Adaptive Policymaking for Agriculture, Water Resources
and Climate Change
Designing Policies that can Adapt to
a World of Uncertainty, Change and Surprise
COP 11, Montreal
9 December 2005
Why Study Adaptive Polices?
Climate Phenomena Climate Impact Higher Maximum Temperature (very likely)
increased heat stress in livestock increased risk of damage to a
number of crops
Higher Minimum Temperatures (very likely)
decreased risk of damage to a number of crops and increased risk to others
extended range of some pest and disease vectors
More Intense Precipitation Events (very likely)
increased flood, landslide and mudslide damage
increased soil erosion Increased Tropical Cyclone intensity (likely - over some areas)
increased risks to human life, risk of infectious disease epidemics, many others
increase damage go coastal ecosystems such as coral reefs and mangroves
Increased Droughts and Floods associated with El Nino events (likely - over some areas)
decreased agricultural and rangeland productivity in drought and flood-prone regions
Increased Asian Monsoon Variability (likely)
increased flood and drought magnitude and damages
The world’s poor are most heavily dependant on agro-ecological services, and most vulnerable to deteriorating environmental conditions, worsened but not necessarily created by climate change [IPCC, 2001].
Key point: critical impacts and vulnerabilities are in agriculture and water resources
The details are, however, unknowable: global and regional perspectives
The Need: recent IDRC research [Moench et al, 2003]
“When situations are characterized by variability, uncertainty and change, conventional planning scenarios provide little guidance regarding future needs and conditions.”
“Specific solutions are less important than the existence of processes and frameworks that enable solutions to be identified and implemented as specific constraints and contexts change.”
Civil aviation policy of Netherlands: expansion of Schiphol airport
“If we were able to predict the future accurately, preferred policies could be identified in principle by simply examining the future that would follow from the implementation of each possible policy.”
Project Research Premise
the adaptive capacity and resilience of communities is a critical aspect in the transition to sustainable development…
and one of the important factors in building adaptive and resilient communities is for the public policies, which influence the behaviour of communities, to themselves be adaptive and resilient to uncertainty, change and surprise.
Research Hypothesis
Policies and instruments that are adaptive have specific characteristics and mechanisms that make them adaptive
These characteristics and mechanisms are poorly understood at
both a practical and theoretical level.
Project Goal
To advance the understanding of adaptive policies and policy instruments to help government agriculture and water resource policymakers at the local, state and federal levels to design adaptive policies – policies that have the following characteristics:
Robustness - the ability to be effective under a range of anticipated conditions.
Adaptability - the ability of a policy instrument to respond well to unanticipated circumstances and longer-term change.
Adapted from Walker, W.E., S.A. Rahman, and J. Cave 2001. Adaptive policies, policy analysis, and policy-making. European Journal of Operational Research 128: 282-289.
Our Current Conceptual ThinkingRules and Delivery
Idealized illustration of policy design and implementation
Policy Implementatio
n
InstrumentDesign
Monitoring, Evaluation
& Improvemen
t
Understanding
the Issue
ObjectiveSetting
Instrument Rules
Policy Design
Learning & Improveme
nt
Staff Trainin
g
Operation
Instrument Delivery
Delivery System
Development
Monitoring &
Evaluation
Adaptability Via Monitoring, Learning and Improvement
Stage Setting
Assembling a Basic Policy
Others’ actionsUnforeseen eventsChanging preferences
Vulnerabilities
Signposts
Mitigating actions
Hedging actions
Reassessment
Corrective actions
Defensive actions
Triggers
Certain
Uncertain
from Walker, W.E., S.A. Rahman, and J. Cave 2001. Adaptive policies, policy analysis, and policy-making. European Journal of Operational Research 128: 282-289.
Walker et al. (2001)
Adaptability Via Defining CharacteristicsExamples:
Ensure that social capital remains intact (Ruitenbeek and Cartier 2001).
Create opportunity for self-organisation and build networks of reciprocal interaction that foster trust and cooperation (Berkes et al. 2003; Glouberman et al. 2003; Axelrod and Cohen 2000)
Promote variation and redundancy (Berkes et al.; Glouberman et al.)
Combine experiential and experimental knowledge (Berkes et al.)
Insights from Case Study Research – Canada’s Crow Rate
1897
Crow Rates terminated and replaced with
Western Grain Transportation Act
1984
Western Grain Transportation Act terminated
1996 20011919
Crow’s Nest Pass Act
1903
Manitoba Government Requests Change:
War Measures Act Suspends Crow Rates
1922 1925
Crow Rtes put into Railway Act as “statutory grain rates”
19611927
Crow Rates extended to westbound export grain shipped to west coast
Crow Rates extended to rapeseed and flaxseed.
Crow Rates Restored for Grain and Flour
Lower than anticipated inflation since
Temporary maximum freight rate period ends
All producer payments completed
Inflationary period due to pressures
of First World War
Substantial drop in grain prices
War time price controls lifted
Period of revenue loss for railways sparks a chain of studies to understand the issue
1946
Sources: Excerpts from Rothstein (1989); Earl (1996); Schmitz et al. 2002)
Insights from Case Study Research – Canada’s Crow Rate
Adaptability
(the capability to recognize a significant change in conditions, interpret and learn from the information, and make necessary changes)
Robustness
(capability to deal with a range of circumstances
through discretion)
High Flexibility
Low Flexibility
1897-1925
1925-1984
1984-1996
India Case Study Research – Background
Vulnerability of Indian agriculture to climate change Poor insurance penetration - informal sector excluded Rural credit – indebtedness – poverty
Variation during 1960-82 of (a) rice yield over the Indian region (b) total food grain production (c) all-India rainfall (Source: Gadgil 1996)
Insights from India case study research: Evolution of crop insurance
Farm income insurance scheme
19791972
Weather indexed insurance
1999
National agriculture insurance scheme
2003 20041984
Experimental individual scheme
1985
Pilot crop insurance scheme
Insurance linked to short-term credit2% premium, subsidy for small farmersBasic rainfed foodgrains covered
IRDA Act
Entry of private and foreign players
Green Revolution
Very poor coverage of farmersVery low premium to claims ratio
MFIs, SHGs, village internet kiosks
1978
Comprehensive crop insurance scheme
1997/8
Experimental crop insurance scheme
AIC takes over from GIC
Coverage and financial viability still an issue
Economic reforms
For wheat and paddyTo replace NAIS
2001
Working group for Xth Plan
1991
High level task force
Higher premiums (subsidy for small farmers to be phased out)Option of higher risk for higher premiumExtended to non-loanee farmersCommercial crops included
Insights from India case study research
Crop insurance robust by definition: helps deal with range of weather conditions Problems: coverage, financial viability, adverse selection Long delays in payment of claims Small and marginal farmers lose out
Weather indexed insurance MORE robust Minimizes adverse selection No need to draw up and monitor individual contracts Protects overall income rather than yield of specific crop Improves farmers’ risk profile and access to bank credit Quick payouts can improve recovery times Important role for micro finance institutions Need for institutional backing
Adaptability Periodic review and improvement of crop insurance Weather insurance learning from pilot schemes
Future Activities
Community-level research Conducted in India by TERI and
Canada by IISD To identify the characteristics and
mechanisms of policy instruments that can adapt to surprises and longer-term changes
Synthesis Paper No.1 (available April 2006).
Project Website and Contact Information
www.iisd.org/climate/canada/adaptive_policy.asp
Preety Bhandari
The Energy and Resources Institute
Stephan Barg
International Institute for Sustainable Development [email protected]