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Adaptive Policymaking for Agriculture, Water Resources and Climate Change. Designing Policies that can Adapt to a World of Uncertainty, Change and Surprise COP 11, Montreal 9 December 2005. Why Study Adaptive Polices?.

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Adaptive policymaking for agriculture water resources and climate change l.jpg

Adaptive Policymakingfor Agriculture, Water Resources and Climate Change

Designing Policies that can Adapt to

a World of Uncertainty, Change and Surprise

COP 11, Montreal

9 December 2005


Why study adaptive polices l.jpg

Why Study Adaptive Polices?


Slide3 l.jpg

  • The world’s poor are most heavily dependant on agro-ecological services, and most vulnerable to deteriorating environmental conditions, worsened but not necessarily created by climate change [IPCC, 2001].

Key point:

critical impacts and vulnerabilities are in agriculture and water resources


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The details are, however, unknowable: global and regional perspectives


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The Need: recent IDRC research [Moench et al, 2003]

  • “When situations are characterized by variability, uncertainty and change, conventional planning scenarios provide little guidance regarding future needs and conditions.”

  • “Specific solutions are less important than the existence of processes and frameworks that enable solutions to be identified and implemented as specific constraints and contexts change.”

    Civil aviation policy of Netherlands: expansion of Schiphol airport

    “If we were able to predict the future accurately, preferred policies could be identified in principle by simply examining the future that would follow from the implementation of each possible policy.”


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Project Research Premise

  • the adaptive capacity and resilience of communities is a critical aspect in the transition to sustainable development…

  • and one of the important factors in building adaptive and resilient communities is for the public policies, which influence the behaviour of communities, to themselves be adaptive and resilient to uncertainty, change and surprise.

Research Hypothesis

Policies and instruments that are adaptive have specific characteristics and mechanisms that make them adaptive

These characteristics and mechanisms are poorly understood at both a practical and theoretical level.


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Project Goal

  • To advance the understanding of adaptive policies and policy instruments to help government agriculture and water resource policymakers at the local, state and federal levels to design adaptive policies – policies that have the following characteristics:

  • Robustness - the ability to be effective under a range of anticipated conditions.

  • Adaptability - the ability of a policy instrument to respond well to unanticipated circumstances and longer-term change.

  • Adapted from Walker, W.E., S.A. Rahman, and J. Cave 2001. Adaptive policies, policy analysis, and policy-making. European Journal of Operational Research 128: 282-289.


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Our Current Conceptual ThinkingRules and Delivery

Policy Implementation

Policy Design

Objective

Setting

Operation

Instrument Rules

Instrument Delivery

Monitoring & Evaluation

Staff Training

Delivery System Development

Instrument

Design

Understanding

the Issue

Monitoring, Evaluation & Improvement

Learning & Improvement

Idealized illustration of policy design and implementation


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Adaptability Via Monitoring, Learning and Improvement

Others’ actions

Unforeseen events

Changing preferences

Stage Setting

Walker et al. (2001)

Assembling a Basic Policy

Reassessment

Certain

Mitigating actions

Vulnerabilities

Triggers

Corrective actions

Hedging actions

Uncertain

Defensive actions

Signposts

from Walker, W.E., S.A. Rahman, and J. Cave 2001. Adaptive policies, policy analysis, and policy-making. European Journal of Operational Research 128: 282-289.


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Adaptability Via Defining CharacteristicsExamples:

  • Ensure that social capital remains intact (Ruitenbeek and Cartier 2001).

  • Create opportunity for self-organisation and build networks of reciprocal interaction that foster trust and cooperation (Berkes et al. 2003; Glouberman et al. 2003; Axelrod and Cohen 2000)

  • Promote variation and redundancy (Berkes et al.; Glouberman et al.)

  • Combine experiential and experimental knowledge (Berkes et al.)


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Insights from Case Study Research – Canada’s Crow Rate

War Measures Act Suspends Crow Rates

Crow Rates Restored for Grain and Flour

Western Grain Transportation Act terminated

Manitoba Government Requests Change:

Crow Rtes put into Railway Act as “statutory grain rates”

Crow Rates terminated and replaced with Western Grain Transportation Act

Crow Rates extended to westbound export grain shipped to west coast

Temporary maximum freight rate period ends

All producer payments completed

Crow’s Nest Pass Act

Crow Rates extended to rapeseed and flaxseed.

1897

1903

1919

1922

1925

1927

1946

1961

2001

1984

1996

Period of revenue loss for railways sparks a chain of studies to understand the issue

Lower than anticipated inflation since

Inflationary period due to pressures of First World War

War time price controls lifted

Substantial drop in grain prices

Sources: Excerpts from Rothstein (1989); Earl (1996); Schmitz et al. 2002)


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Insights from Case Study Research – Canada’s Crow Rate

High Flexibility

1984-1996

Robustness

(capability to deal with a range of circumstances through discretion)

1897-1925

1925-1984

Low Flexibility

Adaptability

(the capability to recognize a significant change in conditions, interpret and learn from the information, and make necessary changes)


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India Case Study Research – Background

  • Vulnerability of Indian agriculture to climate change

  • Poor insurance penetration

  • - informal sector excluded

  • Rural credit – indebtedness – poverty

Variation during 1960-82 of (a) rice yield over the Indian region (b) total food grain production (c) all-India rainfall (Source: Gadgil 1996)


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Insights from India case study research: Evolution of crop insurance

Farm income insurance scheme

National agriculture insurance scheme

Comprehensive crop insurance scheme

Higher premiums (subsidy for small farmers to be phased out)

Option of higher risk for higher premium

Extended to non-loanee farmers

Commercial crops included

For wheat and paddy

To replace NAIS

Pilot crop insurance scheme

Insurance linked to short-term credit

2% premium, subsidy for small farmers

Basic rainfed foodgrains covered

Weather indexed insurance

Experimental crop insurance scheme

Experimental individual scheme

Very poor coverage of farmers

Very low premium to claims ratio

MFIs, SHGs, village internet kiosks

Coverage and financial viability still an issue

1972

1984

1985

1978

1991

2004

1997/8

1999

2001

2003

1979

IRDA Act

Entry of private and foreign players

Economic reforms

Green Revolution

High level task force

AIC takes over from GIC

Working group for Xth Plan


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Insights from India case study research

  • Crop insurance robust by definition: helps deal with range of weather conditions

  • Problems: coverage, financial viability, adverse selection

  • Long delays in payment of claims

  • Small and marginal farmers lose out

  • Weather indexed insurance MORE robust

  • Minimizes adverse selection

  • No need to draw up and monitor individual contracts

  • Protects overall income rather than yield of specific crop

  • Improves farmers’ risk profile and access to bank credit

  • Quick payouts can improve recovery times

  • Important role for micro finance institutions

  • Need for institutional backing

  • Adaptability

  • Periodic review and improvement of crop insurance

  • Weather insurance learning from pilot schemes


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Future Activities

  • Community-level research

    • Conducted in India by TERI and Canada by IISD

    • To identify the characteristics and mechanisms of policy instruments that can adapt to surprises and longer-term changes

    • Synthesis Paper No.1 (available April 2006).


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Project Website and Contact Information

  • www.iisd.org/climate/canada/adaptive_policy.asp

  • Preety Bhandari

  • The Energy and Resources Institute

  • [email protected]

  • Stephan Barg

  • International Institute for Sustainable Development [email protected]


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