Adaptation and the Private Sector

By Pieter Pauw

The issue of private sector adaptation and adaptation finance is hotly debated by researchers, climate negotiators, business and civil society alike, with a growing number of publications on the topic, including my ‘not a panacea’ paper in Climate Policy. The data collection for this paper was done in 2012; the final manuscript was submitted in May 2014. What have we learned since? One lacuna of the paper: private maladaptation is not considered well enough.

Adaptation was long seen as a public and secondary response after mitigation. In recent years, however, increasing emphasis has been put on adaptation and the roles of the private sector in its implementation and financing. This is clearly linked to the UNFCCC negotiations. For example, at the COP in 2006, the Secretary General of the United Nations stated that ‘Changes in corporate behaviour, and in the way private investment is directed, will prove at least as significant in winning the climate battle as direct Government action’. At the Copenhagen COP in 2009, the private sector was mentioned as one of the sources of the annual USD 100 billion of climate finance that developed countries pledged to mobilize from 2020 onwards to support developing countries in adaptation and mitigation efforts.

Research followed swiftly. A rapidly growing body of (grey) literature is being produced on the role of the private sector in adaptation and adaptation finance. Most studies provide theories on motivations and potentials, and many showcase successful projects across the world. However, at a more aggregated level, there is no studies providing empirical evidence on the real potential of private adaptation.

My paper in Climate Policy did become more practical – it focuses on one sector (agriculture) in one country (Zambia). I did not just interview the private sector on their adaptation actions, but policy makers, researchers and civil society too. Yet the paper is not empirical either, as it does not assess actual private adaptation interventions on the ground on their effectiveness.

What the paper does make clear is the difference between private action and investments that constitute adaptation, and those that only contribute to it. This differentiation is particularly important in the context of climate finance. Private interventions that constitute adaptation would include only private interventions that specifically aim at adaptation. In principle, such interventions could, if mobilised by developed countries, be counted as part of the annual USD 100 billion of climate finance. However, such interventions were found to be minimal or nonexistent in Zambia.

The paper did however find many private interventions that could contribute to adaptation. In fact, the private sector might sometimes contribute to adaptation without being aware of it, for example when increasing resilience by investing in more efficient irrigation technology. The potential of the domestic private sector is particularly large, both by mainstreaming climate risks in operations (e.g. conservation farming; irrigation) and in capitalizing on new opportunities (e.g. marketing of harvests and farming equipment; development of improved seeds). Examples of potential international private sector contributions to adaptation include corporate social responsibility investments in reforestation and investments in sustainable water management.

The paper does mention the risks of such a ‘contributions’ approach to adaptation. It might advance business-as usual activities rather than innovation. Indeed in the past, a broad approach to adaptation was used by development actors who used adaptation language to garner funding to suit their ends, even when they felt their work was unrelated to adaptation (Ireland, 2012). Clearly, this risk also exists for private adaptation interventions. It should be prevented that business misuse a broad definition of adaptation for greenwashing of BAU activities. It would be even worse, if the private sector would attract public climate finance for such BAU activities, or if developed country governments account such activities as adaptation of ‘their’ multinationals as part of the country’s national contribution to international climate finance.

Now that the paper is published, I realise that even this ‘mentioning of risks’ still argues from the perspective that the net private contribution to adaptation is positive. The paper’s lacuna is that private action and investments potentially cause maladaptation. This word is actually only mentioned twice in the study, and it only provides one (hypothetical!) example explicitly.

This is a consequence of the method used. I asked respondents for examples of private adaptation and adaptation finance, because this is what global climate policy asks for. A similar study with the opposite aim –asking respondents about private maladaptation- would be as useful a contribution to our insights in private adaptation.

The IPCC in its fifth Assessment Report slightly changed its definition of maladaptation. It now recognizes that it does not only arise from badly planned adaptation actions, but also from deliberate decisions where wider considerations place greater emphasis on short-term outcomes rather than longer-term threats, or from decisions that discount, or fail to consider, the full range of interactions arising from the planned action. In this context, maladaptation by the private sector in agriculture could put private actors, local communities, and the entire region at risk, for example when irrigation systems to increase resilience actually deplete water resources; when large-scale monocropping goes at the expense of a higher diversity of crops and varieties that can withstand different climatic conditions; when peatland conversion causes methane emissions; or when crops are grown in highly exposed areas such as slopes and river beds.

The discussion on private adaptation has matured over the last couple of years. It becomes clear that private adaptation is both crucial and possible. New research is needed in two directions. First, empirical evidence needs to show what the actual potential is in different countries and sectors. Second, insights are needed into the potential of private maladaptation, and how to prevent it.

Reflections on “Not a panacea: private-sector engagement in adaptation and adaptation finance in developing countries”, by Pieter Pauw, published in Climate Policy, Vol. 15, issue 5.

About the author

Pieter Pauw – researcher at the German Development Institute/Deutsches Institut für Entwicklungspolitik and PhD candidate at the Institute for Environmental Studies (IVM, VU University). Twitter: @wp_pauw

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