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Agrica SV GIZ Climate Project

Context and objective

While many countries recognize adaptation as an important component of their climate change efforts, little guidance on how to operationalize these adaptation goals exists. As part of their international commitments such as under the Paris Agreement, countries globally have embarked on the process of developing and formulating implementation and investment plans for their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs). However, to date especially developing countries often lack comprehensive analyses of their projected climate risks. A thorough assessment and quantification of those risks is important to generate a profound information base for developing effective investment strategies for climate change adaptation.

A better understanding of projected climate impacts and of possible benefits of adaptation and risk transfer solutions has the potential to guide, incentivize and accelerate public and private sector investments for a climate resilient transformation. Yet, there is a lack not only of risk and impact assessments, but also of accessible tools to assess costs and benefits of dedicated adaptation options. This can inhibit countries to gain access to local and international climate finance, which is crucial for implementing their adaptation strategies.

With this project, PIK works to fill this gap by providing in-depth climate risk analyses combining climate change impact assessments with recommendations for action in two countries in Sub-Sahara Africa: Ghana and Ethiopia. Following a comprehensive impact assessment focusing on agricultural production, different adaptation strategies are evaluated by means of a cost-benefit analysis and a feasibility assessment for each country. The results are then used to inform and support government and private sector stakeholders in effectively prioritizing and designing their adaptation investments. While the main focus of analysis lies on the agriculture sector, linkages with other key sectors such as water, energy, health and migration are also considered. In addition, country risk profiles are developed for the two case study countries, as well as for selected additional countries. For those country profiles, the exposure of different sectors to climate change for the country is assessed, to understand impacts and potential costs of climate change for the full economy. These case studies are then placed in the overall context of Sub-Sahara Africa, for which climate risks and ways forward towards resilient, climate-proof agriculture sectors and economies are analyzed.

Study modules

Different modules of the case studies build on each other and form a holistic integrated assessment of the climate risks and resulting adaptation recommendations for the three case study countries:

Impact analysis:

Changing climate condition: Climate change projection data are analyzed to show the range of possible future climate conditions (ISI-MIP). Through projections of long-term climate change patterns, PIK identifies what damages are expected to arise under different climate scenarios by 2030, 2050 and 2100 (based on the Representative Concentration Pathways, RCPs).

Changing water availability for agricultural production: Using evidence from PIK impact simulation models, PIK provides information on the water availability as basis to analyze the climate change implications on crop growth. In addition, the land tenure situation in the country is mapped to assess the underlying exposure of populations in different areas and to evaluate the socio-economic impacts of water availability changes and subsequently climate change.

Climate impacts on crop production: This module uses climate change simulations in combination with crop impact models to project future crop yields. This can support farmers’ decisions to stabilize (and enhance) crop yields and cope with uncertain climatic conditions in the future. Moreover, impact models are used to disentangle the sources of risk which influence crop yields. This disentangling can show which share of yield variability is attributable to climate and which share is attributable to other factors (e.g. agronomic management, socio-economic). In addition, crop suitability models based on machine learning show projected changes of areas to produce certain crops, under the different climate scenarios. The current crop production situation is also assessed including its potential for future growth.

Action recommendations:

Potential for adaptation strategies: In this module, the feasibility and potential of selected adaptation strategies is assessed. A focus is put on crop insurance as a risk-sharing mechanism. The selection of further adaptation strategies is informed by the impact module results and undertaken in close collaboration with local stakeholders and experts.

Cost-benefit analysis: The strengths and weaknesses of the selected adaptation strategies are compared to the costs arising from climate change. A cost-benefit analysis of action vs. non-action to weigh the selected adaptation strategies is used to assess the possible benefits of potentially implemented adaptation measures in the three case study countries. This also provides information about reasonable costs of insurance premiums and feasibility of the risk reducing adaptation measures.

Stakeholder engagement and capacity building

Throughout the project an emphasis is put on closely engaging local experts and the implementing partners in the countries. This is ensured through participatory stakeholder and expert workshops in the case study countries, as well as close cooperation with stakeholders for the selection of the adaptation strategies that are analyzed as part of the project. In-depth expert- and key informant interviews complement this collaborative approach. In terms of capacity building, active exchange is sought with local partners and detailed methodologies of the study approach are made available to stakeholders in the partner countries, particularly regarding the economic assessment of climate change impacts and adaptation strategies, to enable independent uptake and replication by interested government-, NGO- and development cooperation actors across sectors.

Partners

This project is funded by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the German Federal Ministry for Economic Cooperation and Development (BMZ). It is meant to support government and development actors in the case study countries and beyond in prioritizing their adaptation investments.

Further questions:

Who will benefit from this project?

This research focuses on climate risks at the national and sub-national scale, while specifically analyzing adaptation strategies for smallholder farmers in the most vulnerable regions in the target countries. It is meant to inform adaptation investment and thus may inform policy and lead to implementation of the recommendations given. Engagement of various stakeholders, such as local researchers, businesses, government and development actors, helps to increase visibility and ownership of the research process and findings. The results of this research can be used not only in the case study countries, but more general insights may be gained for similar agro-ecologies and cropping patterns. In addition, the overall approach and methods followed could be transferred to other countries and regions, especially with regard to the economic analyses.

Why is climate risk analysis important for adaptation?

A main motivation for this project is that oftentimes adaptation decisions especially in developing countries have to be made without adequate analysis of the climate risks they seek to respond to. However, in order to make informed investments and to prioritize effectively, it is important to identify sectors, regions and populations most at risk, as well as to quantify the potential of adaptation strategies to buffer that risk. At the same time, a good understanding of climate risk and the usefulness of potential solutions is often a precondition for receiving donor funding.

How can risk transfer solutions help to cope with climate change impacts?

While most adaptation strategies seek to minimize risks stemming from climate change, not all risks can be eliminated. Thus, mechanisms are needed that distribute risk to avoid that certain groups or individuals are particularly affected and lose their livelihoods. One such risk transfer solution is crop insurance, which allows farmers to insure their crop yields against weather-induced losses. Many different types of crop insurance exist, for more information on the importance of crop insurance for coping with climate change please click here.

For more detailed information on this project, such as how to participate in this project, please contact the project leader: Dr. Christoph Gornott (gornott[at]pik-potsdam.de).


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