Borderless climate risks

Written by Robert Watt

Friday, 03 November 2017 00:00

borderless cliamte risks event promo COP23

Side event: A Global Adaptation Goal and borderless climate risks: strengths and limits of the Paris Agreement

15 November, 15:00-16:30, UNFCCC side event, Meeting Room 4

Many climate risks are “borderless”, meaning national adaptation is a global concern. But how do climate impacts cross national borders? Which countries are most exposed? Who should adapt and how?

  • Introduction – Åsa Persson (SEI)
  • A global perspective of borderless climate risk – Magnus Benzie (SEI)
  • The role of private sector in building transnational climate resilience – Sara Venturini (Acclimatise)
  • The economics of the impacts of climate change on international trade – Oliver Schenker (Frankfurt School)
  • Practitioner, negotiator and expert panel discussion, moderated by Richard Klein (SEI) with Maria Banda (University of Toronto), Samah El Bakri (Sudan), Mizan Khan (Bangladesh), Annett Moehner (UNFCCC), John Firth (Acclimatise), Rebecca Nadin (ODI).

What are transboundary climate impacts?

Some climate risks are borderless.

Extreme weather events in one country may devastate harvests of key export crops, creating price volatility in international commodity markets and driving food insecurity in import-dependent countries. Some countries are overly dependent on food imports and have suffered social instability during previous global food price crises. Learning to adapt to food price volatility in a changing climate will be a key challenge for such countries, for example in Senegal.

Climate change will also affect the flow of capital returns from overseas investments and disrupt global supply chains in several key sectors. Severe flooding in Thailand in 2011 cost as much as $46bn closing 200 factories and disrupting global electronics and automotive supply chains in faraway countries such as Japan and the UK.

Climate change may also alter the pattern of cross-border migration creating new opportunities and challenges for regions that are directly affected.

map of transnational climate imapcts exposure levelsMap of transnational climate imapcts by exposure levels. Credit: SEI

Some countries that have traditionally seen themselves as having low exposure to climate risk may in fact face significant challenges when adapting to transboundary climate impacts. For example, Sweden, one of the least vulnerable countries in the world according to traditional assessments (ranked 174/181 in the ND GaIN Index), rises to the top 50% in our assessment of Transnational Climate Risk Exposure (97th out of 203 countries worldwide). Sweden’s deep integration into global systems and its numerous complex links to other parts of the world, means Sweden will need to build resilience to climate risks globally if it is to successfully reduce its own risk exposure.

Other countries that are already highly vulnerable may require additional assistance to adapt to borderless risks. Kenya is highly exposed to negative climate impacts in neighbouring countries in the Horn of Africa. This has been demonstrated during past drought events, which have devastated Kenya’s neighbourhood, causing instability and insecurity inside Kenya. This has prompted Kenyan support for regional approaches to build drought resilience. Future climate change in East Africa may threaten Kenya’s cross-border trade, its financial investments in neighbouring countries and further affect human and livestock migration across Kenya’s porous borders. Perhaps regional approaches to adaptation more generally are warranted?

Because some climate risks are borderless, adaptation in one place will determine the remaining level of climate risk and adaptation needs in other places. More effective adaptation in rice exporting countries would benefit importers such as Senegal, for example. Likewise, electronics and automotive companies in the UK and Japan have an interest in improving flood resilience in Thailand’s industrial parks to avoid future losses.

Adaptation interventions may create negative as well as positive impacts beyond the local areas where they are implemented. In some cases, adaptation may simply redistribute vulnerability rather than reduce it, unless a more global perspective is applied. For example, adaptation efforts in global commodity markets such as coffee may protect one producer at the expense of others elsewhere.

What needs to be done?

The Global Goal on Adaptation and other efforts to take stock of climate change measures, such as those described in Parties’ Adaptation Communications, should track measures by national and international actors to reduce vulnerability to borderless climate risks.

Responding to borderless climate risks may also require new approaches that lie beyond the current practice and financing of climate adaptation.

  • More regional and multi-country adaptation financing mechanisms will help to address shared transboundary climate risks in vulnerable regions; regional adaptation initiatives are currently rare and lag far behind their potential.
  • Reforms may be needed in global systems such as trade and finance to better manage climate risk, for example by allowing greater flexibility to ensure necessary protection for import-dependent countries (e.g. on free trade conditionality attached to aid) or improving risk disclosure and transparency in financial reporting to help investors, insurers and companies at the top tiers of international supply chains to better manage climate-related risks. These kind of activities are not always labelled or monitored and studied as part of “adaptation” today.
  • International adaptation finance, from bilateral agencies and multilateral institutions, is still needed for adaptation to ‘in-country’ climate risk.
  • Existing commitments on adaptation finance should not be re-allocated so as to serve the self-interest of the donor country, by reducing its risk exposure, but honour agreed-upon principles regarding vulnerability and equity.
  • In addition, three complementary actions should be considered: (i) enhanced support for regional adaptation efforts to address a regional climate risk; (ii) using other institutions, policy processes and funding streams – beyond what is currently considered “adaptation” – (e.g. ODA, private investment/ finance, WTO, FAO, etc.) to reduce borderless climate risks; (iii) recipient countries should examine whether the funding allocation between adaptation efforts targeting ‘in-country’ and borderless climate risks is appropriate.

Do we have all the necessary knowledge to act on borderless climate risks?

More research and assessment of borderless risks is needed to improve the coverage of National Adaptation Plans and Adaptation Communications to guide the adaptation efforts of bilateral and multilateral donors, including global adaptation finance facilities.

  • The UNFCCC Adaptation Committee should mobilise a knowledge-sharing programme on borderless climate risks.
  • The design of processes for the global stock-take – and tracking of the global adaptation goal – should consider how borderless climate risks might be incorporated; ,Parties should be incentivized to disclose more information about such risks so that they can be monitored globally.
  • National and international research funders should pool resources and enable international coordinated efforts, not least to build relevant research capacity in the developing world.
  • There is large scope for intensified sharing of risk assessments between public and private actors, for example in the agriculture and food sector.