4. Policy, governance and institutions for reducing and managing losses and damages

Climate-related extreme events and slow-onset changes are already having devastating and widespread impacts on lives and livelihoods. This is especially true when these changes occur alongside broader social, economic and political stressors. To illustrate, while East Africa in 2020 had to deal with the COVID-19 pandemic and its associated crisis, it also coped with flooding from one of the wettest rainfall seasons in 40 years. Floods displaced hundreds of thousands of people. They also contributed to the loss of crop and livestock equivalent to 70 000 hectares (ha) and 96 000 animal deaths. Meanwhile, the region suffered through the worst locust outbreak in 25 years (Kassegn and Endris, 2021[1]). These concurrent disasters further exacerbated prevailing food insecurity in the region, threatening development gains. The Philippines was also hit by concurrent disasters in 2020. During the COVID-19 pandemic, 22 tropical cyclones hit the country, including the strongest ever recorded to have made landfall (Tropical Cyclone Goni). The cyclones caused widespread destruction, leaving thousands homeless (Rocha et al., 2021[2]). The intensity and frequency of climate hazards will grow with continuing warming of the climate system (IPCC, 2021[3]).

Decision makers at all levels are faced with climate variability interacting with current and projected future levels of climate change. As such, they must determine which risks to address, how, to what extent and when to act. At the household or community level, adaptation to weather and climate hazards may involve adjustments to, or a shift in, livelihood choices. This can entail a change in crops or a shift from farming into other income-generating activities. It may also lead to migration in search of new opportunities, either nationally or internationally, or even displacement (IPCC, 2014[4]). At the national level, damaging weather and climate hazards can reverse development gains. Such a reversal may increase income inequality and the vulnerability of already marginalised segments of society (World Bank, 2021[5]). Hazards directly affecting one country, segment of society or sector may spread to other parts of society. In some cases, hazards may cross local, regional or even national borders, as illustrated in Box 4.1.

Chapter 4 highlights approaches to reduce and manage the risks of losses and damages from climate change. The chapter focuses on the role of policy, governance and institutions. The role of finance and technology are covered in Chapters 5 and 6, respectively. The remainder of this chapter is structured in four sections. Section 4.2 examines approaches to decision making under uncertainty. Section 4.3 discusses approaches to address the components of climate risks (hazards, exposure and vulnerability). Section 4.4 explores the role of institutions, governance and norms. Section 4.5 discusses the implications of sea-level rise (SLR) on policy priorities and decision-making processes in Small Island Developing States (SIDS).

Chapter 3 illustrated the currently serious and potentially devastating future impacts of climate change. These impacts become more likely if action to reduce and manage the risks is not commensurate with the goal of the Paris Agreement to limit temperature increase to 1.5°C. Following 10 000 years of a relatively stable climate, the Earth is now moving into a climatic regime that is rapidly changing (IPCC, 2021[3]; Marshall and Plumb, 2008[6]).

Areas that historically have had to manage floods may in the future face challenges associated with droughts for which there is little management experience. In high mountain regions, for example, snowmelt and glacier retreat are contributing to a short-term increase in water availability. This coincides with other risks, including glacier lake outburst floods. Following an increase in water supply in the short-term, water supply will start to diminish (Hock et al., 2019[17]). In the Himalayan region, uncertainties in climatic projections and glacier dynamics could have major implications for more than a billion people in the wider region that depend on this Asian “water tower” (Scott et al., 2019[18]; Mishra, 2015[19]).

Areas at risk of wildfires may see the frequency and magnitude of these events increase to unprecedented levels (Goss et al., 2020[20]). Slow-onset changes such as SLR will increasingly threaten livelihoods and lifestyles of coastal and island communities. These include threats to traditional belief and cultural systems (McNamara, Westoby and Chandra, 2021[21]). Crossing tipping points in the climate system could trigger major transformations to the climate system and significant disruptions to economies and societies, both regionally and globally. Thresholds at which such tipping points would be triggered are uncertain. However, some may already be close or even exceeded (Lenton et al., 2019[22]). This highlights the novelty of potential challenges for policy makers in identifying and implementing approaches to reduce and manage the risks of losses and damages from climate change.

Different types of uncertainties limit the applicability of historical data for understanding future climate hazards. As discussed in Chapter 2, this includes uncertainties stemming from i) future emissions linked to different demographic and socio-economic pathways; ii) uncertainty in the response of the global climate system to different levels of emissions and aerosols; and iii) the natural variability of the climate system (Zheng, Zhao and Oleson, 2021[23]). Additionally, there are uncertainties in the other components of climate risk (i.e. exposure and vulnerability), such as the sensitivity to a given change in climate of people, assets and activities. These uncertainties have called into question the traditional “predict then act” approach. Instead, given the high costs of inaction or delayed action, policy processes and decisions can usefully be guided by robust and flexible policy choices that make them suitable to a range of potential future climates (Vincent and Conway, 2021[24]).

A focus on robustness and flexibility in decision making needs to consider the values and perspectives of actors in the process (Marchau et al., 2019[25]). One key aspect is the level of uncertainty in the system about which a decision is needed (see also Chapter 2). If the extreme ends of the decision-making spectrum are defined as full certainty or total ignorance, four intermediate levels of uncertainty include (Marchau et al., 2019[25]) (see also Figure 4.1 )

  • Level 1: There is not full certainty but decision makers generally do not consider it necessary to measure the degrees of uncertainty. This can apply to short-term decisions for a well-defined system where historical data are seen as a good indicator of the future.

  • Level 2: The parameters in the model used to describe the real-world system are used to estimate the probability distribution for a few alternative futures. Related policy processes can be informed by expected outcomes and levels of acceptable risk.

  • Level 3: There is a limited set of plausible futures, but the level of uncertainty is such that probabilities cannot be assigned to them. Instead, scenario analysis can point to policies that will produce more favourable outcomes. The “best” policy will produce the most favourable outcomes (a political/social choice) across the different scenarios.

  • Level 4: This level of deep uncertainty can apply to two situations. In the first, there are many plausible futures due, for example, to lack of knowledge or data about the functional relationships. In the second, the future is not even qualitatively known due, for example, to unpredictable high-impact events. It can either be difficult (first case) or impossible (second case) to describe interactions among the variables, determine the probability distribution for different outcomes or even value the desirability of alternative outcomes.

In terms of climate change, different hazards across different timescales will have different levels of uncertainty associated with them. For example, SLR rise is a slow-onset change that occurs over decades. Conversely, extreme events such as heavy precipitation can occur over hours or days. The uncertainty of these different types of hazards, and thus how to address them, varies widely. In the context of SLR over the coming decade, it may be sufficient to consider a small range of possible futures. These would revolve around a central estimate determined by the rate of thermal expansion of the upper sea surface and the additional water from glacier and ice-sheet melt. On longer timescales, there is arguably a limited number of different plausible futures. However, it is difficult to place credible probabilities on the occurrence of each possible outcome.

For extreme events, the occurrence of some can be predicted on a timescale of several days, such as the heavy precipitation event in Pakistan in 2010 (Webster, Toma and Kim, 2011[27]). On longer timescales, dynamic aspects of climate change, such as changes in average precipitation, are highly uncertain (Shepherd, 2014[28]). The potential crossing of tipping points in the climate system is at the high end of the uncertainty spectrum. It is not possible to attach probabilities to the activation of particular tipping points. Moreover, there is a wide range of potential outcomes from crossing a given tipping point. Some future states of the climate are unknown or very imperfectly known.

The past few decades have seen a rise in decision-driven approaches that recognise the need for decisions to both reduce the risks and to strengthen resilience in the face of inherent uncertainties. Such decision-driven approaches typically rely on institutional structures that facilitate an iterative approach informed by learning and recognise the interconnectedness, complexity, feedbacks and thresholds across different systems and impacts. Box 4.2 briefly summarises three approaches to decision making under uncertainty that have received prominent attention in the academic literature and increasingly inform policy processes. Discussion on further approaches and additional details are available in Marchau et al. (2019[25]). Box 4.3 illustrates how different approaches combined can guide decision-making processes in the agricultural sector in Uganda, where future levels of precipitation are uncertain.

The technical complexity of some decision-driven approaches limits their applicability to developing countries. In some developing countries, for example, data availability may be sparse or unreliable and computing and technical capacities inadequate (Shortridge, Guikema and Zaitchik, 2016[31]). In such contexts, simplified analytical processes have been applied. For example, hydrologic models are replaced by simple relationships or assumptions about how climate conditions impact streamflow. They may also focus on individual variables rather than the broader systems (Shortridge, Guikema and Zaitchik, 2016[31]). Such simplifications require a good understanding of potential implications on outcomes. Alternatively, policy choices can be tested against explicit statements of causal relationships, or theories of causation, to guide reasoning over choices and outcomes (Popper, 2019[40]).

This explicit treatment of uncertainty is particularly valuable in the context of large investments in long-lived infrastructure such as energy, transport, coastal protection and water management systems (Shortridge, Guikema and Zaitchik, 2016[31]). Failure to treat uncertainty risks locking in long-lived investments that may exacerbate the exposure of people and assets to future climate risks. A focus on uncertainty instead contributes to approaches that perform well under a set of different future conditions. This can then be more politically palatable than large and potentially irreversible decisions (Bhave et al., 2016[30]).

The Thames Barrier illustrates the treatment of uncertainty. The Barrier was designed to be adaptable to different SLR rates and change affecting the estuary up to around 2070. Different options have been identified for improving or replacing the Barrier. However, given the adaptive nature of the approach, a final decision will not likely be needed until around 2040 (UK Government, 2021[37]).

Where long-lived infrastructure is in place, and the focus is largely on maintenance and modification rather than construction, the resilience of the system to different climate futures should be assessed. This process may guide efforts to retrofit infrastructure or add redundancy. In this way, when extreme weather events bring down one component of the system, other components can take over (OECD, 2018[41]; OECD, 2020[42]). While adding redundancy to systems will increase initial costs, this can be seen as a form of insurance against extreme events.

The benefits of investments to address these risks of losses and damages may only materialise over time. This can pose a challenge for elected officials (Evans, Rowell and Semazzi, 2020[43]). Research has shown that voters are more likely to reward an incumbent presidential party for delivering disaster relief spending than for investing in disaster preparedness (Healy and Malhotra, 2009[44]). Most decision makers also respond to budgetary planning cycles that often do not favour a focus on long-term goals (Evans, Rowell and Semazzi, 2020[43]). Climate hazards must therefore be clearly communicated for advances in science to guide decision making (Jack et al., 2021[45]) (see Chapter 2).

Co-production approaches where producers and users of the information work together to translate science into actionable information can also guide policy processes (Vincent et al., 2021[46]). This can also facilitate a focus on local or sector perspectives (Cornforth, Petty and Walker, 2021[47]). Agreed and transparent processes for addressing the preferences and values of current and future generations are also important (Lawrence and Haasnoot, 2017[48]) (see Section 4.4.2). Unprecedented extreme events in 2021, such as the record temperatures over British Columbia, Canada, underline that damaging climate hazards are no longer for the distant future.

Reducing and managing the risks of losses and damages from climate change requires enhanced focus on the three components of climate risks (i.e. hazard, exposure and vulnerability), the drivers that bring about changes in those components and their interactions, as conceptualised in the Intergovernmental Panel on Climate Change (IPCC) (see Chapter 1). Hazards are the result of the heating effect of previous greenhouse gas (GHG) emissions with complicated influences on regional weather and climate from other pollutants, such as aerosols. Levels of exposure and vulnerability at local, national and regional levels to these different hazards have been shaped by historical, geographical, social, political, cultural and economic circumstances.

However, countries cannot reduce or manage to all risks, whether due to financial, technical or physical constraints resulting in losses and damages (see Chapter 1, Box 1.2). In the face of often devastating or repeated losses and damages, the importance of complementing climate change adaptation with efforts to reduce disaster risks and otherwise limit the creation of hazards and strengthen the resilience of systems has risen on the international agenda (OECD, 2020[57]). A focus on the components of climate risks can be explicit or implicit. An explicit focus, for example, could examine land-use management, agricultural practices and infrastructure standards. An implicit focus might look at livelihoods development, social protection or basic health. Whether explicit or implicit, such a focus may occur ex ante or ex post. An ex ante focus could pro-actively reduce the creation of the hazard or to lessen exposure and vulnerability. An ex post focus could lessen the impact of hazards, including emergency relief and longer-term reconstruction to reduce future vulnerability.

Given the pace and extent of climate change, rapid and in some cases transformative changes (Fedele et al., 2019[58]) may be needed, rather than incremental improvements in resilience. Such a transformative approach could aim at fundamentally altering the relationships between the hazard and one or both of the other two components of climate risk. For example, an incremental change – often through technical improvements – could achieve a marginal reduction in exposures or vulnerability. Conversely, in a more transformative response to exposure, a community could be relocated in response to SLR and coastal flood risks (see Section 4.3.3 for other examples). Similarly, large-scale policy interventions targeting pre-existing health or financial inequalities could transform the geography of vulnerability to certain hazards. Given the scale, novelty and frequency of climate-related hazards now and increasingly in future decades, societies will either have to deliberately transform themselves or face unplanned transformation into potentially unfavourable states (Levin et al., 2021[59]).

This section examines the role of policy in addressing each of the three components of climate risk, while Section 4.4 examines the role of policy, governance systems and institutions. The role of finance in reducing and managing risks is discussed in Chapter 5.

The IPCC risk framework emphasises the mitigation of GHG emissions as a central priority to reduce the magnitude of climate hazards. Success in limiting the average global temperature increase is determined by the ability of the international community to achieve timely “net-zero global anthropogenic carbon dioxide (CO2) emissions and declining net non-CO2 radiative forcing” (IPCC, 2018[60]). Hence, Article 4 of the Paris Agreement calls for Parties to rapidly reduce emissions “to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century” (UNFCCC, 2015[61]).

In the case of CO2, such a balance can be achieved through natural “carbon sinks” such as forests and peatland. However, they do not guarantee permanent sequestration of CO2 in the same way as technologies such as carbon capture and storage. Still, they can simultaneously offer other ecosystem benefits, such as reduced vulnerability of downstream river catchments to flood hazards. Action to reduce CO2 emissions will also reduce emissions of other pollutants (e.g. methane, nitrous oxide and black carbon) that contribute to climate change. At the same time, additional non-CO2 mitigation measures (e.g. in agriculture and waste treatment) could help reduce the pace of climate change and limit global average surface temperatures in the short term. These measures could also provide immediate air quality benefits (IPCC, 2018[60]; Harmsen et al., 2019[62]).

Net-zero commitments vary in terms of the definition used; the timeframe; target; status; scope of GHG emissions and sectors covered; as well as governance mechanisms and institutional arrangements adopted. Moreover, many details are currently unclear, especially how countries plan to meet their net-zero commitments, the relative focus on emissions reductions, removals or use of international carbon markets; and the underlying assumptions (e.g. future technologies for direct air capture and land availability) (Jeudy-Hugo, Lo Re and Falduto, 2021[63]).

A survey published in March 2020 found that 124 countries, representing 61% of global emissions, had net-zero commitments in place. Around 40% of these commitments focus on CO2 emissions, a slightly larger share target all greenhouse gases, with the remaining 14% not specifying which gases are covered (Black et al., 2021[64]). The survey also noted that national commitments are increasingly complemented by commitments put forward by subnational governments and the private sector. Over one-fifth of public companies surveyed in 2020 have net-zero commitments (Black et al., 2021[64]). Of these, only around 20% meet the robustness criteria defined or informed by the UN Race to Zero Campaign (pledge, plan, proceed, publish).

National circumstances will determine countries’ net-zero pathways. These circumstances include levels of economic development, resource endowments, and the drivers of emissions by sector or activity. Equally important is the extent to which their emissions reduction pathways focus on reducing demand, as well as decarbonisation of key technologies and infrastructures (OECD, 2017[65]). Some pathways risk not being realised. This includes pathways that exhibit continued growth in CO2 emissions in the next decade or beyond. They also assume availability and extensive use of carbon dioxide removal (CDR) technologies later in the century. The risk for such pathways is particularly high since most CDR technologies are still at the early stages of development, which contributes to high uncertainties for policy makers.

All sectors will require rapid, far-reaching and unprecedented transitions with deep emissions reductions (IPCC, 2018[60]), but potential for decarbonisation varies. Agriculture and forestry sectors, for example, have more potential for decarbonisation than aviation and heavy industries (Rogelj et al., 2021[66]; OECD, 2017[65]). For the energy sector to achieve net-zero emissions by 2050, two policy shifts are required. First, all new oil, methane gas and coal exploration projects will have to be stopped. Second, gas must be precluded as a “bridge fuel” in the energy transition (IEA, 2021[67]). This sends an important message to policy makers and investors of the inevitable and urgent need to manage the decline of energy based on fossil fuel.

Some of these fossil fuel investments are underpinned by both direct and indirect support. Direct support comes through budgetary aid in financing fossil fuel projects. Meanwhile, fossil fuel subsidies and preferential tax provisions indirectly support fossil fuel production (OECD/IEA, 2021[68]). Support in 2019 for fossil fuel production rose by 30%, primarily recorded in OECD countries (OECD/IEA, 2021[68]). International public finance is also supporting financing for gas expansion in the Global South, which could mean continued operations for several decades (Muttitt et al., 2021[69]). In September 2021, China announced that it will end financing of all overseas coal projects.

National policies announced or implemented to date fall far short of what is needed to achieve net-zero targets. Policy makers face difficult choices to determine future mitigation pathways. Each choice has implementation challenges, potential synergies and trade-offs with broader sustainable development objectives (IPCC, 2018[60]). The trade-offs, however, are comparatively lower for pathways relying on low-energy demand, low material consumption, and low GHG-intensive food consumption (IPCC, 2018[60]). How policy makers approach these challenging goals will have critically important implications for sustainable development and well-being outcomes, as well as implications for the other two risk components (exposure and vulnerability). As countries seek to recover from the economic aftermath of the COVID-19 pandemic, such pathways also hold greater potential to deliver synergies between climate mitigation and broader sustainable development (or well-being) objectives (Buckle et al., 2020[70]).

The deep transformations required to achieve net-zero globally will be facilitated through fair and inclusive processes for addressing structural change. Such processes must leave no one behind, whether segments of society or across countries (IPCC, 2018[60]). Co-ordinated support in the form of financial or technological know-how will be important for many developing countries. This will allow climate mitigation to be an integral part of development rather than at the expense of it. For example, in the energy sector, developing countries will need to continue to meet the energy needs of growing populations, while reducing emissions. Through international co-operation, the development and implementation of international standards and innovation, countries can pursue these twin objectives in a sustainable manner (IEA, 2021[67]).

Transition strategies that integrate climate mitigation and wider well-being goals will help identify and address trade-offs and enhance synergies between them. This will enhance the benefits and feasibility of mitigation action, making it easier for the population to choose sustainable options (OECD, 2021[71]). At the domestic level, targeted support may still be required for segments of the population directly affected by the transition. These groups may either face loss of employment or higher prices for energy and food (Soergel et al., 2021[72]). Fossil fuel subsidies for production and consumption could be reformed to free up fiscal resources, allowing redistribution of national carbon pricing revenues to these vulnerable groups.

Developed countries carry the primary responsibility to lead the net-zero transition. International climate finance linked to projects that reduce GHG emissions can help accelerate mitigation in developing countries while supporting development. Moreover, targeted finance in large-emitting developing countries can help reduce the risks of losses and damages for all developing countries by lowering the level of hazard. To achieve this outcome, however, emissions must not increase in response to lower hazards, either in the recipient country or elsewhere.

Apart from mitigating climate hazards, the IPCC risk framework aims to reduce exposure of lives, livelihoods, economic activities and assets to weather and climate hazards. LDCs, SIDS, and Arctic ecosystems, high mountains and dryland regions are disproportionately exposed to climate variability and change due to their geographic locations and physical characteristics (IPCC, 2018[60]; IPCC, 2019[73]). Exposure is further determined by factors such as demographic change, urbanisation, natural resource management, the availability of livelihoods options and governance arrangements (IPCC, 2012[74]; Duvat et al., 2017[75]). With economic development, people and assets become concentrated in urban centres. As the climate changes, societies might also become exposed to hazards they have not previously faced and to which they might therefore be more vulnerable. For example, climatic changes may extend the range of disease vectors such as mosquitos.

In some countries, increases in exposure may also be correlated with increased vulnerability (see below). This can occur when rapidly growing informal settlements challenge the capacity of local governments both to provide essential services and enforce land-use management regulations (Sudmeier-Rieux et al., 2015[76]). Urban growth may also lead to an expansion of developments into areas that offer a certain lifestyle (e.g. forests, coasts) but also higher exposure to hazards (OECD, 2021[77]).

Climate change itself will alter the intensity, spatial and temporal occurrence of hazards, transcending the range of historic experience in a given location. Such extremes are occurring now, affecting people that may not have considered themselves exposed to such hazards in the past. This was illustrated by the 2021 heatwave over North America. The maximum temperature in Lytton, British Columbia, Canada, was 49.6°C on 29 June, exceeded the previous temperature record by 4.6°C. Similarly, in June 2020, record-breaking temperatures up to 38°C in the Siberian town of Verkhoyansk, caused wide-scale impacts, including wildfires, loss of permafrost and an invasion of pests. Some areas of Siberia exceeded monthly averages by more than 10°C above the 1981-2010 average.

The relative contribution of climate change and other factors in driving exposure varies across contexts and hazards. Both current and future exposure of assets to coastal flooding, for example, are not primarily due to SLR. Rather, rapid urbanisation strains infrastructure and introduces environmental and socio-economic problems (Hinkel et al., 2014[78]; Mason et al., 2020[79]). In comparison, climate change itself is projected to be a stronger determinant of future exposure to heatwaves than demographic change (Jones et al., 2018[80]). Early warning systems (EWS) have played an important role in reducing the exposure of lives (see Box 4.4). However, this does not always reduce vulnerability of livelihoods and assets.

Following a disaster, decision makers must determine how to respond amid expectations that such events are opportunities for building back or forward better. Experience seems to suggest that the public directly affected by a disaster will often favour policies focused on “building back the same” (Frank, Gesick and Victor, 2021[96]). For people in power, it can be politically difficult to relocate people who have lost everything due to an extreme event. Instead, they are more likely to promise a safe and swift return to previous ways of living. In response to a hurricane, assessments of future risks of similar magnitude at the same location may be sufficiently low to rebuild damaged assets. However, increasing hazards will gradually make this approach less sensible; incentives to reduce future exposure will be urgently needed (Frank, Gesick and Victor, 2021[96]). In other cases, working with nature to reduce and manage climate risks may be an alternative or complementary approach (see Box 4.5).

Approaches to reduce and manage the risks of losses and damages can indirectly contribute to enhanced exposure. Two commonly cited examples illustrate this issue well. First, flood protection measures to reduce vulnerability can indirectly encourage developments on floodplains, increasing exposure. Research from Bangladesh, for example, finds that flood death rates associated with the 2017 flooding were lower in areas with lower protection level (Ferdous et al., 2020[97]). Second, insurance mechanisms play an important role in facilitating the transfer of risks (see Chapter 5). However, in the absence of broader risk management approaches, these mechanisms can unintentionally encourage investments in activities or locations at risk to current or future climatic hazards (Schäfer, Warner and Kreft, 2018[98]; Surminski and Oramas-Dorta, 2013[99]). This does not reduce the potential value of either measure. Rather, it highlights the importance of complementing risk management measures with incentives for economic actors to reduce their exposure to risks and take additional measures to reduce their vulnerability.

Decision makers have different tools and mechanisms that can help minimise exposure. The role of EWS in reducing the exposure of people to forecasted hazards has received a lot of political attention in recent years. The Sendai Framework for Disaster Risk Reduction, for example, emphasises multi-hazard EWS (UNDRR, 2015[100]). Despite this recognition for EWS, almost 90% of LDCs and SIDS identify EWS as top priority in their Nationally Determined Contributions to the United Nations Framework Convention on Climate Change (UNFCCC) (WMO, 2020[101]). This focus on EWS points to a potential policy or financing gap. EWS empower individuals and communities to take preventive measures in a timely manner. It has been estimated that they can save assets worth at least ten times their cost. Meanwhile, a 24-hour warning of a storm or heatwave can reduce damages by 30% (GCA, 2019[102]).

EWS also can be effective in communicating the risks and engaging local communities in generating early warning information (UNFCCC, 2020[103]). The overall effectiveness of EWS, however, depends on the capacity of individual stakeholders, as well as the broader national, regional and international systems. When key capacities are lacking or there are gaps in the EWS, the losses can be disastrous. In 2008, a system to forecast tropical cyclones was in place in the North Indian Ocean. However, the Indian Meteorological Department designated to issue official tropical cyclone forecasts and warning did not have a mandate to provide storm-surge forecasts. When Cyclone Nargis hit Myanmar, the death toll exceeded well above 100 000. Over 80% of deaths were related to the storm surge that washed away more than 100 villages (Webster, 2008[104]).

Regional and international mechanisms facilitate exchange of information. This can include, for example, information related to management of cross-border flood risk in river basins or of climate risks across shared terrains or landscapes such as mountainous areas. Regional and international mechanisms can also contribute to enhanced accuracy of the warnings. However, such mechanisms rarely have authority to trigger action (UNDP, 2019[105]). EWS are increasingly also used in the context of disaster risk financing as illustrated by their application in forecast-based financing, discussed in Chapter 5.

A focus on risk sensitive land-use planning can also help address increased exposure to weather and climate hazards brought about by development, especially rapid urbanisation. Land management regulations can create both incentives and disincentives in guiding public and private investments. Risk sensitive land-use planning highlights the importance of public policies and institutions in managing the expansion of investments and settlements into areas exposed to hazards (Sudmeier-Rieux et al., 2015[76]). Similar to EWS, preventive or ex ante efforts try to identify and address the drivers of exposure to reduce losses and damages. This may be complemented with targeted support to people and communities temporarily or permanently displaced by weather and climate hazards, or worse, who may need resettlement. In Nepal, for example, risk sensitive land-use planning approaches have contributed to significant growth in the generation of hazard, exposure and vulnerability data. These are essential for understanding the risks and developing complementary land-use plans to reduce and manage those risks (Hada, Shaw and Pokhrel, 2021[117]).

The third component of the IPCC risk framework highlights the importance of reducing the underlying vulnerabilities of human and natural systems to weather and climate hazards. The exposure to hazards takes place in complex social, political and technical contexts within and across countries. Many LDCs, for example, rely primarily on natural resources for their domestic income. Large shares of the population are engaged in outdoor work. In some cases, they have limited financial capacity to adapt to a changing climate and to recover from climate-related hazards (Woetzel et al., 2020[118]).

Within countries, vulnerability is shaped by position in society and the ability to contribute to decision-making processes. Such processes include those that determine access to resources, assets and forms of social protection (Thomas et al., 2018[119]). Groups marginalised by, for example, their gender, race, age, disability, income, class identities, religion or geographic locations are particularly at risk (Eriksen et al., 2021[120]; Winsemius et al., 2015[121]). These contexts determine the ability of different segments of society to access resources that enable them to prepare for and recover from hazards. The resources, both tangible and intangible, include income, time, data and information, awareness and ability to access available resources, among others (Thomas et al., 2018[119]).

Climate vulnerability assessments aim to shed light on who or what is vulnerable to the impacts of climate change. They often focus on the vulnerability of infrastructure (e.g. transport and residential dwellings) and means of survival, and health (e.g. food supply and water). Less emphasis tends to be placed on understanding what determines those vulnerabilities. Issues such as poverty or lack of capacity are highlighted as potential drivers without necessarily being explored in sufficient depth (Ribot, 2014[122]). To address this challenge in the context of broader development, many African governments use the Household Economy Approach (HEA). The HEA aims to shed light on the drivers of vulnerability to poverty and food security (Seaman et al., 2014[54]; Acidri et al., 2018[55]) (as also mentioned in Box 4.3).

Given the nature of vulnerability, it is important for policy makers to consider the impact of climate change on more intangible factors critical to maintaining social groups and networks. These factors range from social systems and informal networks to cultural knowledge and practices of daily life. The drivers of vulnerability have been categorised into three types of capacities – economic, institutional and political – each requiring tailored approaches (Thomas et al., 2018[119]).

Economic capacity encompasses income diversity and the ability to move between livelihoods or approaches within them. It can determine the impact of a shock on overall household wealth and well-being (Ahmed et al., 2019[123]). Marginalised segments of the population often live in areas more exposed to hazards. In the event of a disaster, then, the share of wealth lost by these segments tends to be relatively larger than for the rest of the population (Hallegatte et al., 2016[124]). In the absence of income diversity, savings or other sources of finance (e.g. insurance or social protection), marginalised households may resort to negative coping mechanisms. However, actions like taking children out of school, cutting consumption or selling productive assets could create poverty traps (Bowen et al., 2020[125]). Others may choose to migrate pre-emptively as an adaptation strategy or in response to climate impacts (see Box 4.6).

Peoples’ vulnerabilities and lack of institutional capacities can transform hazards into disasters. When Hurricane Katrina hit the western coast of the United States in 2005, it struck an economically disadvantaged region recognised for significant and persistent multidimensional inequality. According to some analyses, the region’s status stemmed from discriminatory policies and institutional practices towards Black communities over many years. These policies and practices affected labour markets, housing and mortgages, among others (Henkel, Dovidio and Gaertner, 2006[133]). At the time of Hurricane Katrina, the per capita and median household incomes of Alabama, Louisiana and Mississippi, the states most directly affected by the hurricane, were below the national average. Meanwhile, the share of the population in these states living in poverty was above average (Zottarelli, 2008[134]).

Economic marginalisation and discriminatory policies and practices were mutually reinforcing. The two drivers together meant the exposed population lacked the capacity or resources to take pre-emptive measures to adequately prepare for Katrina. Similarly, it was unable to take protective measures in response, such as by securing safe housing or relocating (Thomas et al., 2018[119]). These vulnerabilities were played out in the context of the built environment. Poorer segments of the population were more likely to settle in cheaper and less desirable coastal locations disproportionally exposed to weather and climate hazards. In terms of recovery, they were also relatively uninsured against floods (Henkel, Dovidio and Gaertner, 2006[133]).

Political capacity in the form of, for example, active participation in decision-making processes plays an important role in determining access to resources, policy approaches and decisions. Adaptation initiatives seek to strengthen the resilience of communities to the impacts of climate change. However, a review of adaptation-related development finance found they often failed to address the underlying drivers of individual or community vulnerabilities (Eriksen et al., 2021[120]). In some cases, adaptation finance inadvertently reinforced, redistributed or created new sources of vulnerability. Priorities determined by local elites, for example, can feed into existing power dynamics and reinforce inequalities. Alternatively, if not carefully managed, a hazard in one community can simply be transferred to different stakeholders (e.g. in the context of water or coastal infrastructure) (Eriksen et al., 2021[120]). Similarly, relocating people or communities can adversely affect social cohesion and sense of place. Decisions to adopt new agricultural practices to sustain production can similarly affect cultural values (Adger et al., 2012[135]).

This discussion highlights the importance of carefully grounding approaches to reduce and manage the risks of losses and damages from climate change in the context of an individual country or community. This process must be guided by a good understanding of the drivers that determine the level of economic, institutional and political capacity. This may not always be through climate-related initiatives. Instead, it could embrace approaches that foster broader sustainable developments, such as education, health or economic development.

Further, local knowledge of the risks and approaches to manage them must guide processes. Local actors, including Indigenous groups, have detailed knowledge on weather and climate hazards, the socio-economic context and local experiences of managing past weather- or climate-related events (ILO, 2017[136]). The UNFCCC recognises the role of Indigenous and local groups in the management of climate risks. The Local Communities and Indigenous Peoples Platform aims to facilitate exchange of experiences of different knowledge systems on climate action. It also seeks to enhance engagement of local communities and Indigenous peoples in the climate process (UNFCCC, n.d.[137]). The Africa Adaptation Initiative and the Least Developed Countries Initiative for Effective Adaptation and Resilience (see Box 4.7) are examples of processes owned and led by such groups at the regional level.

Actors are addressing their vulnerability in response to growing impacts from climate change. In most cases, this entails gradual adjustments to current practices. At the national level, examples include changes to land-use management, infrastructure development or sectoral strategies. At the individual or household level, livelihood choices can reduce vulnerability to weather and climate hazards. In Uganda, farmers of sweet potatoes are autonomously adjusting their practices to get the best yields possible. To that end, they are planting sweet potato varieties with shorter maturation periods in response to increasing uncertainty about the onset and cessation of the rainy seasons. In other contexts, more drastic, and in some cases transformative, changes are required.

In northern Kenya, some pastoralists have gone beyond adjustments to make more transformative changes. They have replaced cattle with camels that are better suited to the increasingly hotter climate with less predictable rainfall. Camels require less water, eat a wider variety of vegetation and produce up to six times more milk than local cattle species (Salman et al., 2019[139]; Volpato and King, 2018[140]). Over time, the market for camels and camel milk in Kenya has developed, boosting livelihoods and food security (Elhadi, Nyariki and Wasonga, 2015[141]). Like the Kenyan farmers switching from cattle to camels, some farmers in Costa Rica are switching from coffee to oranges. Oranges are better suited to warmer temperatures, and more profitable than coffee that is subject to increasing global competition. These farmers have also observed that oranges are more resilient to droughts, floods, temperature fluctuations, erratic rainfall and higher winds (Tye and Grinspan, 2020[142]).

The changes in Kenya and Costa Rica have occurred autonomously and without any government support. They responded to an evaluation of the suitability of new approaches to different climate futures. For such transformations to be sustainable, however, policy makers must play a more active role in working with the scientific, local and Indigenous communities. Together, they need to identify opportunities for action and develop policies and plans that make available information (including climate information), technical assistance (such as extension services) and financial resources supportive of the transition. In some cases, market policies (e.g. agricultural subsidies) will also have to be adjusted. This adjustment would promote climate-resilient products and approaches and support market creation for emerging products, such as camel milk, as needed (Salman et al., 2019[139]; Volpato and King, 2018[140]). Such adjustments, whether technical or financial, will require time to produce the same level of support as existing measures (Tye and Grinspan, 2020[142]). In the short term, mechanisms should enable individuals and private sector actors to better respond to climate hazards. These mechanisms could include, for example, clear strategic policy guidelines and support mechanisms aligned with those objectives.

Efforts by different stakeholder groups to address the hazard, exposure and vulnerability will be guided by the institutions and governance processes in place. IPCC has identified three ways in which institutions shape and constrain climate policy making and implementation (Somanathan et al., 2014[143]):

  • Institutions, whether with formal rules or informal norms, set incentive structures for economic decision making (e.g. in the context of transport investments or behavioural decisions relevant to efficient energy use).

  • Institutions shape the political context for decision making, empowering some interests while reducing the influence of others (e.g. as reflected in the energy pricing or broader environmental taxing of some countries).

  • Institutions influence how risks are perceived and valued, what risks are prioritised for action, and how they are addressed (i.e. what approaches are included or excluded from consideration and implementation).

Perceptions of climate risks, based on knowledge and previous experience, also guide the prioritisation and management of the risks. They identify which risks are tolerable, which should be addressed, by when and to what extent (Thomas et al., 2018[119]). Approaches to address the components of climate risks therefore are inevitably political, reflecting the diverse and conflicting values and interests of stakeholders. Governments and others in positions of authority may seek to shed light on the risks through policy consultation and co-ordination, research and other means. Individuals and communities will interpret the information and associated guidance mediated by their own perceptions of the risks. These perceptions may not be consistent with wider public concerns (Sudmeier-Rieux et al., 2015[76]). This is equally the case at the global level where countries perceive, experience and respond to global risks, including climate change, in different ways (White and Lawrence, 2020[144]).

Diverging interests and values contribute to delayed climate action. Differences between the economic incentive structures for mitigation action (a global public good) and adaptation (a range of local public goods, common pool resources and private goods) can delay action on climate or lead to inadequate responses. However, diverging interests and values, both nationally and internationally, are also factors. For example, groups with a vested interest in continued fossil fuel consumption have been instrumental in spreading doubt about the credibility of climate science (e.g. through disinformation campaigns).

Growing evidence suggests that climate action does not have to come at the expense of economic development (OECD, 2017[65]; OECD/The World Bank/UN Environment, 2018[145]). However, climate action at the ambitious scale needed to reduce risks of losses and damages will inevitably have winners and losers. At the national level, for example, economic activities may shift towards less fossil-fuel intensive alternatives or to those less vulnerable to weather and climate hazards. Due to this shift, some will lose their jobs, while others will find new opportunities. Similarly, across countries, trade patterns may change as companies seek to reduce their vulnerability to extreme weather events.

A just transition and decent work are becoming political priorities for climate action. Recognising the growing social impacts of climate change policy, decision makers have elevated a just transition of the workforce and the creation of decent work and quality jobs on the political agenda. The preamble to the Paris Agreement, for example, emphasises the “imperative of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities” (UNFCCC, 2015[61]).

Policy makers have at their disposal different tools to make climate risks tangible and inform decision-making processes. Some tools raise awareness among different stakeholders on the nature of the risks and solutions for managing them. Others influence incentive structures for decision-making processes, such as one-off compensation, pricing or subsidies. Still others impose regulatory standards or prohibit certain practices such as land-use management or engineering design standards (Baer, Campiglio and Deyris, 2021[146]). The levers can be activated at different levels of governance and across stakeholder groups. The application of different tools, then, must be guided by transparency, a good understanding of the synergies, trade-offs and feedbacks between them. It must also respect the interaction of climate-related impacts with social, environmental and economic drivers across spatial and temporal scales (OECD, 2021[147]).

Governance arrangements are central to the management of climate risks. Governance arrangements refer broadly to the structures and processes that steer society and the economy towards common objectives (Ansell and Torfing, 2016[148]). They differ across levels (local, national, regional, global) and modes of governance (market, network, hierarchy) (Jordan et al., 2015[149]). In the context of climate change, governance includes an explicit focus on the management of the hazards. In addition, it includes the broader set of structures and processes that shape the socio-economic context determining exposure and vulnerability of people and assets to different type of climate-related hazards.

As a global problem that depends on collective action to limit the increase in hazards, climate change poses challenges for effective international governance. For example, countries face differential risks. They have different national interests and perceptions of the costs and benefits of mitigation action. They also have large differences in political, economic and technological capacity. These issues have contributed to more emphasis on the risk management component of risk governance (Klinke and Renn, 2019[150]). Risk management approaches emphasise the complexity of and the uncertainties inherent in understanding risk. They also stress the ambiguity or different and sometimes divergent interpretations of the risks and their context (Klinke and Renn, 2019[150]).

Two recent approaches reflect a shift in focus from the distinct processes of risk assessment, risk management and risk communication towards the role of institutions and processes that guide and facilitate the management of the risks. The Sendai Framework for Disaster Risk Reduction identifies strengthened disaster risk governance as a priority for effective and efficient management of disaster risks. It “fosters collaboration and partnerships across mechanisms and institutions for the implementation of instruments relevant to disaster risk reduction and sustainable development” (UNDRR, 2015[100]). For its part, the OECD Council Recommendation on the Governance of Critical Risks also recognises the importance of a fundamental shift in risk governance towards a whole of society effort (OECD, 2014[151]). Table 4.4 summarises the recommendations and proposed areas of action outlined in the OECD Council Recommendation (2014[151]).

Adaptive or iterative approaches to governance of risks place emphasis on the importance of associated governance structures and institutional settings facilitating continuous monitoring, evaluation and learning (Klinke and Renn, 2012[152]; OECD, 2021[147]; Folke et al., 2005[153]). This can be informed by lessons learnt from management of previous or similar risks. It can also draw on emerging understanding of the risks and related technologies as they become available (Klinke and Renn, 2012[152]). Such approaches facilitate a continuous process of characterising risks. This will be critical in informing everything from evaluation of the risks to development, implementation and evaluation of approaches to reduce and manage those risks (IRGC, 2017[154]).

Both climate-related hazards and socio-economic contexts are dynamic and non-linear (see Chapter 2). Consequently, risk governance must assess the different processes and outcomes; their interactions (especially of any feedbacks that may amplify or reduce the effectiveness of measures); and any synergies and trade-offs. Such iterative processes can inform continuous adjustments of approaches based on emerging understanding of the risks and lessons learnt. Box 4.8 summarises the approach promoted by the German Federal Ministry for Economic Co-operation and Development in dealing with disaster and climate risks.

An iterative approach requires the engagement and consideration of the perspectives of different stakeholder groups – public, private, formal and informal – including local and Indigenous groups. Each stakeholder contributes in a unique and complementary way to understand the risks, and to reduce and manage them according to its respective capacities and accepted functions (Schweizer and Renn, 2019[156]; IPCC, 2012[74]). Different stakeholders will have different resources and capacities to make their voices heard. Consequently, representation and participation on their own do not result in inclusive outcomes (OECD, 2021[147]). Mechanisms must therefore facilitate exchange of information to guide efforts towards a shared understanding of the risks and approaches to reduce and manage them.

For example, in Chile the establishment of a Roundtable on human mobility, climate change and disasters aims to address a governance gap given the increasing relevance of these issues for the country. The Roundtable engages a diverse set of stakeholders from the public, private, academia and civil society. The institutional arrangement facilitates enhanced understanding of the issues and their interlinkages to inform the development of guidelines for subnational governments.

The cascading and uncertain nature of climate risks means that the stakeholder community may not always be well defined. In some cases, it will cross geo-political jurisdictions (UNDRR, 2019[9]). With mounting risks of losses and damages, stakeholders may increasingly also need to make more radical or transformative changes to reduce hazard, exposure and vulnerability. Given climate change does not affect everyone in the same way, such processes must be guided by a widely-shared and robust public understanding of the risks and acceptance of the need for the proposed actions and approaches (UNDRR, 2021[157]). There will also be a political and ethical imperative for the governance system to manage these processes carefully and transparently. This could include careful assessment of distributional implications in advance. It could also include adoption of appropriate complementary compensation measures that can limit the adverse impact of policy measures and other efforts on peoples’ well-being (OECD, 2019[158]).

Countries are increasingly also recognising the benefits of enhanced collaboration and coherence between climate and disaster risk reduction communities (OECD, 2020[57]; Haque et al., 2018[81]). Policy coherence viewed as a process of co-ordination can occur on a continuum – from the strategic to operational and technical levels (OECD, 2020[57]) (see Box 4.9). While increased coherence can improve efficiency and effectiveness, it can also lead to trade-offs between investing in enhanced coherence and enhancing individual policy processes (Dazé, Terton and Maass, 2018[159]). The theoretical rationale for coherence is not always reflected in practice, suggesting actual or perceived mismatches in processes and institutions. Mismatches can be due to several factors. The different institutional histories of the two approaches have contributed to separate institutional structures and funding mechanisms with different operational timescales. The immediate disaster response, for example, may be short term, whereas long-term perspectives are a key element of climate action (OECD, 2020[57]).

Emerging good practice in different country contexts, including the Philippines and Peru, is to establish high-level co-ordination. Such an approach should have the support of political leaders to reach a common understanding of enhanced coherence and how it can be achieved. In practice, key ministries, such as Finance, should ensure that the allocation of resources reflects the allocation of roles and responsibilities. National governments drive efforts to strengthen policy coherence. However, implementation usually occurs at the sector or local level. At these lower levels, capacity may be more limited and the actors in charge will face competing demands. National-level actors must therefore be aware of the burden that planning, implementing and monitoring such processes can place on different stakeholder groups (OECD, 2020[57]).

The role of norms in informing action, including on climate change, is often overlooked. Norms shape preferences, ideas and expectations; they have the potential to also support the integration of international policies and institutions (Galaz et al., 2017[160]). The precautionary principle, for example, calls for action to prevent serious or irreversible damage before harm can be scientifically demonstrated. For its part, the polluter pays principle argues those who pollute should also bear the costs of abating the pollution and preventing associated damages to humans or the natural environment (Munir, 2013[161]). Both principles have become key elements of international environmental law.

Norms are not static but emerge and diffuse until they are adopted by a critical mass of relevant actors (Galaz et al., 2017[160]). Events or triggers can contribute to changes in norms. At the national level, such a trigger could be a devastating extreme weather event or a series of repeated events with widespread losses and damages. Enhanced scientific understanding could also play this role. While some transitions happen relatively rapidly, others take much longer. The pace of change depends on technological, economic, commercial, political and social factors.

The outlawing of ozone-depleting substances (ODSs) is an example of a relatively rapid transition, facilitated by the ready availability of commercially viable substitutes for ODSs in most uses. The Montreal Protocol, which oversees the phasing out of the production and consumption of ODSs, differs from other international environmental agreements. Targets and timelines are complemented with mechanisms that limit incentives for countries to free ride through, for example, trade restrictions (Barrett, 2003[162]). In contrast, institutional inertia in phasing out fossil fuel-based power generation in contexts where the technology has matured and cleaner alternatives are cost competitive illustrates how technological maturity on its own is not enough for transitions to happen. Larger political economy issues may still dominate. In such cases, an explicit focus on the barriers for transition may be needed.

So-called norm entrepreneurs – academics, legal scholars and local and religious leaders to name a few – can help diffuse new norms by identifying the implications of different choices (Otto et al., 2020[163]). For example, with the publication of the encyclical Laudato si, Pope Francis used his role within the Catholic Church to highlight the moral imperative for all actors to act on climate change and the ethical implications of failing to do so.

In recent years, young people (individually and collectively) have played a critical role in bringing climate change to the attention of the broader public. They have called on governments to act in accordance with available science, while also highlighting the implications of individual consumption and lifestyle choices (Otto et al., 2020[163]). Over the coming years, members of the youth movement will have the opportunity to engage more directly in the political process, with the potential of bringing about radical change. This points to the important role of education, science and critical thinking in shaping norms. In addition, it highlights the importance of creating institutional structures that give youth and future generations status within policy processes. The Welsh Well-being of Future Generations Act, for example, resulted in the creation of a Future Generations Commissioner.

Time will tell what impact such norm entrepreneurs will have on climate action. However, government officials are increasingly realising the importance of addressing public concerns about the climate. The elections in Australia in 2019 (Colvin and Jotzo, 2021[164]) and Germany in 2017, for example, saw a broader spectrum of political parties include climate change in their programmes.

Public engagement has also contributed to citizens taking governments or corporations to court for failing to take adequate climate action. Plaintiffs have globally brought over 1 500 climate-related lawsuits, with the numbers rising. In most cases, they seek compensation for climate-related losses to compel governments or corporations to take more ambitious climate action (Setzer and Byrnes, 2020[165]). While most claims to date have been unsuccessful, others – such as in Germany and the Netherlands – have influenced change:

  • In April 2021, a German court ordered the government to rewrite the climate law. The court ruled that too much of the burden to cut emissions was placed on future generations (LSE, n.d.[166]). In response, the government of Germany adopted an amended Climate Change Act. It includes commitments to reduce GHG emissions by 65% compared to 1990 by 2030 (instead of 55%) and by 88% by 2040 (no prior goal). It also revised the target date for climate neutrality from 2050 to 2045.

  • In May 2021, a Dutch court ordered Shell and its suppliers to cut emissions by 45% by 2030 from 2019 levels. The plaintiffs, representing over 17 000 Dutch citizens, argued that Shell’s planned emissions reductions of 20% by 2030 violated human rights by fuelling climate crisis (LSE, n.d.[166]). This was the first time a court ordered a large corporation to increase its mitigation efforts. It sets a precedent, giving the public a tool to influence policy outcomes and corporate behaviour (Toussaint, 2020[167]; UNEP, 2021[168]).

In 2020, conversely, the UN Human Rights Committee dismissed a claim by a Kiribati citizen who had argued the effects of climate change displaced the people of Kiribati. The committee ruled that given the rate of SLR, the Republic of Kiribati, with help from the international community, can take “affirmative measures to protect and, where necessary, relocate its population” (UN Human Rights Committee, 2020[169]).

A review of 73 climate-related lawsuits found the evidence submitted often lags behind the state-of-the-art in climate science and that methodologies such as attribution science could inform future cases (Stuart-Smith et al., 2021[170]) (see Chapter 3).

Leadership and partnership are also important in informing change. Partnerships between the scientific and policy communities, for example, can help ensure that science informs approaches to reducing and managing climate risks. It is important to ensure that such partnerships are inclusive to different types of knowledge, including local and Indigenous knowledge. In this way, they can contribute towards a better understanding of the risks and help identify solutions considered legitimate by stakeholders (Cornforth, Petty and Walker, 2021[47]; UNDRR, 2021[157]).

The presence of trust among stakeholders determines whether such partnerships can bring about change. Some argue that stakeholders need to trust that effective public policy will be based on respect in preserving human dignity (Ascher, 2017[171]). Others suggest collaboration will be guided by a diversity of trust processes with affinitive trust playing a central role in the context of climate change (UNDRR, 2021[157]; Coleman and Stern, 2017[172]):

  • rational trust, based on expected benefits and risks

  • procedural trust, in fairness and integrity of the procedures involved

  • affinitive trust, shaped by emotions, charisma, shared identities or feelings but not always longer-term interactions

  • dispositional trust, signalling one’s predisposition to trust another entity.

With the devastating impacts from climate change becoming increasingly apparent around the world, the emphasis on global solidarity has risen on the political agenda. This has already been written into the international climate process. Examples include: the goal of Paris Agreement to pursue efforts to limit the temperature increase to a range of well-below 2°C and towards 1.5°C above pre-industrial levels; the emphasis on common but differentiated responsibilities that underpins countries’ Nationally Determined Contributions; and the requirement that developed countries provide finance and other means of implementation (technology and capacity development support) and lead efforts to reduce emissions. These goals, principles and responsibilities all reflect a sense of international solidarity. They articulate a conviction that collective action to reduce and manage the risks and impacts of climate change benefits all. An emphasis on solidarity in guiding climate action has also risen in the context of the humanitarian community facing increasing pressure to support countries experiencing direct losses and damages from climate change.

This section explores the implications of SLR on decision-making processes and policy priorities in SIDS. It builds on the discussion in Chapter 3 that outlines the impact of SLR on SIDS, as well as on the preceding sections of this chapter. Chapter 3 highlighted that all SIDS are vulnerable to climate change irrespective of their diversity. This is especially true of SLR because the habitable areas are limited to the low-lying coastal zone. SIDS are also disproportionally affected by extreme weather events due to their geographic locations. With relatively undiversified economies and limited natural resources, SIDS risk extensive losses and damages from SLR.

The section first discusses the different types of responses to SLR and their relative strengths and weaknesses (Section 4.5.1). This is complemented with a discussion of potential policy priorities and decision-making processes for addressing SLR in SIDS (Section 4.5.2).

There is no silver bullet to reducing and managing the risk of SLR and associated changes in extreme sea levels, coastal flood hazard, coastal erosion hazard, loss of ecosystems and freshwater resources. There are diverse responses to SLR, each with its strengths and weaknesses. It is therefore useful to consider their complementary roles in an integrated response to SLR. Four fundamentally different types of responses have been identified (Nicholls et al., 2007[173]; Oppenheimer et al., 2019[132]; Wong et al., 2014[174]), each briefly described below. The responses complement the discussion on approaches to address the drivers of exposure and vulnerability to hazards discussed in Section 4.3.

Protection reduces the chances of coastal hazards (SLR, surges, waves) propagating inland and causing damages to people, their livelihoods and built environment. Protection can be delivered in three ways:

  • Hard engineering structures, such as dykes, seawalls and breakwaters, can be built.

  • Sediment-based measures can replace eroded sand to nourish beaches and shores.

  • NbS can use coastal ecosystems such as reefs, mangroves and salt marshes as buffers.

In this way, NbS can attenuate extreme sea levels (surges, waves); reduce rates of erosion; and raise elevation or create new land by trapping sediments and building-up organic matter and detritus (Pontee et al., 2016[175]; Spalding et al., 2013[176]; Temmerman et al., 2013[177]). The use of seawalls – as one hard coastal protection structure – is widespread in SIDS. These are vertical walls built along the coastline to prevent flooding and erosion (Betzold and Mohamed, 2016[178]).

Advance also aims at preventing the coastal hazard from propagating inland but this time by building new land seawards and upwards. For SIDS, this means reclamation of new land or new islands at higher elevation levels. Land reclamation is widely practised around coastal cities where land is scarce and valuable, including on SIDS. Newly reclaimed land is, however, not necessarily elevated. This may even constitute maladaptation by increasing the exposure to coastal hazards. Globally, about 34 000 km2 of land has been gained from the sea during the last 30 years. The biggest gains are in places like Dubai, Singapore and China (Donchyts et al., 2016[179]; Martín-Antón et al., 2016[180]). The global area of atoll islands has increased by 62 km² from 2000-20, which is roughly twice the size of Tuvalu (Holdaway, Ford and Owen, 2021[181]). The largest increase in land areas of SIDS is found in the Maldives (38 km²). On the islands of Hulhumalé, for example, land has been reclaimed on a reef flat next to the capital island of Malé. It reaches an elevation about 60 cm higher than Malé to account for future SLR (Brown et al., 2019[182]).

Accommodation, a third approach, refers to a wide array of measures that reduce the vulnerability of coastal residents, their livelihoods and the built environment. As such, it does not prevent coastal hazards from propagating inland. Documented accommodation measures for SIDS include the strengthening and elevation of houses, installation and upgrade of water storage, preservation of food for disasters, a switch to different salinity-tolerant crops, capacity building and awareness raising (Klöck and Nunn, 2019[183]; Mycoo and Donovan, 2018[184]).

Retreat, the fourth response, reduces or eliminates exposure by moving people, infrastructures and human activities out of the coastal risk zone (Hino, Field and Mach, 2017[185]). In Europe and the United States, retreat is often considered to be a coastal adaptation measure. The land retreated acts as a buffer zone attenuating extreme sea levels and, hence, reducing flood risk for the hinterland (Rupp-Armstrong and Nicholls, 2007[186]). Conversely, the literature on SIDS, as summarised in the IPCC Special Report on the Oceans and the Cryosphere, generally views retreat as loss and damage rather than adaptation. This is because retreat means to give up scarce land or even to abandon entire islands (Oppenheimer et al., 2019[132]). Given the vulnerability of SIDS to disasters, as discussed in Chapter 3, many cases of abandoning islands are documented, including in response to disasters that are not climate-related. Examples include disasters caused by extreme sea levels, such as after the 2004 Indian Ocean tsunami in the Maldives (Gussmann and Hinkel, 2020[187]), volcanic eruptions, such as in Manam in Papua New Guinea (Kelman, 2015[188]), or tectonic land subsidence, such as in northern Vanuatu (Ballu et al., 2011[189]).

All four biophysical response measures are combined with, or initiated through, institutional arrangements that prescribe, recommend or incentivise certain measures (see Section 4.4). Such arrangements have not been the focus of much research on SIDS. Documented institutional responses in SIDS include restriction of access and resource use; efforts to mainstream climate change considerations into national plans and insurance; building codes for flood proofing houses; monetary incentives for risk transfer (e.g. subsidised insurance); or information provision through flood EWS (Klöck and Nunn, 2019[183]; Leal Filho et al., 2021[190]; Robinson, 2020[191]; Mycoo and Donovan, 2018[184]).

Further, research on the risk management experiences of SIDS is far from comprehensive. Recent systematic reviews highlight a focus of the literature on only a small number of SIDS. Pacific SIDS have received the most attention. Research has thereby focused on the main islands at the expense of remote and rural islands (Klöck and Nunn, 2019[183]). Generally, the focus has either been on hard measures or behavioural change. Most responses have been documented as reactive (i.e. after a disaster has occurred). They focus on current extremes rather than future climate change (Klöck and Nunn, 2019[183]). Generally, there is a lack of studies that have evaluated the effectiveness of these responses in SIDS (Gussmann and Hinkel, 2021[192]; Klöck and Nunn, 2019[183]).

The question of hard engineering versus soft NbS to protect coasts from extreme sea-level events and SLR has provoked much discussion. Scientific and grey literature often advocates NbS as the solution to coastal adaptation. Conversely, it portrays hard protection measures such as seawalls to be bad, incremental and unsustainable. This is not a useful distinction. Both play complementary roles, and are often combined in so-called hybrid approaches (OECD, 2020[106]).

Hard protection has both strengths and weaknesses. One strength is the need for less space. They are also more reliable and predictable for flood security than many NbS, which vary more over time and space depending on the context (Narayan et al., 2016[193]; Pinsky, Guannel and Arkema, 2013[194]; Quataert et al., 2015[195]). As one weakness, hard protection, in particular on coral islands, interrupts the natural sediment transport from coral reefs onto island shores and surfaces that protect the islands from flooding and erosion in the first place.

NbS provide co-benefits beyond coastal protection such as carbon sequestration, improved water quality, biodiversity, fisheries and other resources (Oppenheimer et al., 2019[132]) (see Box 4.5). Furthermore, NbS can autonomously maintain their effectiveness by naturally adapting to rising sea levels. They can do this through raising land and migrating inland, provided sufficient sediment and inland space is available. In addition, some NbS have been demonstrated to be cheaper than hard measures. Ferrario et al. (2014[196]), for example, found the costs of restoring reefs significantly lower than building artificial breakwaters.

However, many comparisons between the two approaches ignore the opportunity cost of NbS. Opportunity costs of NbS are generally higher, at least in the short term. They often need a lot of space that could be developed into profitable usages of land. In fact, mangrove forests are being destroyed at alarming rates of 4-9% per year (Duarte et al., 2008[197]) primarily because conversion of mangroves into agriculture, shrimp farming or industrial usages is profitable in private terms in the short term (Li et al., 2013[198]).

These strengths and weaknesses mean that different approaches apply in different contexts. For urban and densely populated areas, hard protection has played a central role, and will continue to do so. Many cities around the world, including in SIDS, are protected by hard infrastructure. If there is limited space and large human values are at risk, the continuation of hard protection makes a lot of sense. Even under 21st century high-end SLR, hard protection is highly cost-efficient for cities and densely populated areas (Hallegatte et al., 2013[199]; Lincke and Hinkel, 2021[129]; Tiggeloven et al., 2020[200]). Conversely, rural and sparsely populated islands have more land available and hence may greatly benefit from a focus on NbS.

For coral SIDS, NbS may be favoured for those islands that still have the natural capacity to grow with SLR. These are islands where the natural patterns of sediment production and transport are functioning (see Chapter 3). Introducing hard measures in these environments would ultimately destroy these natural mechanisms, locking the islands into hard development pathways (Duvat and Magnan, 2019[201]). However, NbS may not be recommended for all islands. Islands already heavily modified by humans are nearly impossible to return to their natural morph dynamics. This includes the main and capital islands of many coral SIDS, such as Malé in the Maldives or Vaiaku/Funafuti of Tuvalu. Here, hard protection measures play an important role. However, even urban islands need to maintain a healthy and functioning reef to grow upwards with SLR. These reefs reduce wave energy and heights, making it more affordable and technically much easier to protect the islands against SLR.

As a general weakness, protection always leaves a residual risk. Both soft and hard protection may fail. Furthermore, extreme sea-level events can exceed protection standards. For that reason, flood damage cannot be completely excluded. In addition, if flood defences are raised with rising SLR, the risk of extreme disasters increases. In the case of defence failure damages will be large due to deep floodplain behind the defence (Hallegatte et al., 2013[199]). The risk of failure can be reduced to almost zero through wide flood defences known as unbreachable dykes (De Bruijn, Klijn and Knoeff, 2013[202]). However, these require a lot of space generally not available for SIDS.

The advance approach offers several strengths. Residual risks can be partially avoided through advance, if newly constructed islands are reclaimed at a sufficiently high level. Under moderate to high SLR, for example, the Maldivian island of Hulhumalé can avoid wave-induced flooding until the end of the century (Brown et al., 2019[182]). As another strength, advance creates new land, which is generally scarce in SIDS. For urban SIDS, advance can help overcome financing barriers. High, up-front investments in the creation of new, better protected land can be recuperated within a few years through real-estate revenues generated from newly created land (Bisaro et al., 2019[203]). The return on investment on such urban advance is shorter and less risky compared to investments in normal coastal protection. This makes it easier to attract finance for advance. Advance also has weaknesses. These include negative environmental externalities and the interruption of natural sediment dynamics, which generally leads to erosion either on the newly created land or in adjacent localities. In atoll islands, new land is often created on the reef flat, which reduces or eliminates its ability to attenuate waves.

With sufficiently high ground available, retreat can avoid residual risks. However, retreat is generally socially and politically contested for several reasons. First, there are vested coastal interests, including tourism and real estate sectors. Second, it raises difficult questions around equity and compensation. Third, there are frequent adverse outcomes, including disruption of livelihoods, loss of culture and identity, and psychological harm (Hauer et al., 2019[130]; Siders, Hino and Mach, 2019[204]).

This section presents six complementary policy priorities and decision-making processes that can be considered for addressing SLR in SIDS. It builds on discussions in both this chapter and Chapter 3.

At the international level, the most important policy priority is mitigation of GHG emissions. Only stringent mitigation can reduce the risk of multiple metres of SLR and its catastrophic consequences on SIDS. SIDS may have more capacity to respond to SLR than often suggested in the media. However, unmitigated climate change and SLR threatens the survival of many SIDS. This is especially true for coral islands with elevations of only 2-3 metres above mean sea levels. These SIDS face the threat of higher and more energetic waves directly hitting the coast and over washing the islands because their natural protection through coral reefs is lost through ocean warming.

A second international policy priority is the need to support SIDS in meeting the cost of adaptation and reconstruction of lifeline infrastructure, assets and livelihoods. No matter the level of mitigation, sea levels will continue to rise, even if the temperature goal of the Paris Agreement is met. This is due to the delayed response of the ocean to global warming (Church et al., 2013[205]; Oppenheimer et al., 2019[132]). Even low-end SLR requires substantial investments in adaptation on SIDS and the risk of losses and damages will grow. Extreme sea levels and other natural hazards impact large fractions of the GDP of many SIDS. This means they have low capacity to finance adaptation and other activities to reduce and manage the risk of losses and damages. Consequently, international efforts to support SIDS are needed (Klöck and Nunn, 2019[183]; OECD, 2018[206]) (see Chapter 5).

From national to local levels, one immediate and generally recognised policy priority is the implementation of no- or low-regret measures. Although their meaning depends on context, no- or low-regret measures include some accommodation and disaster preparedness measures such as emergency planning and EWS. On the plus side, these accommodation measures produce almost immediate net benefits. Multi-hazard EWS have one of the highest benefit-cost ratios. However, these measures alone are only effective for current conditions and small rises in sea level. Hence, they eventually need to be combined, upgraded or replaced with other responses such as coastal protection.

Another low-regret measure is the consideration retreating from individual islands in an archipelago SIDS. Although it is generally disturbing to think of retreat as a no or low regret option, and recognising that what is considered “low regret” will vary across stakeholder groups, there are instances in which retreat may be considered as such. One instance may be in the aftermath of a coastal disaster where reconstruction of livelihoods in their original situation may cost as much as relocation to another island. Experiences after the 2004 Indian Ocean tsunami in the Maldives also show that the affected population may support a retreat under such circumstances (Gussmann and Hinkel, 2020[187]). Relocation may also cause relatively low regret when islands already have small and declining populations. In these cases, people are migrating to seek opportunities in the centre islands of archipelagos (Speelman, Nicholls and Dyke, 2016[207]). In both instances, relocating and concentrating population on fewer islands can bring both development and adaptation benefits; government services and coastal adaptation can be provided more efficiently to a population concentrated on a fewer number of islands.

Finally, some low-regret adaptation measures result from SLR and climate impacts being co-determined by non-climate, local drivers that can be addressed to reduce current and future climate risks. Natural sediment supply and transport processes can be maintained to reduce erosion impacts. Water pollution and tourism activities can be reduced to preserve coral reefs and reduce wave impacts. Mangroves can be preserved to reduce both surge and wave impacts. Finally, sufficient accommodation space can be maintained for mangroves to migrate inland with SLR (Duvat and Magnan, 2019[201]; McLean and Kench, 2015[208]) (see also Chapter 3).

Given the large uncertainty about SLR, it is important to keep future options open (Hallegatte, 2009[209]; Hinkel et al., 2019[210]). Long-term decisions that can wait, for example, can be postponed. Many retreat decisions for urban areas in SIDS fall under this category (Oppenheimer et al., 2019[132]). SLR may rise by multiple metres, posing existential threats to SIDS. However, there is also a substantial chance that SLR may stay below 40 cm by 2100 (50th percentile of RCP2.6) if the temperature goals of the Paris Agreement are met. Adapting to the latter amount of SLR is technically feasible in most places and also economically efficient in densely populated and urban areas. Hence, a meaningful strategy for urban areas may be to wait and observe how SLR observations and projections develop over the next decades. This could provide a better basis for an existential decision such as retreat (Hinkel et al., 2019[210]). Such waiting should, however, accompany the two priorities of contingency planning and iterative policy cycles.

Another way of keeping future options open is through flexible options that can be upgraded or changed once more is known about future SLR (see also Section 4.2). This is generally an argument for implementing NbS, including sediment-based measures instead of hard measures. NbS can, to some extent, self-adjust to future SLR. Sediment-based measures provide the flexibility to increase protection by applying more sand as the consequences of SLR unfold. Flexibility can also be built into hard infrastructure. Germany, for example, builds coastal dykes with a wider crest than necessary. This allows dykes to be raised further at low costs if SLR turns out to be higher than anticipated (MELUR-SH, 2012[211]).

Many long-term decisions must be made today. Given the coastal nature of SIDS, many of these decisions are related to SLR. This includes long-term decisions on critical infrastructure, coastal protection, land-use planning and land reclamation, which can have time horizons of decades to over a century. Many of the urban centres of SIDS, for example, face high population pressures and an associated shortage of land for housing. This needs to be addressed today, and is frequently done by creating new land or islands. Long-term decisions are also needed around spatial planning. It might be beneficial, for example, to decide immediately which areas or islands should be further developed and which should be left undisturbed. This would allow the natural processes, which enable islands to self-adjust to SLR, to prevail.

Factoring in SLR into such decisions is beneficial, but the crucial question is how much SLR to consider. Sea-level science can only give a partial answer. The other part depends on the uncertainty preferences of the stakeholders. Box 3.2 (Chapter 3) highlights decision-making processes related to tolerance of risk and uncertainty. When stakeholders are uncertainty-tolerant and the value at risk is relatively low, the IPCC likely ranges provide a good basis for decision making (Oppenheimer et al., 2019[132]). If stakeholders are less tolerant towards uncertainties, then high-end SLR should also be considered. In these cases, there remains a 17% chance that SLR will be above the likely range of the IPCC scenarios. In many urban contexts where number of people and assets exposed to SLR and extreme sea levels is high, people are highly intolerant towards uncertainty. In this case, decision making should consider high-end SLR futures (Hinkel et al., 2019[210]).

Another priority is to set up iterative policy cycles for decisions and policies to respond to the extent of changes, together with supportive monitoring systems. This corresponds to “adaptive policy making” or “adaptive planning”, which respond to decision making under uncertainty and ambiguity (Walker, Haasnoot and Kwakkel, 2013[212]; Walker, Rahman and Cave, 2001[213]), as found in the context of SLR (also discussed in Section 4.2). Essentially, such adaptive approaches implement low-regret options and flexible measures today. They then monitor SLR, extreme sea levels and other decision-relevant variables so they can identify when in the future decisions and new policies must be taken. Importantly, a monitoring strategy should help identify needed shifts in policy early enough to allow sufficient time for planning and implementation before negative impacts occur (Hermans, et al., 2017).

Contingency planning, the final policy priority, goes along with keeping future options open and adaptive. It explores what kind of responses are available and how these could be sequenced in the worst case scenario of high-end SLR. If SLR does follow a worst case trajectory, there may be a future moment in time after which there will not be sufficient time to plan and implement some responses, as these may take decades to plan and implement (Haasnoot et al., 2020[214]). In the context of SIDS, contingency plans include large-scale retreat responses. Retreating whole island states involves many difficult ethical, political, technical, humanitarian and legal aspects (Kelman, 2015[188]; Yamamoto and Esteban, 2014[215]). While many SIDS recognise the possible long-term existential threat of SLR, few countries have so far engaged in contingency planning (Thomas and Benjamin, 2018[216]). In 2014, former president of Kiribati, Anote Tong, initiated a long-term contingency plan to buy land on Fiji for relocating Kiribati’s people. However, the plan was later undone by the new president (Kupferberg, 2021[217]).

An inexpensive tool for contingency planning is adaptation pathway analysis (Haasnoot et al., 2013[32]; Haasnoot et al., 2012[218]). This process has gained popularity in coastal contexts with prominent applications for London (Ranger, Reeder and Lowe, 2013[219]), the Netherlands (Haasnoot et al., 2020[214]) and Bangladesh (Government of Bangladesh, 2018[35]) (see also Box 4.2). However, there have been few applications in SIDS. As one possible outcome, the exercise may find that nothing needs to be done now. Instead, it could identify critical decisions to be taken once a certain level of SLR has occurred.

As sea levels continue to rise over the next decades, the policy priorities listed above will change. raising the critical question of if and when SIDS’ adaptive capacities will be overwhelmed and they need to switch from a policy mix that combines protect, advance and accommodate to a retreat. Small-scale retreat may play a role in certain circumstances as a low-regret measure today. Large-scale retreat should be considered in contingency planning, but it will in most cases be too early to implement it. However, if sea levels continue to rise unabated, SIDS will eventually need to switch to a large-scale retreat policy (Kelman, 2015[188]).

Efforts to pin down when adaptation limits will be reached or to identify a specific level of SLR have been elusive (Leal Filho et al., 2021[190]; Nurse et al., 2014[220]; Oppenheimer et al., 2019[132]). Some work has conjectured concrete limits, including that most atolls will be uninhabitable by the mid-21st century (Storlazzi et al., 2018[221]). However, these projections have not considered human adaptation responses. Hence, they do not provide a comprehensive assessment. Conversely, assessments that include human dimensions and adaptation have not estimated absolute limits of adaptation in the context of SLR in SIDS (Oppenheimer et al., 2019[132]).

One conclusion that can, however, be drawn is that social, economic and financial limits to adaptation may be reached (long) before technical adaptation limits arise (Hinkel et al., 2018[222]). In principle, there are many technical options available for adapting even to 21st century high-end SLR. These include island raising and construction (Yamamoto and Esteban, 2014[215]); artificial breakwaters substituting the lost protective effects of corals, salt water desalination or import of potable water (Falkland and White, 2020[223]); or even floating islands (Marris, 2017[224]). Implementing these options at significant scales is costly and it is unlikely that SIDS can mobilise and access sufficient domestic and international funds and finance for this (Hinkel et al., 2018[222]; Oppenheimer et al., 2019[132]). Even if SIDS could afford the transformation to such radically different and completely engineered living environments, much of the rich cultural diversity and heritage tied to the natural environment of SIDS would be lost.


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