Author: Andrew Warren Ad Jeuken Aimee Hampel-Milagrosa Alessio Giardino

A 5-step rapid approach to climate resilient investment planning

Source(s): Development Asia
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Introduction

Any gains toward eradicating Asia and the Pacific’s numerous development challenges are always under threat by climate change. Successes related to poverty and inequality reduction, or improved water, food, and energy security may be crippled by one extreme hazardous event such as a flood. On top of that, slow onset events, defined as events that gradually occur such as sea level rise or increasing temperatures can further aggravate this situation.

One way to overcome these challenges while remaining resilient is to pursue climate resilient development. While development aspirations at the local level are multi-faceted, investments traditionally target a single development objective focused on addressing short-term needs without proper consideration for long-term implications. Promoting climate resilient measures, informed by the establishment of a climate risk and vulnerability context is central to the Paris alignment assessment framework jointly set up by all multilateral development banks.

A rapid approach to climate resilient investment planning involves five key activities that result in a series of climate resilient development pathways. It presents short-term actions that offer low potential for future regret and includes medium- to long-term options depending on which conditions emerge. This methodology[1] was used in preparation for an ADB solid waste management project in Noro and Munda in the Solomon Islands.

Climate Resilient Development

Climate resilient development involves planning investments that promote integrated and resilient outcomes. This includes considering sequences of least regret and flexible solutions that address multi-faceted development objectives and promote long-term resilience.

Strategic investment plans need to start with solutions that improve climate resilience under the most plausible future conditions, while being flexible enough to be adapted over time to the conditions that eventually emerge. The key is to keep options open through the implementation of low-regret investments that avoid locking in the countries to earlier investments, should it later prove more beneficial to select another.

The approach helps address the shortcomings of climate risk assessment methods that rely on extensive and sophisticated modeling approaches and yet yield an incomplete picture. This method is informed by a rapid climate risk assessment according to readily available information and helps to prevent possible maladaptation. It draws upon meaningful bottom-up engagement with local stakeholders to ensure that investment plans are targeted towards local expectations, needs, and priorities.

5-Step Rapid Approach

1. Establish development priorities, objectives, performance indicators and risk drivers. 

Development priorities can be identified from existing needs assessments, town plans, or performance against the Sustainable Development Goals. Local stakeholders should validate these priorities to ensure that they align with local needs and vulnerabilities. Development priorities are translated into a set of objectives and performance indicators. Principal climatic and socioeconomic drivers of risk to achieving these are also identified.

In Noro and Munda, development priorities identified by stakeholders are: (i) providing equitable solid waste management and water, hygiene, and sanitation services for the urban population; (ii) stimulating sustainable economic development while improving employment outcomes and avoiding negative environmental impacts; and (iii) improving disaster response and recovery resilience for infrastructure and settlements. The key drivers of risk include climate change (e.g., sea level rise, extreme weather) and the urban population’s continued growth.

2. Assess the likelihood of current and future risks and their plausible impact. 

A rapid, qualitative risk assessment on current and projected future conditions should be conducted. Data can come from global datasets, local data, and previous studies, but all these must be verified through stakeholder discussions of known vulnerable hotspots and past hazards. This is followed by an impact analysis that considers risk-related hazards, exposure, and vulnerabilities, and how these may develop under ranges of future climate and socioeconomic conditions. The likelihood of risk and its impacts are depicted via a traffic light system for categorization.

In Noro and Munda, climate change is predicted to yield increased temperatures, extreme rainfall, intense cyclones, and sea level rise. When combined with increasing urban population, the largest risks to equitable public service delivery, health, and the environment were those related to flooding of solid waste management, sanitation, and water treatment infrastructure.

3. Identify key strengths to help achieve the investment’s climate resilient development objectives. 

Existing natural or infrastructure assets, economic activities, as well as levels of community support and cohesion should be assessed for the potential contribution they can make to any proposed investment.

In Noro and Munda, their abundant natural ecological wealth and existing transport links can be used to expand sustainable tourism, while its existing port and fisheries-based economy and community can be harnessed to help diversify and grow the local economy. These strengths should be protected and made broadly resilient to any climate-related impacts through the investment plan.

4. Outline investment options and pathways that achieve development objectives, build climate resilience, and harness identified strengths. 

Investment options should be assessed against their potential for future regret, taking into consideration their propensity to become stranded assets that can no longer serve their function or recoup their investment costs due to the changed conditions. The investment options are formulated into sequences called investment pathways, which prioritize low regret investments in the short-term and leave higher regret investments as options for the future—but which remain contingent on the conditions at the given time.

In Noro and Munda, limited and deficient sanitation infrastructure is currently causing negative public health impact. Investments to improve this situation through the installation of household latrines and establishment of a local fecal sludge management facility were presented as valid, low regret investments in the short-term. Switching toward more centralized sewage management could be considered for the future provided the population continues to grow as anticipated and local capacities to manage such infrastructure are developed. With improved town planning to ensure settlements and if the sanitation infrastructure is not located on land vulnerable to future climate change, such investment will help drive transformational and climate resilient public health improvements in the two towns.

5. Identify key actions that ensure planned investments can be successfully implemented across the entire planning horizon. 

Successful implementation relates to necessary institutional, capacity development, or governance arrangements. It may also include additional technical studies to improve understanding of the conditions or creating land reservations for future infrastructure.

In Noro and Munda, a critical enabling intervention across all three development priorities was capacity development of local governments in terms of essential services provision, economic and town planning, ecological protection and enforcement, and disaster response and recovery.

Experience in applying the 5-step approach in Noro and Munda demonstrated that the positive framing of development and resilience as opposed to climate-proofing of short-term measures better connects to the long-term perspective of local stakeholders. It is important that local verification steps are well organized and executed as this approach may result in wishful thinking without local feedback. Naturally, rapid assessments should be followed by more detailed evaluation of the prioritized pathways.

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Country and region Asia Oceania
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