, climate variability, and values, and reported losses from historic future climate change. For example, in the events. Vulnerability curves are then fitted case of Beijing, the sensitivity of the urban using these data to estimate the probability drainage system to heavy rainfall events has that a certain level of damages will occur. been amplified by inadequate investment in maintenance and repair of existing storm Representing vulnerability in terms of drains and pipes, as well as paving over expected economic losses from severe of natural drainage areas due to rapid weather events has its limitations. This construction. approach is most appropriate for areas with high levels of urbanization, widespread As part of the initial risk screening, mapping insurance, accurate reporting of disaster can help decision makers visualize which losses, and effective institutional mechanisms areas of the sector are most exposed to for recovery and reconstruction. However, weather- and climate-related hazards it may underestimate losses from severe and what the relative levels of risk are. A weather and other climate-related hazards hazard map provides information about in poor and rural areas. Estimates of direct the geographic footprint and magnitude of losses also do not consider the ripple effects hazardous events (for example, the extent of that severe weather events have on the a one-in-100-year floodplain in a city, or the economy (for example, flood waters may area of cropland affected by a particularly cause sewage spills and contaminate local bad drought). An excellent example of hazard water supplies, leading to illness and lost mapping being used to improve public wages(see Ranger et al 2011)). awareness of climate- and weather-related hazards is provided by the Water Resources Previous research has shown that poor Bureau of Guangxi Province, which has people tend to suffer more from the effects published online flood hazard maps for each of climate change and natural disasters of the province’s municipalities.21 A second because (1) they are more likely to live type of map, a risk map, combines a hazard in hazard-prone areas; (2) they are often map with information about exposure subject to multiple, overlapping risks, and and vulnerability. 22 Insurance companies even small, every-day disturbances may use risk maps to estimate expected annual overwhelm their ability to cope and produce property losses from severe weather events disproportionately large impacts on welfare; 21 The Guangxi Water Resources Bureau site also provides real-time storm information, flood warnings, and notice of water releases from reservoirs, as well as historical data and hazard ratings for landslides and flash floods in different municipalities. See http:// www.gxwater.gov.cn/. 22 In 2011, a group of researchers headed by Shi Peijun, deputy director of the National Disaster Reduction Commission, published China’s first national atlas of risk maps for natural disasters. Risk maps for typhoons, floods, landslides, snow, hailstorms, and other hazards were created from “hundreds of years of records on natural disasters and related losses” (People’s Daily 2011; MWR 2011). 20 A Risk Management Approach to Climate Adaptation in China Introduction (3) risk-minimizing livelihood strategies One commonly used method for assessing adopted by poor people in response to vulnerability is to create an index that frequent hazards result in lower average captures indirect measures of the social incomes; and (4) poor people lack access to dimensions of vulnerability (see Moss, services, networks, and resources that are Brenket, and Malone 2001; Downing and designed to assist in recovery from shocks Patwardhan 2001; Adger et al. 2004; Hahn, (Mearns and Norton 2009; World Bank and Riederer, and Foster 2009). The advantage UN 2010; World Bank 2011; Adger et al. 2007; of these indexes is that they allow for easy Cannon, Twigg, and Rowell 2003; Adger and comparisons between different regions Kelly 1999). and across different time periods. It is also possible to use indicators to create Especially in poor and data-scarce vulnerability maps to see how vulnerability environments, it may be more appropriate is distributed spatially (WRI et al. 2011). The to screen for vulnerabilities through disadvantage is that vulnerability, especially bottom-up methods that focus on the social, social vulnerability, is highly context cultural, economic, and environmental dependent, and indicators such as GDP per factors leading to differential exposure to capita may not accurately reflect the unique hazards, impacts, and capacities to cope factors that contribute to the vulnerability of and adapt to future threats. These methods different social groups in one region versus aim to show not only who and where another. Moreover, vulnerability indexes the vulnerable are, but also why they are only capture snapshots of vulnerability at a vulnerable and what their capacity to given time and place; they do not describe adapt is (Downing and Patwardhan 2004). processes that contribute to vulnerability and An example of a bottom-up vulnerability how these are changed over time. assessment for Surat, India, is provided in box 5. The wealth of tools and resources available to assist in bottom-up assessments of vulnerability is shown in box 6. Box 5: Assessing Vulnerability to Flood Risks in Surat, India Surat is a large coastal city about 250 kilometers north of Mumbai at the mouth of the Tapti River. About 20 percent of the city’s population lives in slums, many of which are crowded along tidal creeks and river banks and experience frequent flooding. A citywide assessment of the vulnerability of slum dwellers and migrants to flooding and other risks revealed the following: • Low levels of schooling act as a barrier to awareness raising. • About one-third of slum dwellers have highly unstable sources of income, which can be easily disrupted by floods or other shocks. • Slum dwellers usually lack insurance coverage and have little access to the services of NGOs, microfinance groups, or other social service providers; slum dwellers and migrants also tend to have weaker social support networks than others. The assessment showed policy makers that investing in social interventions aimed at reducing the vulnerability of the city’s slum dwellers will be essential to flood risk management in the city. Source: World Bank 2012a. A Risk Management Approach to Climate Adaptation in China 21 Introduction Box 6: Examples of Tools Used to Screen for Vulnerabilities to Climate Risks The following are a few examples of the many tools and resources available for conducting bottom-up assessments of vulnerability: • International Red Cross and Red Crescent Societies. “Vulnerability and Capacity Assessment Guidelines.” http://www.ifrc. org/Global/Publications/disasters/vca/Vca_en.pdf. • CARE. 2009. Climate Vulnerability and Capacity Analysis Hand Book. http://www.careclimatechange.org/cvca/CARE_ CVCAHandbook.pdf. • United Nations Development Programme. 2010. Mapping Climate Change Vulnerability and Impact Scenarios: A Guidebook for Sub-National Planners. http://europeandcis.undp.org/uploads/public1/files/Mapping%20CC%20Vulnerability%20 publication%20-%20November%202010.pdf. Conducting a vulnerability assessment can poor sector performance (Wilby et al. 2009; provide an entry point for local stakeholders Lempert, Scheffran, and Sprinz 2009). Yet to participate in the risk management greater complexity does not necessarily equal process. Members of the local community, more accurate or useful results. The key is including private households, businesses, to work with experts to identify projections NGOs, and government officials, are best that satisfy the needs of the decision maker, positioned to identify both the ways in and in this way ensure that the information which they are affected by climate variability will be effectively used. Box 7 offers a best- and the barriers that prevent them from practice example from the United Kingdom anticipating, withstanding, or recovering of decision-tailored climate projections. from the impacts of adverse weather (World Bank 2010a). Factors to consider in judging the utility of climate projections include the following Explore future scenarios of change. The (Stainforth et al. 2007a, 2007b; Ranger et al. previous step in the screening focused 2010): on present-day risks to understand how the sector is already affected by weather, • R e l e v a n c e . D o t h e p r o j e c t i o n s climate, and other pressures. The step under represent the factors and processes discussion here focuses on creating a wide that are most likely to affect the range of plausible scenarios to explore how performance of the policy? Is the these risks may change in the future. causal connection between weather and climate and the performance of the At the most basic level, scenario analysis can policy well understood? involve qualitative story lines or projections • Scale. Are the projections at the right to describe a range of “risky” futures. At spatial and temporal scale, and can the most advanced level, it makes use of they provide reliable information at complex statistical modeling to test hundreds that scale? Methods used to downscale or thousands of different climate scenarios GCMs to finer spatial resolutions and isolate key vulnerabilities that lead to can introduce additional uncertainty 22 A Risk Management Approach to Climate Adaptation in China Introduction and bias. Over shorter time frames, • M u l t i p l e p r e s s u r e s . A s i d e f r o m the climate change “signal” in the weather- and climate-related variables, projections may be washed out by do the projections take account of natural variability and randomness (see other pressures that could influence figure 1). Developing projections at the the decision (for example, rates of right scale requires striking a balancing population growth or water demand between the information needs of the by industry)? decision maker and the scientific limits of the models, especially if the policy In exploring future scenarios of change, or investment is place specific and decision makers may consider the possibility highly sensitive to local weather and of crossing key impact thresholds. Thresholds hydrology. may be defined by stakeholders in terms of acceptable or unacceptable levels of impact.23 • Range. Do the projections capture This was done for the Great Lakes region on a wide enough range of plausible the border of the United States and Canada. scenarios to inform the decision about Technical working groups were convened potential risks? And are the results of by an international commission to evaluate the projections likely to change over the impacts that changes in water levels time as knowledge about weather- and would have on ecosystems, recreational climate-related processes improves? Box 7: Creating User-Oriented Climate Change Projections: The UK Climate Projections 2009 In 2009, the fifth generation of climate change projections for the United Kingdom (UKCP09)24 was released by a consortium of nine organizations, including the UK Met Office, UK Environment Agency, UK Climate Impacts Programme, and a number of research institutes and laboratories. For each region of the United Kingdom, UKCP09 provides information on observed climate trends and makes projections about future change in the climate and marine and coastal environment. The UKCP09 projections were designed with adaptation planning in mind and aim to provide decision makers and organizations in the United Kingdom with a state-of-the-science understanding of weather and climate impacts that could affect their activities. The launch of UKCP09 reflected the culmination of several years of consultation and engagement with stakeholders to identify and respond to their needs. One of the main challenges in the consultation process was balancing the expectations of users. According to UK Climate Impacts Programme staff members who were involved in the process, “There will always be a tension between the users’ desire and the limits of robust science. Balancing the two often ends in conflicting demands that need to be finely managed . . . These kinds of trade-offs need to be made clear to the users from the outset . . . When users’ requirements cannot be met, a full explanation should be given so users do not become disillusioned with the process” (Steynor, Gawith, and Street 2012, 14). Source: Steynor, Gawith, and Street 2012 23 Many kinds of thresholds exist, from the biophysical to the social (Jones 2001). Note that the concept of user-defined thresholds here differs from that of natural tipping points. The role of user-defined thresholds is to encourage decision makers to think about what level of impact is tolerable—not to predict when and where they think tipping points will be crossed and trigger sudden, dramatic changes. 24 See the UK Climate Projections website at http://ukclimateprojections.defra.gov.uk/. A Risk Management Approach to Climate Adaptation in China 23 Introduction boating, commercial navigation, water To represent a fuller range of uncertainty, supply, and other areas. The working groups scenarios may be created to explore potential determined a range of water levels that were surprises and abrupt changes. This approach acceptable or unacceptable for the different was taken for scenarios of sea-level rise areas (Moody and Brown 2012). A similar created for the climate change impact review threshold-setting exercise was performed by the New York City Panel on Climate for an investment program by the World Change in 2010. The scenarios considered Bank in Nigeria. Stakeholder countries in the the effects of the thermal expansion of ocean Niger River basin gathered at a workshop waters under a range of higher temperatures to decide what would be a tolerable level of and local land subsidence in the city; the decline in the performance of the proposed gradual melting of glaciers, ice caps, and ice investment due to change in climate sheets; and the circulation of ocean currents conditions. The stakeholders decided that a for a range of future emission pathways and 20 percent loss from baseline performance temperatures. Recognizing the limitations of was unacceptable. Modeling was then done the current generation of climate models in using a full range of GCM projections to accounting for tipping points, researchers also examine whether such a large decline was created a scenario of rapid sea-level rise in likely given the current state of the climate which the Greenland and Antarctic ice sheets science (Brown 2011). melted much faster than expected (Horton, Gornitz, and Bowman 2010; Solecki, Patrick, Because the varying results of climate models and Brady 2010). Based on these projections, represent a “lower bound” of the full range of the panel recommended that New York City uncertainty, assigning objective probabilities revise its flood protection standards and to impacts based on an ensemble of model zoning to account for higher seas. results may be misleading (Stainforth et al. 2007a, 2007b; see also Weaver et al. 2013). It may also lead to overconfidence, and basing investment decisions on ambiguous or unclear probabilities creates the danger of maladaptation (Hall 2007). Instead, scientists and other experts may use their best judgment to assign subjective probabilities to risks based on the current state of evidence, as was done for the UK Climate Projections 2009 (UKCP09). This in turn requires careful communication of what the uncertainties are, how they are represented, and how they affect the results of the projections.25 25 See Mastrandrea et al. (2010) for guidance on the communication of uncertainty. 24 A Risk Management Approach to Climate Adaptation in China Introduction Box 8: Knowledge-sharing Databases for Identifying Climate Change Adaptation Policies and Practices • European Climate Adaptation Platform: http://climate-adapt.eea.europa.eu/web/guest/adaptation-measures. • UNFCCC, Adaptation Practices Interface: http://unfccc.int/adaptation/nairobi_work_programme/knowledge_resources_and_publications/items/4555.php. • UNFCCC Database on Ecosystem-based Approaches to Adaptation: http://unfccc.int/adaptation/nairobi_work_programme/knowledge_resources_and_publications/items/6227.php. • UNFCCC Database on Local Coping Strategies: http://maindb.unfccc.int/public/adaptation/. • UNFCCC NAPA Priorities Database: http://unfccc.int/adaptation/workstreams/national_adaptation_programmes_of_action/items/4583.php. • UNFCCC Private Sector Initiative—Database of Actions on Adaptation: http://unfccc.int/adaptation/workstreams/nairobi_work_programme/items/6547.php. Step 3: Identify and Evaluate Options to defining successful adaptation as suggested Reduce Risk by previous studies include feasibility, Once risks to the sector from weather- and effectiveness, efficiency, timeliness, equity, climate-related hazards are identified, the sustainability, and appropriateness (Brooks next step is to identify and evaluate options et al. 2011; Fankhauser and Burton 2011). to reduce or transfer risk. The UNFCCC and others have compiled databases to share best As a rule of thumb, in planning for practices, case studies, and cost information adaptation under uncertainty, priority for climate change adaptation policies and should be given to low-regret strategies practices (box 8). Given these extensive that offer benefits regardless of how the resources, this section focuses on how climate changes. “Many of these low- decision-makers can choose among different regrets strategies produce co-benefits, help policy options despite facing conditions address other development goals, such as of deep uncertainty about the future improvements in livelihoods, human well- climate.26 Emphasis is placed on the need for being, and biodiversity conservation, and robustness and the importance of balancing help minimize the scope for maladaptation” robustness with other requirements (for (IPCC 2012, 13). Low-regret measures example, cost-effectiveness). are typically those that build adaptive capacity and enhance resilience, such as The evaluation of policy options should begin restoring degraded mangroves near densely with a conversation about priorities and populated coastal cities or improving access about the criteria that will be used to define to safe drinking water. Examples of low- successful adaptation and the management regret measures to manage risks to urban of risks. The overall policy objectives water utilities in China are highlighted in identified in framing the decision in step 1 table 4. As the table shows, there are many can help guide this conversation. Criteria for 26 The discussion in this section of robustness and decision making under uncertainty draws extensively from Hallegatte et al. (2012) and World Bank (2012b). A Risk Management Approach to Climate Adaptation in China 25 Introduction Table 4: Low-regret Climate Risk Management and Adaptation Options for Urban Water Utilities in China Area of activity Options Knowledge of climate change risks • Survey surface water and groundwater resources, with follow-up monitoring by provincial and local environmental protection and water resources bureaus • Prepare flood risk maps and make these available to the public • Conduct public information campaigns on flood risks and emergency management plans Institutional strengthening • Create single urban drainage authority for each municipality, merging responsibilities for wastewater treatment • Increase decision-making autonomy of utilities Design and performance standards • Establish a national utility benchmarking program • Strengthen national requirements for utility information disclosure Adequacy of water supplies • Develop national and provincial regulations to restrict groundwater abstraction • Conduct R&D for expanding desalinization capacity • Develop guidelines for rollout of storm-water recycling by utilities • Review regulatory framework and develop guidelines for decentralized rainwater harvesting Improvement of resource efficiency • Establish tighter water-efficiency standards in building codes • Establish a national target for energy generation from wastewater and sludge • Reduce leakage in water distribution systems • Raise tariffs to improve utilities’ operating cost recovery • Create incentives to encourage industrial water recycling Pollution control • Expand municipal wastewater collection and treatment capacity • Encourage use of non-engineering wastewater treatment methods • Reduce industrial discharges by tightening sector regulations on industrial emissions and improving monitoring and enforcement • Establish national quality parameters for drinking water resources • Involve farmers and other stakeholders in watershed management programs Drainage and flood control • Increase investment in extending, repairing, and maintaining draining networks • Encourage non-engineering approaches to flood management • Improve flood forecasting and early warning systems • In areas already experiencing seawater intrusion, increase investment in hydrological barriers Source: Adapted from Jensen 2013. 26 A Risk Management Approach to Climate Adaptation in China Introduction low-regret options available. Yet low- considered the costs and benefits of raising regret measures will not always substitute the city’s flood barriers to protect against for higher-stakes options that carry the storm surges from the strongest hurricanes. possibility of large sunk costs such as flood The costs of raising New Orleans’s flood protection infrastructure (Ranger and defenses to the highest standard (that is, to Garbett-Shiels 2012). protect against a Category 5 hurricane) was estimated at $32 billion, while the net present Decision makers have traditionally relied value (NPV) of benefits from improved on cost-benefit analysis (CBA) to weigh flood protection was estimated to be only potentially large costs and choose policies $1.5 billion to $6 billion. These figures and investments that maximize net economic would suggest, in Stefan Hallegatte’s (2006, benefits. CBA may account for uncertainty 4) words, “that it is more rational from an by testing how optimal, benefit-maximizing economic point-of-view to live the Katrina solutions perform if the assumptions and nightmare again in a more or less remote parameters of the cost-benefit function are future” than to spend more money now to varied (Arrow et al. 1996, cited in Hallegatte rebuild to higher standards. Yet as Hallegatte et al. 2012). An example of CBA being used showed, varying the assumptions of the in the realm of climate risk management CBA could effectively increase the benefits of comes from New Orleans. In rebuilding higher flood walls to $35 billion and reverse after Hurricane Katrina, the U.S. Congress the apparently rational decision (see figure 5).   Figure 5: The Decision Maker’s Dilemma—Considering the Costs of Building Higher Figure 5  The Decision Maker’s Dilemma—Considering the Costs of Building Higher Flood Walls  Flood Walls in New Orleans after Hurricane Katrina in New Orleans after Hurricane Katrina  $32 billion  Decision: Should dikes in New Orleans be built higher? Costs  Costs of raising dikes to protect against flooding from the strongest  Cost of raising flood  walls to protect  hurricanes are $32 billion. Benefits are $1.5 billion to $35.3 billion,  against Category 5  hurricanes  depending on assumptions. $1.5 billion  $5.7 billion  $10.7 billion $9.5 billion $28.4 billion  $35.3 billion Direct benefits  Climate change Larger costs Resettlement Discount rate  Uneven effects Initial estimate of NPV  By the end of the 21st  Larger indirect social  There is a  Dealing with long time  People in the city  of direct benefits from  century, the strongest  and economic impacts  countervailing risk of  horizons and the  affected by flooding  avoided property  hurricanes are  are incurred as a  people moving to  welfare of future  tend to be poorer and  damage and loss of  projected to be 3–4  result of the storm  more flood‐prone  generations, a social  more risk averse.   life is $1.5 billion,  times more likely,  crippling the local  areas due to the  discount rate of 3  Accounting for their  applying 7 percent  raising the benefits of  economy and  increased feeling of  percent is used,  loss of utility (vs.  discount rate for  avoided damages  necessitating  safety with higher  instead of the 7  society‐wide utility)  private capital.  thanks to higher flood  rebuilding.  flood barriers. This  percent rate for  raises the NPV of  protection walls.  risky behavior could  private capital, raising  avoided damages.    lower avoided losses.  the value of future  benefits.  Source: Source: Analysis Hallegatte 2006.    Analysis by 2006. by Hallegatte   As the example from New Orleans attests, policy decisions that are sensitive to deep uncertainties  are not easily amenable to traditional CBA. CBA supposes that (1) risks are known and can be described  with a single joint probability distribution function; and (2) there is agreement among decision makers  as to objectives and key assumptions (see Ranger et al. 2010; Hallegatte et al. 2012). The balance of  costs and benefits in the New Orleans example is influenced to a great extent by the range of climate  change projections. The example assumes for the sake of illustration that Category 5 hurricanes will  occur three to four times more frequently by the end of the century than they do today. Yet even if the  most powerful hurricanes occur only two times more frequently—as opposed to three or four—the  difference in the NPV of avoided damages is enough to sway  theManagement A Risk Approach  decision against to Climate  raising flood   Adaptation in China 27 protection standards. The decision also hangs on a number of thorny ethical questions, such as how  much a human life is worth (in monetizing avoided damages) or how the welfare of future generations  Introduction As the example from New Orleans attests, As a method for evaluating policy options, policy decisions that are sensitive to deep robust decision making (RDM) starts with uncertainties are not easily amenable to identifying a candidate set of policies or traditional CBA. CBA supposes that (1) investment options. The decision maker or risks are known and can be described with a analyst tests the vulnerabilities of each option single joint probability distribution function; by looking at how the options perform under and (2) there is agreement among decision a wide variety of uncertain conditions. This makers as to objectives and key assumptions may involve the exploratory use of climate (see Ranger et al. 2010; Hallegatte et al. model projections or statistical techniques 2012). The balance of costs and benefits in to create hundreds or thousands of different the New Orleans example is influenced future scenarios. New or modified strategies to a great extent by the range of climate are proposed to address vulnerabilities, and change projections. The example assumes then the scenarios are run again to evaluate for the sake of illustration that Category 5 if performance improves, with a focus on hurricanes will occur three to four times those scenarios for which the original option more frequently by the end of the century performed the worst. Looking at many than they do today. Yet even if the most different scenarios enables the decision powerful hurricanes occur only two times maker or analyst to isolate what the greatest more frequently—as opposed to three or uncertainties are and weigh the trade-offs four—the difference in the NPV of avoided for reducing these uncertainties by pursuing damages is enough to sway the decision other options (for example, in terms of against raising flood protection standards. higher costs). The process may be repeated The decision also hangs on a number of until a viable strategy or set of measures is thorny ethical questions, such as how much identified (Lempert et al. 2003; Groves et al. a human life is worth (in monetizing avoided 2008; Lempert and Groves 2010; Lempert damages) or how the welfare of future and Kalra 2011). RDM has been applied generations should be weighted (in setting by water agencies in the American West a discount rate), which can easily swing the to evaluate the climate robustness of their outcome one way or the other. long-term water supply plans (Lempert and Groves 2010; see box 9) and is currently Robust options are those that “perform being employed in Ho Chi Minh City to reasonably well compared to the alternatives improve the city’s flood management across a wide range of plausible scenarios strategy (Hallegatte et al. 2012). evaluated using the many value systems held by different parties” (Lempert, Popper, and One way of measuring robustness is to Bankes, 2003, xiv). Aiming for robustness is compare varying levels of regret associated appropriate in situations similar to that of with pursuing different strategies. The regret New Orleans. In that example, policy makers associated with pursuing a strategy is defined were faced with making a choice on a very following Savage (1950) as the difference long-lived investment with the possibility between the performance of that strategy of large sunk costs and lock-in effects, (given some function of strategic, economic, highly uncertain scientific assumptions, and or social value) and the performance of the differing views on questions of basic values. “best” strategy under a given scenario (cited 28 A Risk Management Approach to Climate Adaptation in China Introduction Box 9: Robust Decision Making by Water Utilities Planning for Climate Change Water utilities tasked with developing long-term water supply plans are familiar with the challenges of decision making under uncertainty. In the past, utilities have typically accounted for uncertainty by considering year-to-year variability in rainfall and stream flows and projecting what future water needs will be by considering present-day trends. Climate change is challenging this practice of water resources planning, as knowledge of past conditions is becoming less and less useful as a guide for what the future climate will be like. Confronting this dilemma, in 2007 the Inland Empire Utilities Agency (IEUA) in Southern California invited the RAND Corporation to evaluate the vulnerability of the agency’s water resources plan to climate change. Researchers worked with IEUA planners to identify key uncertain factors that could affect the ability of the agency to meet its water supply obligations under the current plan. Using the outputs from a GCM, researchers created a large ensemble of projections for temperature and precipitation to reflect the potential for warmer and drier weather as well as cooler and wetter weather (within the bounds of what IEUA staff believed was plausible). Because the population of the IEUA region is expected to grow 50 percent by 2025 as the region’s farms are replaced with suburbs, researchers also considered the uncertainties involved with how much water new housing developments would need and how altering the local landscape with new construction could affect the natural replenishment of groundwater. Using statistical techniques, 450 different scenarios were created to represent different combinations of the uncertain factors identified. The scenarios revealed that among the uncertain factors, changes in the regional climate presented a significant risk to the agency. Water supply costs exceeded what the IEUA could reasonably afford in 60 percent of the future scenarios involving warmer and drier weather. To explore how the vulnerability of the current water resources plan could be reduced, researchers and agency staff introduced eight alternative management strategies to increase local supplies and reduce dependence on costly imports of water from other basins. Strategies included capturing storm water to recharge groundwater supplies, recycling grey water from households, and investing in efficiency programs. The analysis found that the IEUA could reap the greatest benefits from these strategies by practicing flexibility and allowing the agency’s supply plan to be adjusted over time in response to changing conditions down the road. By practicing adaptive management, high supply costs could be avoided in over 80 percent of the scenarios considered. The results of the analysis increased the confidence of IEUA planners that the agency’s water resources plan could be effectively adapted to account for climate change. Source: Lempert and Groves 2010. in Lempert, Popper, and Bankes 2003). What design standards for water supply and sewer it means to minimize regret depends on the infrastructure in China would be a good appetite of the decision maker for risk. A economic decision even in today’s climate— highly risk-averse decision maker might opt that is, without additional climate change. A for the strategy with the minimum amount risk-neutral leader, however, would delay of maximum regret across the entire gamut raising standards until after the 2030s. of scenarios being considered (that is, the least-worst worst-case scenario). Risk- Robustness often goes hand in hand with neutral decision makers, on the other hand, flexibility. Flexibility is achieved by putting might choose the strategy that comes with a mechanism in place for plans to be updated the lowest average level of regret across the or modified as knowledge of the changing range of scenarios. Tolerance for risk can climate improves (see WRI et al. 2011). be powerful in shaping decisions. Hughes The Thames Estuary 2100 project is a good (2011), for example, has shown that from the example of a flexible, climate-robust plan for standpoint of a cautious leader, raising the infrastructure investment (box 10). A Risk Management Approach to Climate Adaptation in China 29 Introduction Box 10: Thames Estuary 2100 Project The Thames Estuary 2100 project provides a real-world example of building resilience into long-lived, high-cost infrastructure assets in order to cope with future climate conditions and avoid inflexible design decisions at an early stage. The Thames barrier protects Central London against at least a one-in-1,000-year return period storm surge. Opened in 1980, it was constructed to provide protection until 2030. Given that climate change is expected to increase the frequency and intensity of storm surges, the question arose whether the system needed to be modified in the interim and whether to design a forward plan to 2100. A route-map decision analysis method was used to devise an adaptation plan that would build robustness even when dealing with long-lived decisions with high sunk costs (up to £9 billion) and deep uncertainty over future climate risks (extreme water levels in the estuary). The protection measures were designed to be built in a series of sequential steps, where each step represents a package of adaptation measures that provide protection against the current “most probable” estimates of storm surges (so there is no “overconstruction” at any stage). Series of packages are designed to span the plausible range of increases in water levels in the Thames by 2100 (the high end of the range is estimated at 4.2 m). Initial packages are typically “no-regret” measures that allow for the option of implementing other, possibly more irreversible measures (such as building a new barrage as opposed to upgrading the existing one) in the future as the risk is better understood. Construction on each package is to be triggered when observed extreme water levels cross a predetermined threshold, allowing for lead time needed for implementation. Such flexibility, however, can come at higher costs, and therefore economic analysis (net present value of investments and environmental impact) will be applied at each decision mode to choose the most cost-effective measure. Source: Urvashi Narain, World Bank, summarizing Reeder and Ranger (2011) Real options analysis (ROA) allows decision and Pathirana (2013) assess the value of a makers to explicitly account for the value of flexible strategy for upgrading the urban added flexibility in climate adaptation plans. drainage network of a city in England. The A real option “is an alternative or choice that strategy allows for headroom allowances becomes available through an investment to be adjusted by building new storage opportunity or action” (HM Treasury and facilities, replacing sewers, and taking other Defra 2009, 11–12).27 Leaving options open measures depending on changing patterns in can create real economic value if plans can be the intensity of rainfall. The study finds that adjusted to better fit changing circumstances building in the possibility of adjusting the as knowledge of those circumstances network can reduce costs by 20 percent over improves. ROA has been used in China to the lifetime of the infrastructure. Evidence appraise investments in coal bed methane of the cost-effectiveness of flexibility can be (Fan, Mo, and Zhu 2013), carbon capture found elsewhere, too. Linquiti and Vonortas and storage (Zhu and Fan 2011), and wind (2012) evaluate the social benefits of raising farms (Yang et al. 2010). It has also been seawalls to protect two coastal cities, Dhaka, suggested as a way of valuing biodiversity Bangladesh, and Dar-es-Salaam, Tanzania. (Boyd 2010). To illustrate the use of ROA The authors find that raising the height of for climate adaptation, Gersonius, Ashley, the seawalls incrementally to respond to 27 In the guidance note on accounting for climate change by the treasury office and environmental agency of the United Kingdom, the use of ROA is recommended for evaluating “policies, programmes or projects which have three core features: uncertainty, flexibility, and learning potential” (HM Treasury and Defra 2009, 11–12). 30 A Risk Management Approach to Climate Adaptation in China Introduction observed rates of global sea-level rise yields Ultimately, prioritizing robustness is a greater NPV benefits than designing the “normative” choice. The choice to plan for walls to protect against a one-in-100-year worst-case scenarios implies within it the storm surge event at the beginning of the values of the decision maker—about how century and not making any adjustments. 28 much risk is tolerable, what objectives are most important, and what trade-offs are Apart from robustness, decision makers are worth making (Lempert, Popper, and Bankes also likely concerned with cost-effectiveness. 2003). In some cases, the trade-offs associated Cost-effective adaptation measures are with pursuing more robust options may be defined as those that reduce climate risks judged as too expensive. Far from dictating to a tolerable level while maximizing the that people should always choose the course resources available to decision makers to of action that offers the highest degree of pursue other goals. Cost-effectiveness may robustness or flexibility, the point of RDM serve as a secondary metric for choosing is rather to help people make risk-informed among options that satisfy a predetermined decisions that duly acknowledge the level of robustness. For example, a decision existence of deep uncertainties. maker might pose a question like this: among those strategies that perform reasonably well Step 4: Identify Challenges to in at least 80 percent of the scenarios being Implementation and Plan to Monitor considered, which is least costly, taking and Evaluate into consideration capital costs and the Barriers. The “best” adaptation options net present value of future operations and chosen from the previous step (that is, those maintenance costs? that are robust and reasonably cost-effective) need to be screened for institutional The most robust and flexible options may feasibility to determine the barriers to not be the most cost-effective, and there are implementing them (see Brooks and Adger trade-offs to consider. Often, the most robust 2004). While climate risk assessments and option is not the one that yields the highest option analysis are important, leaders returns in any single scenario, but rather may be unwilling or unable to act if risk the one that is “less brittle to surprise” and management is not a priority, or if the minimizes regret if predictions about the institutional infrastructure needed to future end up being wrong (Lempert and implement adaptation measures is not in Kalra 2011, 4; see also Lempert and Colllins place (Ranger and Garbett-Shiels 2012). The 2007). For this reason, a common critique concept of risk management as an approach of RDM is that it is overly pessimistic and to coping with deep uncertainties in making too geared toward the worst-case scenario climate adaptation policies is still relatively (World Bank 2012b). new in China. And China is not alone. A 28 The only exception is in the scenario for Dar-es-Salaam where a 7 percent discount rate is applied to measure the NPV of future benefits instead of a lower social discount rate. In this scenario, doing nothing (that is, not building seawalls) is apparently the most economically rational strategy. The reason for this result likely has to do with the high up-front costs of building the walls, the low levels of development in the city (hence, low values of assets to be protected), and the significant discounting of future welfare benefits from pursuing an adaptive coastal flood protection strategy. If a 3 percent discount rate is used, then the adaptive strategy is the most economical (Linquiti and Vonortas 2012). A Risk Management Approach to Climate Adaptation in China 31 Introduction global review by the IPCC found “limited number of future scenarios in the RDM evidence” that countries are “explicitly analysis where water supply costs exceed integrating knowledge of and uncertainties in a threshold value (a higher “vulnerability” projected changes in exposure, vulnerability score means a lower level of robustness). and climate extremes” in their DRM systems and policies (Lal et al. 2012, 342). Monitoring and evaluation. Monitoring and evaluation (M&E) aims to promote learning In China, two of the main institutional and ensure accountability. The uncertainty barriers to risk-based climate adaptation are of climate change underscores the need weak cross-sector policy coordination and for ongoing learning as part of climate lack of incentives for implementation. These change adaptation. Learning is facilitated barriers to implementation are not unique to by regularly reviewing progress and climate adaptation. Rather, they affect a wide reassessing policies and plans as knowledge range of environmental and social policies of the climate improves and unforeseen (see Ran 2013; Mei 2009; Lieberthal 1997). The events unfold (see UKCIP 2011; Spearman incentives of officials are often aligned toward and McGray 2011). Practically speaking, policies and projects that deliver immediate, reviewing progress and demonstrating visible benefits and political value. 29 By results are also fundamental to building contrast, the benefits of risk management, confidence in the benefits of adaptation and climate adaptation, and resilient development attracting additional financing (Sanahuja tend to be longer term and more difficult 2011). The Climate Policy Initiative estimated to measure directly because they reflect a that public and private financing for climate process and not a single outcome. adaptation worldwide totaled $14 billion in 2012 (Buchner et al. 2012). One practical way of weighing the robustness or cost-effectiveness of a measure Figure 6: Mapping Barriers: Institutional Level with institutional feasibility is to map its of Effort Compared to Robustness of Policy Figure 6  Mapping Barriers: Options  Institutional  Level of Effort Compared to Robustness of Policy Opt benefits against the “level of effort” involved 140 Low level of  in implementing it, as Lempert and Groves effort, high  120 vulnerability Level of vulnerability (2010) do in comparing adaptation options 100 for the IEUA’s water resources plan (see 80 Policy  60 box 9 above; figure 6 below). Under this options High level of  40 approach, challenges for implementing 20 effort, low  vulnerability each policy option are listed; then each 0 0 5 10 15 20 25 policy option is assigned a score to reflect Expected level of effort in implementing the expected difficulty in implementing   Source: Based Source: Based on Lempert  on Lempert and  and Groves Groves  2010.  2010. it. The implementation difficulty score Note: The x‐axis represents an index score of difficulty assigned by decision makers and analysts; the y‐axis represents Note: The x-axis represents an index score of difficulty assigned number of future scenarios in the RDM analysis where water supply costs exceed a threshold value for acceptability.   is then compared to a measure of policy by decision makers and analysts; the y-axis represents the   of future scenarios in the RDM analysis where water number performance, which in figure 6 reflects the supply costs exceed Monitoring a threshold  and evaluation. acceptability. value for and  Monitoring  evaluation (M&E) aims to promote learning and accountability. The uncertainty of climate change underscores the need for ongoing learning as p climate change adaptation. Learning is facilitated by regularly reviewing progress and reassessin policies and plans as knowledge of the climate improves and unforeseen events unfold (see UKC 29 Spearman and McGray 2011). Practically speaking, reviewing progress and demonstrating result This is due in large part to (1) the rotation of cadres to different posts and also locales every  fundamental few years;  to building and (2)  confidence the  in  theweighting  benefits ofof criteria  and attracting additional f  adaptation for GDP growth on official performance appraisals that are tied to career  2011). The(Ran advancement (Sanahuja 2013;  Climate Mei  Policy 2009).  estimated that public and private financing for clim  Initiative adaptation worldwide totaled $14 billion in 2012 (Buchner et al. 2012).    Plans to monitor and evaluate the effectiveness of reducing vulnerability should be put in pl during the design phase. Framework guidelines and tools for adapting M&E have been put forwa 32 A Risk Management Approach to Climate Adaptation in China UNDP (2007), GIZ (Spearman and McGray 2011), and UKCIP (2011) among others. Previous revie adaptation M&E have found that “very few” evaluations of adaptation policies and projects have done (Hedger et al. 2008; Villanueva 2011) and that new frameworks tested in the lab have yet t be rolled out in the field (SEA Change 2013). Challenges to monitoring and evaluating climate ad Introduction Plans to monitor and evaluate the makers, analysts, and stakeholders effectiveness of reducing vulnerability in steps 1 and 3 to determine what should be put in place during the design priorities are and how possible options phase. Framework guidelines and tools for should be evaluated. adapting M&E have been put forward by • Attribution. Due to moving baselines UNDP (2007), GIZ (Spearman and McGray and the complex, multisector nature of 2011), and UKCIP (2011) among others. the process, establishing direct cause Previous reviews of adaptation M&E and effect can be difficult. It can also have found that “very few” evaluations of be difficult to create a counterfactual adaptation policies and projects have been situation to measure what would have done (Hedger et al. 2008; Villanueva 2011) happened in the absence of the policy and that new frameworks tested in the lab or project (for example, what damages have yet to really be rolled out in the field from flooding would have been). (SEA Change 2013). Challenges to monitoring and evaluating climate adaptation cited in • Time frames. The adaptation process previous studies (Sanahuja 2011; Spearman extends beyond the cycle of an and McGray 2011; Brooks et al. 2011) include individual project or policy. The full the following: economic benefits of improved flood protection, for example, may not be • Target setting. Adaptation policies realized until decades in the future tend to lack measurable, clearly defined when a severe flood actually occurs. targets and outcomes. Careful framing Thus in addition to satisfying a long- of the decision, as recommended in term goal, the adaptation process is step 1, can help address this problem. often expected as a practical matter to demonstrate some short-term results • Moving baselines. Even in the absence and show that action is producing of climate change, baseline social and benefits or that progress is being made. economic development will strongly influence exposure and vulnerability. • Maladaptation. While measuring At the same time, M&E must also success is important, it is also account for how changes in the important to understand failure when weather or climate influenced policy it happens. Part of M&E of climate and project outcomes. adaptation should be to scan for unintended consequences and side- • Complexity. Because adaptation effects. represents a complex social process that occurs at multiple scales, the • Learning. Learning does not just framework for M&E will usually focus happen. A specific mechanism (that on a single scale or process. is, performance review and policy reassessment at regular intervals as • Indicators. There is no standard set part of the FYP process) is needed to of metrics for judging success, though ensure that lessons are translated into this problem can be resolved through action and adjustments are made. careful dialogue between decision A Risk Management Approach to Climate Adaptation in China 33 Introduction 4. Conclusion Risk management is as much art as science The purpose of this paper was to outline and requires an up-front conversation on the basic elements of risk-based adaptation priorities in determining what is an acceptable planning. The process described by the level of risk and how trade-offs should be paper is intended to be scalable. A full- balanced. Consultation with stakeholders and blown assessment of climate risks, involving a clear statement of public policy objectives the development of sophisticated modeling are key elements of priority setting. tools and quantitative scenario analysis, may require up to a year and a budget of $100,000 With risk management, the process is just to $500,000.30 This level of analysis may be as important as the outcomes. How the warranted for sectors with long investment process is structured matters (Jones and time scales and decisions involving Preston 2011). This is particularly true high sunk costs, possibly irreversible with managing the use of information. consequences, and constraints on future Traditionally, adaptation has been options. In cases where the stakes are much dominated by prediction-led approaches lower and the decision is less sensitive to that put the climate science out in front of climate change uncertainties, a light-touch the decision. The risk management process is screening of climate risks and adaptation policy led, so the emphasis is much more on options may be more appropriate. This framing the decision first and then engaging kind of screening can be done within a few with scientists and other experts to generate months and at much lower cost. fit-for-purpose information about the exposure and vulnerability of the sector to Rather than prescribing a single present-day and future risks. methodology, the aim of the process is to make risk-informed decisions that take fuller Risk management as an approach to climate account of uncertainties. Uncertainty is at adaptation planning is still relatively new in the heart of every long-term policy problem China, but it is beginning to gain traction. The and is not unique to climate change. Policy adoption of risk management in public policy makers and investors confront uncertainty can be seen in recently introduced regulations when dealing with future commodity prices, for the prevention and reduction of risks from exchange rates, and R&D outcomes. As a weather disasters and in efforts to develop principle, risk management emphasizes the risk assessment guidelines and systems for need to cope with and manage uncertainty floods, droughts, and extreme weather by the and to not be disarmed by it. CMA and National Committee on Disaster Reduction (NDRC 2012a). 30 Time and financial cost estimates are for illustrative purposes only and are based on reported costs for RDM in Hallegatte et al. (2012) 34 A Risk Management Approach to Climate Adaptation in China Introduction One of the challenges to the uptake of risk governments will help, too. As with other management processes and principles in areas of policy for sustainable development, planning for climate change will be closing China’s central leaders will also need to the gap between the climate adaptation strengthen incentives for local governments and DRM communities. Elevating the rank to pursue actions that yield longer-term of the National Committee on Disaster benefits and to signal clearly that managing Reduction and linking the committee more risks is a priority.31 Risk management is in closely with the National Leading Group line with China’s larger development goals on Climate Change can help address this and can help the country achieve those goals challenge. Integrating the disaster response even in the face of deep uncertainty about offices and leading groups on climate change the future climate. in the provincial, municipal, and county   31 Statements by President Xi Jinping at a May 2013 study session of the Politburo reflect a step in this direction. President Xi stressed the need to include criteria for natural resource use and environmental health in official appraisals of economic performance. 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