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CHAPTER FOUR
Managing the Climate
Challenge:
A Strategy for Adaptation
A
s the previous chapter demonstrates, many ideas are available about ways to
adapt to climate variability and change. However, few of these options have
been assessed for their effectiveness under projected future climate condi-
tions and how they might interact across the sectors and with other stressors. In
addition, effective planned adaptation is hampered by a number of challenges and
barriers, and there is a need for a comprehensive approach to adaptation planning to
overcome them. In the face of both limited knowledge on adapting in the context of
climate change and the importance of addressing climate change risks in a prudent
and timely manner, a process is needed that allows decision makers to identify and
address the most urgent risks and incorporate new information and knowledge in the
decision-making process in an iterative fashion. This chapter reviews the challenges
and barriers and suggests some approaches to choosing among the many options to
manage the risks associated with climate change, using the example of New York City’s
recent adaptation activities.
THE ADAPTATION CHALLENgE
Despite the nation’s substantial economic assets, at present its adaptive capacity to
respond to new stresses associated with climate change is limited. As a starting point,
it can be argued that our societies are not even well adapted to the existing climate,
especially to well-understood natural hazards (hurricanes, floods, and drought) that
continue to result in human disasters (Mileti and Gailus, 2005; NRC, 2006; O’Brien et
al., 2006). Numerous reports and academic research papers describe long-standing
impediments to natural hazards mitigation, and these challenges will continue to limit
our capacity to adapt to climate change—especially when it involves the intensifica-
tion of natural hazards (NRC, 2006).
Adaptation requires both actions to address chronic, gradual, long-term changes such
as ecosystem shifts and sea level rise, and actions to address natural hazards that may
become more intense or frequent. Addressing gradual changes is challenging be-
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cause the eventual extent of such changes is difficult to recognize and measure, plans
beyond 20 years are usually met with skepticism, and costs for initial investments may
be unaffordable even when cost-effective in the long term. The experience of New
Orleans with Hurricane Katrina—and in fact, continued development throughout
the nation in hazardous areas that increase exposure to coastal storms, flooding, and
wildfires—indicates a need for fundamental changes in the management of climate-
sensitive resources such as coastal areas regardless of the intensification of hazards
due to climate change. The continued development of vulnerable areas such as those
prone to flooding increases climate risks. Climate changes such as sea level rise and
increased storm intensity further exacerbate climate risks, bringing new urgency to
these issues. Existing recommendations for improvements in natural hazards manage-
ment (Heinz Center, 2000; NRC, 2006) should be considered very seriously since many
of these actions would address the most immediate needs for climate adaptation as
well.
Political Impediments
For several decades, climate change adaptation has been neglected in the United
States, perhaps because it was perceived as secondary in importance to mitigation
of greenhouse gas (GHG) emissions, or perhaps more importantly because it would
actually take attention away from mitigation by implying that the country can sim-
ply adapt to future changes (Adger et al., 2009; Moser, 2009b). In addition, the topic
of climate change and the discussion of options for responding have become much
more highly politicized in the United States than in some other parts of the world.
Arguments in the media over whether climate change is “real” and to what degree it is
a problem generated by human activity have confused people about whether action
is needed and whether their actions can make any difference (Boykoff, 2007). Further-
more, there are frequent suggestions in the media that responding to climate change
is “too expensive” or that the options available to limit emissions and adapt to impacts
will have a negative impact on the U.S. economy.
Adaptations to long-term problems involve long-term investments and bring consid-
erations of intergenerational equity and other social and economic factors into play
that significantly affect the calculation of costs and benefits. The influences of climate
change extend well beyond the election cycle of the typical public official in the
United States. Long-term adaptations must, therefore, hold some promise of short-
term reward if they are to be attractive to elected decision makers.
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Managing the Climate Challenge
Institutional and Resource Limitations
Several reports have found that current U.S. institutions at virtually every scale lack the
mandate, the information, and/or the professional capacity to select and implement
climate change adaptations that will reduce risk sufficiently, even when these adapta-
tion actions are urgently needed (Moser, 2009b; NRC, 2009a,b). New institutions and
bridging organizations will be needed to facilitate the communication and integrated
planning required to address complex intersectoral problems that cross geographic
scales (ACC: Informing an Effective Response to Climate Change; NRC, 2010a). Moreover,
the availability of funding for climate change adaptation at most levels of government
has been highly constrained, and there are few public-sector entities that have identi-
fied resources for adaptation (NRC, 2009a).
Identifying new financial resources that can be directed toward adaptation might be
difficult in any case, but it is particularly challenging as the world’s major economies
struggle to recover from the worst recession in decades. The vagaries of economic
cycles and the associated political volatility make it clear that adaptation efforts need
consistent sources of funding over time because “stop-and-go” efforts are far more ex-
pensive and far less effective. Mainstreaming adaptation considerations and outcomes
into decisions with climate-sensitive consequences (such as reauthorization of laws af-
fecting land and water use, the National Flood Insurance Program, or the Coastal Zone
Management Act) is one way to reduce cost, provide incentives to adaptation, and
perhaps smooth the intensity of adaptation efforts (see Box 4.8 later in this chapter).
Notwithstanding efforts to reduce costs, the total expenditures on adaptation will
most likely have to be substantial and grow over time. There is very little reliable
source material, however, on the total financial costs of adaptation, particularly for the
United States. To be sure, some studies apply uniform and, in many cases, simple rules
to estimate how societies will adapt and the cost of such adaptations. Such a “top-
down” approach often does not sufficiently account for geographic variation in vulner-
abilities, adaptations, and costs, and it usually fails to distinguish between voluntary
and policy-driven adaptation. Some recent studies have attempted to estimate either
global costs of adaptation or total costs for developing countries. For example, the
United Nations Framework Convention on Climate Change (UNFCCC, 2007) estimates
annual costs of $49 to $170 billion for global adaptation by 2030, and the World Bank
(2009) estimates annual costs of $75 to $100 billion by 2050 in developing countries
alone. Parry et al. (2009) concluded that the UNFCCC (2007) estimate may be too low
by a factor of 2 to 3.
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The literature does not contain comprehensive estimates of adaptation costs in the
United States, but early estimates for some sectors have been published. For example,
it has been estimated that the cumulative infrastructure costs of protecting low-lying
coastal areas in the United States from up to a 3-foot sea level rise could reach more
than $100 billion (Neumann et al., 2000), which avoids even larger losses to property
and land values. The cumulative costs of adapting water resource infrastructure to cli-
mate change in 2050 are estimated to be half a trillion dollars (CH2MHill, 2009). These
studies suggest that the annual financial costs of worthwhile adaptation in the United
States could be tens of billions of dollars by midcentury.
Although the lack of funding is a much more serious concern in developing countries,
it is clear that the United States has failed to properly maintain existing water, waste-
water, transportation, and energy infrastructure even for the climate that it faces now
(see AWWA, March 2009,1 estimates of infrastructure repair needs). As a result, there is
already an “adaptation deficit.” The need to cope with a dynamic climate that will pose
new threats over time only adds to the challenge and will most likely increase the
costs of investing in infrastructure.
MANAgINg THE RISK
Adaptation is fundamentally a risk-management strategy. Risk is a combination of
the magnitude of the potential consequences and the likelihood that they will occur.
Managing risk in the context of adapting to climate change involves using the best
available social and physical science to understand the likelihood of climate impacts
and their associated consequences, then selecting and implementing the response
options that seem most effective. Because knowledge about future impacts and the
effectiveness of response options will evolve, policy decisions to manage risk can be
improved if they incorporate the concept of “adaptive management,” which implies
monitoring of progress in real time and changing management practices based on
learning and as a recognition of changing conditions (ACC: Informing an Effective
Response to Climate Change, NRC, 2010a; NRC, 2009a; NRC, 2004) is incorporated. The
National Research Council (NRC, 2009a, p. 76) report states, “Rather than presuming
that managers make one-time decisions on the basis of the best existing knowledge,
1 The U.S. Environmental Protection Agency’s quadrennial assessment now estimates that $334.8 billion
needs to be spent over the next 20 years on drinking water infrastructure needs. The American Society of
Civil Engineers (ASCE) 2009 Report Card for America’s Infrastructure, which gave drinking water and waste-
water infrastructure a grade of D−, cited investment needs totaling around $1 trillion for both water and
wastewater over the same period. ASCE estimates the funding shortfall on drinking water projects alone
will be $11 billion annually.
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Managing the Climate Challenge
adaptive management regards policy choices for complex environmental problems as
part of a carefully planned, iterative, sequential series that emphasizes monitoring and
learning as the system changes, both in response to external stimuli and in response
to managers’ actions.”2
This section proposes a framework to manage the risk associated with the impacts
of climate change on the natural and built environments. The framework includes (1)
identifying the key problems and asking the right questions, (2) assessing the risk, (3)
perceiving the risk, (4) properly communicating risk to decision makers, and (5) de-
signing and implementing risk-management strategies.
Identifying the Problems and Asking the Right Questions
It is important to be clear at the start about the problem to be managed. Without a
shared understanding of the nature of the problem, the desired goals of the stake-
holders, and the “decision context” (Jacobs et al., 2005), collective risk management
is not likely to be successful. In framing the problem, it is important to include the
perspectives of individuals and interested parties whose voices and concerns might
not otherwise be heard, those who will assume the responsibility of administering
and implementing the adaptation and sustaining it over time, and those involved
in monitoring success or failure against stated goals and objectives. In coping with
uncertainty, it will be particularly important to separate relevant signals from random
noise in the observations, carefully analyze new scientific information, and design
“midcourse” adjustments based on lessons learned.
For example, when developing adaptation measures to reduce the impact of sea
level rise on damage to coastal areas from floods and hurricanes, key interested par-
ties should include the relevant public- and private-sector agencies concerned with
climate change impacts, businesses that will develop technology or approaches to
adaptation, those who are vulnerable economically and physically (e.g., adverse health
or environmental effects), and those who will have to pay for adaptation measures and
deal with the adverse impacts from global warming.
2 It is important to note that “adaptive management” is used here in its most general form. It implies
an iterative process in which decisions are based on evolving understanding of the underlying natural and
social science and the observed success (or failure) of programs and policies that have been implemented.
The panel is not using the Holling (1978) framework, in which policies and programs are viewed as experi-
ments designed to elicit new information.
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Assessing Risk
In the context of climate adaptation, assessing risk means identifying specific (climate-
related) events and evaluating their potential adverse (and in some cases beneficial)
consequences in terms of magnitude, spatial scale, time frame, duration, intensity,
and consequences for society. Risk as assessed by experts encompasses studies that
estimate the chances of a specific set of events occurring and/or their potential con-
sequences (Haimes, 1998). The primary goal of assessing risk is to produce information
that improves risk-management decisions and to identify and quantify the impact of
alternative actions (including the status quo) and their consequences. Assessing risk
may also include considering the nature of vulnerabilities and consequences associ-
ated with specific risk-management decisions.
Once the problem is well identified, assessing risk begins with hazard identification—
the process of specifying the scope of the assessment. In the case of climate change,
the available empirical evidence can be summarized with respect to its potential
impacts on natural and social systems and different economic sectors, including
interactions between sectors and systems. In some cases, these impacts can be associ-
ated with specific climate futures (high, medium, and low emissions over time, with
or without efforts to limit atmospheric GHG concentrations). Other scenarios can be
based on emissions trajectories with distributions of impacts over time. In either case,
the process of assessing risks will vary depending on the sector being examined and
the interests and concerns of affected stakeholders.
Scenario analysis is a widely used technique for identifying vulnerabilities from cli-
mate change (see Mearns and Hulme, 2001). In some cases, the relative likelihoods of
alternative futures can be supported using risk-based techniques such as expected
cost-benefit analysis and decision analysis, including expected value of information
and efficient risk-spreading designs (e.g., insurance). In other cases, several scenarios
(e.g., high, median, and low) can be employed to span the range of possible outcomes.
Here, the robustness of alternative responses and the potential value of hedging
strategies can be explored, but only if the scenarios capture a wide range of changes
in key climate variables such as temperature, precipitation, and sea level rise. The
diversity of possible futures is particularly critical to explore if the direction of change
in a key variable such as precipitation is not clear (for example, in cases where climate
models do not give consistent projections or predict whether precipitation increases
or decreases).
If adaptations are expensive, decision makers might want to judge the appropriate
timing for incurring the costs of adaptation investments. In the context of coastal
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Managing the Climate Challenge
flooding, for example, property owners might want to explore the frequency of other
sources of similar vulnerability (e.g., extreme local precipitation events) to judge po-
tential ancillary benefits of adaptation investments. For example, elevating houses in
the face of rising water will not only reduce the potential losses to one’s own property
but also alleviate damage to neighboring structures. Effects of climate change, includ-
ing rises in sea level, increases in storm frequency, and changes in the ecological prop-
erties of natural systems (such as loss of storm-buffering wetlands or mangroves), not
only will impact coastal infrastructure but will also alter potential tradeoffs between
different approaches to reducing risk (CCSP, 2009b).
Perceiving Risk
Risk perception is concerned with the psychological and emotional factors (e.g., anxi-
ety, regret, and peace of mind) that have been shown to have an enormous impact on
behavior and that need to be considered when developing risk-management strate-
gies (Slovic, 2000). Decisions are affected by the perceptions of those who make them,
so the potential importance of risk perception cannot be overestimated. There is a
wide disparity between the views held by the general citizenry and those of experts
about risks associated with climate change—both the nature and seriousness of the
consequences and their associated probabilities (Leiserowitz, 2005). There is also a
growing body of evidence showing that emotions play an important role in individu-
al’s decision-making processes. Rather than basing one’s choices simply on the prob-
ability and the consequences of different events, as normative models of decision
making would suggest, individuals are also influenced by emotional factors such as
fear, worry, and love (Finucane et al., 2000; Loewenstein et al., 2001). These concerns
deserve serious consideration when developing adaptation strategies for addressing
the future impacts of climate change. In addition, an important factor in motivating
protective actions by individuals is their knowledge about what to do to reduce one’s
vulnerability to a certain hazard (Paton, 2008). These factors should be anticipated in
discussions about the appropriate decision-support approach and taken into account
when developing and communicating risk and managing risk strategies. Educational
programs may, in these cases, be prerequisites for galvanizing public support for
expensive but important, forward-looking responses (ACC: Informing an Effective Re
sponse to Climate Change; NRC, 2010a).
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Communicating Risk
Well-designed approaches to explaining risk encourage the effective participation
and interaction of technical experts, stakeholders, and decision makers in managing
risk decision processes and deliberations. Poorly designed communication can breed
resentment and mistrust (NRC, 1996b), especially when communication techniques
are perceived as biased or inappropriate to the audience. A growing number of stud-
ies have shown that communication of risk and uncertainty is important in helping
people respond to climate change (NRC, 1996b, 2010a). What most risk researchers
consider the ideal approach for communicating uncertainty and risk focuses on es-
tablishing an iterative dialogue between stakeholders and experts, where the experts
can explain uncertainty and the ways it is likely to be misinterpreted; the stakeholders
in turn can explain their decision-making criteria as well as their own local knowledge
in the area of concern; and the various parties can work together to design a risk-
management strategy, answering each others’ questions and concerns in an iterative
fashion (Fischhoff, 1996; NRC, 1996b; Patt and Dessai, 2005).
Designing and Implementing Risk-Management Strategies
Based on case studies and its own experience, the panel suggests that providing a
portfolio of options for managing risk is likely to be more effective than relying on a
single solution. Using multiple strategies simultaneously—such as providing public
education (i.e., communicating risk), offering economic incentives (e.g., subsidies, fines,
or tax incentives), or intervening directly to prevent or avoid consequences (e.g., by
implementing regulatory standards or restricting activity)—provides the most robust
way to address risks. The multiple strategies chosen sometimes involve public-sector
actions (e.g., regulations, standards); in other circumstances, they can include strate-
gies to spread or transfer risk (e.g., offering or requiring insurance and/or compensat-
ing for losses). Strategies for managing the risk can be evaluated in a variety of ways
(see detailed discussion below). “Robust decision making” tests a number of different
options and results in a decision path that keeps as many future options on the table
as possible (ACC: Informing an Effective Response to Climate Change; NRC, 2010a).
Currently, however, there is inadequate information about the effectiveness of adap-
tation options in many specific applications, frequently because essential metrics for
evaluation are unavailable or because the responsible party perceives the benefits
from monitoring outcomes to be insufficient to justify this activity. For now, much
can be learned through discussions, collaboration, and applying lessons learned from
experiences at the local or state level or in other countries. Learning by doing, as well
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Managing the Climate Challenge
as by deliberately testing different adaptation approaches (e.g., NRC, 2009a), sustained
monitoring, collection, and analysis of the right data will be essential if we are to
identify lessons and evaluate effectiveness. Furthermore, it is challenging to assess the
net value of an adaptation measure given the uncertainties associated with changes
in climate and impacts as well as the long time frames over which climate change will
happen. Designing assessment programs to evaluate adaptation costs and successes
critically is therefore essential. Research in this area should recognize that adaptations
will likely need to be adjusted as the climate continues to change and that, in some
cases, the actual benefits of adaptations may not be obvious or measurable for many
decades following the investment.
There is also a need for risk-management approaches that accommodate multiple
metrics (standards of measurement) of climate impacts, and for decision-support tools
that complement more traditional cost-benefit approaches of policy analysis (see, e.g.,
Yohe, 2009a,b). Many impacts (on ecosystems, for example) and many contexts (in-
cluding social consequences) cannot be fully monetized (Downing and Watkiss, 2003).
If decisions are made comparing only economic measures quantified exclusively in
financial terms, then social and ecological consequences and other nonmonetized
impacts cannot be considered in proportion to their significance.
While it is essential to communicate the risks of inaction, it is equally essential that the
risks of any potential adaptation action—including indirect consequences—be effec-
tively communicated. For example, those residing in areas that are protected by dams
or levees are likely to believe that they are fully protected against future flooding or
storm surge. In reality, some levees have been poorly designed, as evidenced by Hur-
ricane Katrina, but it is only after a hurricane or flood that attention is drawn to these
inadequacies. Furthermore, there is likely to be new development in these regions
unless officials and the public are made aware that it is possible for these flood-control
and engineering solutions to fail. The result, known as the “levee effect,” can be losses
that are much larger than they would have been if the risks had been correctly per-
ceived and economic development in these areas had been limited in the first place
( Tobin and Montz, 1997).
As noted above, perceptions of risk are often inconsistent with scientific approaches
to assessing risk. Factors such as fear and anxiety impact judgments of risk, and short-
sighted behavior is common, making it particularly important to design adaptation
strategies that encourage individuals to take a longer-term perspective in their own
best interest (and that of society more generally). Given the tendency of decision mak-
ers to evaluate the net benefits of strategies over only a 2- to 3-year span, it may be
necessary to provide short-term returns to encourage the adoption of long-term ad-
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aptation strategies. For example, long-term contracts with short-term returns may be
required to encourage investment in cost-effective adaptation measures for dealing
with increasing damage from future floods or hurricanes as sea level rises (see Box 4.8,
later in this chapter). In this case, long-term flood insurance (to spread risk) and long-
term home improvement loans (to finance adaptation measures) might be combined
with initial discounts on annual premiums that are likely to exceed the annual cost of
the loan (Kunreuther and Michel-Kerjan, 2009).
A complementary approach is to revise and enforce land use regulations and build-
ing codes using standards that reflect the risks of climate change impacts. In the case
of building codes, the challenge is to apply them to existing structures in harm’s way
rather than just new structures. Often such retroactive codes are necessary, particu-
larly when property owners are not inclined to invest in adaptation measures on their
own—either because they perceive a disaster will not happen to them or they be-
lieve the risk is small relative to the cost of adaptation. Insurance premium reductions
coupled with long-term loans could make well-enforced building codes more palat-
able to property owners.
DEvELOPINg AN EFFECTIvE ADAPTATION STRATEgy
Because the perception that climate fluctuates around a stationary mean is in conflict
with recently observed climate dynamics (Milly et al., 2008), decision makers need an
approach that is responsive to changes in the likelihood of extreme outcomes as well
as changes in the “average” climate. Resources and natural processes may change their
function and their location, and in some cases may cease to exist (IPCC, 2007a; West et
al., 2009). Rather than managing the resource to maintain its past condition and state,
management may need to take steps to protect the resource (e.g., building coastal
defenses) or allow the resource to change as needed to adapt to climate change (e.g.,
allow migration of species to new habitats or manage forests for fire control instead
of for timber). In other words, the managers of these resources must work to incorpo-
rate the impact of climate change in their plans and operations. Instead of managing
for resilience (which implies returning to the status quo), managing for change might
become a more feasible approach (West et al., 2009).
This chapter uses the recent example of New York City (see Box 4.1), one of the most
comprehensive approaches so far to adaptation in the United States, to illustrate some
basic principles for developing and implementing an effective adaptation strategy.
There are a number of other examples of municipalities and states (large and small)
that have developed and begun implementing adaptation strategies. Keene, New
0
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bOx 4.1
The New york Experience
New York City responded to the challenges of a changing climate by creating several par-
ticipatory mechanisms: broad public input through PlaNYC, a Climate Change Adaptation Task
Force, and a Policy Working Group. PlaNYC was announced in December 2006 as a sustainability
and growth management initiative to answer the question of what kind of city New York should
be—posing the question “Will you still love New York in 2030?” After PlaNYC was announced, a
top-to-bottom outreach effort began to receive input on goals for 2030. Staff met with thousands
of community leaders and representatives and received thousands of e-mail suggestions. This
input was synthesized into “10 goals for 2030,” which became the basis for PlaNYC.
The plan’s scope was soon expanded to consider climate change as a major threat to sustain-
ability.The 10 goals of PlaNYC are distributed across three challenges areas (growth, infrastructure,
and the environment) and six planning elements that correspond to the city’s environment: land,
water, transportation, energy, air, and climate change.1
Responding to strong leadership from the mayor’s office under Michael Bloomberg, New
York City created a Climate Change Adaptation Task Force that included various private and
public stakeholders. The stakeholders were divided into working groups that represent broad
categories of infrastructure: communications, energy, transportation, water, and waste. In ad-
dition, a Policy Working Group was convened to review the codes, rules, and regulations that
govern infrastructure in New York City and to identify those that may need to be changed or
created to help the city cope with climate change. Each working group provided a forum within
which stakeholders could identify common vulnerabilities, share best practices, take advantage
of potential synergies, and develop coordinated adaptation plans. At appropriate stages in the
Task Force process, the individual working groups came together to ensure consistency, identify
opportunities for coordination, investigate impacts of adaptation strategies on other sectors,
and develop cross-sector adaptation strategies. Since the Policy Working Group’s focus on the
regulatory context spanned a broad range of issues, it was particularly vigilant in coordinating
its efforts with other working groups. Adaptation strategies that impacted multiple stakeholders
were identified as possible citywide strategies and forwarded to the full Task Force for further
evaluation and development.
1For details, consult http://www.nyc.gov/html/planyc2030/html/plan/plan.shtml.
Hampshire (ICLEI, 2007), is, for example, a small municipality that is carrying out a simi-
lar effort in a much different context. The panel focuses initially on New York, however,
because the city has documented its steps very carefully, including peer review, in de-
signing a plan that incorporates the impacts of climate change as a threat to sustain-
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bOx 4.6
The New york City Risk Matrix
In evaluating risk, New York City stakeholders filled in an automated template that measures
risk as a factor of likelihood of impact, if a given climate hazard event should occur, and the mag-
nitude of the consequence of such an impact. Depending on the response for each category,
the spreadsheet then automatically generated a placement on a two-dimensional risk matrix
(see figure below). If the automatically generated risk did not align with expert judgment, the
spreadsheet provided the opportunity for override with notes explaining the override decision. If
an adaptation measure was under way or planned and fully funded, stakeholders were instructed
to take into account the benefits gained from those measures when conducting this exercise.
Instances were also considered where updated measures not explicitly related to climate change
adaptation were already under way within an organization or agency that would provide ancillary
benefits for climate change adaptation.
The NYC risk matrix. A two-dimensional risk matrix was used to highlight the fundamental nature
of the risk faced by specific types of infrastructure. SOURCE: City of New York (NPCC 2010).
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bOx 4.7
Casting Adaptation to Climate Change Within New york’s Development Plans
The implementation step (number 7 in Figure 4.1) cannot be done in isolation. Investments
in adaptation programs must be integrated into budget decisions that recognize a myriad of
competing demands for scarce resources. In its planning process, New York City has concluded
that it is essential that both the urgency and the cost of any proposed adaptation response be
compared with other adaptation options so that its place in the long-term sustainability plan-
ning of the city can be determined and supported. The city developed a prioritization matrix to
assist in this final step (see figure below). Notice, though, that the monitoring function in step 8
of Figure 4.1 must include not only adaptations that are implemented but also adaptations that
are deferred. In that way, the flexible, iterative program can adjust its evaluation of urgency for
the next round of decisions.
In summary, climate change planning was embraced in New York City as a way to integrate
ongoing plans focused on growth management, infrastructure, and environmental sustainability.
Climate change was chosen as the integrating element because adaptation to changes in climate-
related risks could serve as a focal point. This “mainstreaming” of climate change planning into
other ongoing initiatives moved adaptation to an advanced stage very quickly. The public-private
initiative that was developed, with vigorous and effective leadership from the Mayor’s Office,
provided a coordinated approach while still allowing each stakeholder group to identify vulner-
abilities and suggest pathways to resilience and sustainability.
Prioritizing with respect to urgency and cost. Locating adaptation strategies that emerged from
the evaluation process in a matrix that contrasts urgency with cost is the final step before an
overall strategy for responding to climate change is brought into general budgeting and invest-
ment conversations. SOURCE: City of New York (NPCC 2010).
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exist for overcoming each of these barriers, although some are more easily overcome
than others:
Inadequate Information and Experience
• There is a high degree of uncertainty about future climate impacts at a scale
necessary for most decision making, and there are uncertainties associated
with the complexity of interactions between natural and socioeconomic sys-
tems. Because of these uncertainties, a variety of new management tools and
region- and sector-specific data on likely climate impacts are needed, as well
as new approaches to decision support.
• There is limited knowledge and experience with adaptation in the context of
climate change among decision makers, resulting in a need for “learning by
doing” and deliberately testing new approaches. The prospect of a nonsta-
tionary future climate system results in a need to design policies, monitoring
activities, and processes that accommodate adaptive management.
• Limited stakeholder awareness of climate-related risks suggests that better
information, public education, and decision support are required.
Inadequate Institutional Support for Adaptation
• Conflicting mandates within federal agencies and incentives for maladaptive
behavior within governmental programs suggest a need to change regula-
tions and incentives that currently increase climate-related risk.
• Lack of coordination across levels of government and between government
and the private sector at multiple spatial scales means that mechanisms for
interagency coordination need to be improved and networks of existing adap-
tation capacity will need to be strengthened.
• Inadequate institutional support for planning and implementing adapta-
tions to climate change suggests that government and private-sector institu-
tions need to be designed to (1) develop, interpret, and disseminate scientific
information on climate change; (2) develop adaptation options; (3) help find
resources to support adaptation programs; (4) enable adaptation projects to
be implemented; and (5) monitor the success or failure of adaptations and
enable corrective action to be taken. As with infrastructure-based solutions,
however, institutions can either help or impede adaptations. Some institutions
developed to support activities appropriate under prior climate conditions
may discourage change and thus can impede adaptations.
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Lack of Resources and Technology for Adaptation
• Many adaptation options will require financial investment, and insufficient
capital or access to capital may limit options in many sectors or regions. If
costs are too high, lower-cost options may be preferred or it may be possible
to phase in adaptations to spread costs out over time. Inadequate resources
can be addressed by (1) having a long-term investment strategy that includes
identifying consistent sources of funding that are not subject to the vaga-
ries of politics and (2) finding ways to limit the costs of adaptation, such as
by mainstreaming adaptation into a wide range of decisions with climate-
sensitive consequences, including reauthorization of laws affecting land and
water use and construction or renovation of major infrastructure.
• New technologies may be needed to adapt to climate change. There are many
types of technologies that can help adapt, including agricultural cultivars that
are resistant to heat, drought, or excess moisture; water conservation tech-
nologies; and monitoring technologies. Research and development needs are
further discussed in Chapter 7.
• The role of infrastructure in protecting existing ecosystems and valued invest-
ments needs to be considered. For example, having sufficient coastal protec-
tion or water storage infrastructure can help societies adapt to changing sea
levels or diminishing water supplies.
behavioral Impediments
• Behavioral impediments, such as a failure to acknowledge risks of climate
change impacts, can be partially overcome through leadership, education,
and better facilitation of decision processes. The likelihood that impacts will
exceed the capacity to adapt in some regions and sectors creates a need to act
quickly to reduce GHG emissions and to be better prepared for disasters.
• A short-term perspective among policy makers, which limits the capacity to
address problems such as sea level rise, needs to be replaced by consideration
of both short- and long-term benefits as well as multigenerational equity.
There is a tendency to discount the future at a much higher rate than would
be used in benefit-cost analyses (Loewenstein and Prelec, 1992). Furthermore,
decision makers tend to ignore risks when perceived likelihoods fall below
some threshold of concern (Huber et al., 1997).
• Underlying social and economic stresses that increase vulnerabilities to
climate change impacts can be addressed by deliberately identifying and
managing multiple stresses in an integrated manner. A sustainability-focused
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solution set can be designed to solve multiple problems. Uneven access to
adaptations among different income classes and populations can increase the
vulnerability of society as a whole to climate change. The effect of inequity in
vulnerability among such groups was clearly demonstrated in the immediate
aftermath of Hurricane Katrina (Wilbanks and Sathaye, 2007).
It should be noted that in general, such barriers are far more prevalent in developing
countries than in the United States (Smit et al., 2001). Therefore, the vulnerability of
developing countries to climate change is generally considered to be much greater.
This topic is considered separately in Chapter 7 (see also IPCC, 2007a).
LIMITS TO ADAPTATION
Potential adaptations to climate change have physical, economic, and institutional lim-
its. For example, there are practical limits to how high seawalls and levees can be built,
how much irrigation water can be applied, and how large storm sewers and culvert
capacities can be. Institutional practice (custom, regulatory, legal) further constrains
adaptations. Typically, major capital investments are financed over at most a few de-
cades, whereas the infrastructure can last a century or more. A change in infrastructure
design that will mostly provide benefits beyond the finance period may be difficult
to justify (AWWA, 2009b). Furthermore, some adaptation options have maladap-
tive or unanticipated effects. A common example is the so-called levee effect, where
establishing levees or seawalls encourages further development, thereby increasing
catastrophic losses when the levees are eventually overtopped or seawalls breached
( Tobin and Montz, 1997). A framework for considering thresholds for major “reasons
for concern” was introduced in Chapter 2.
A thorough adaptation plan examines these limits to adaptation, even if probabilities
of such outcomes are low (high-impact/low-probability events). As a result of con-
sidering such outcomes, the planning process might include evaluations of whether
objectives may need to be significantly changed. This can be a politically challenging
topic to address because it involves admitting that adaptation strategies may not or
cannot meet the objectives under all conditions. Contingency plans for such out-
comes should be developed, although much research is needed on how to develop
such plans.
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RESEARCH AND DEvELOPMENT IN SuPPORT OF ADAPTATION
While there are myriad adaptation options available to address vulnerabilities to cur-
rent climate variability and extremes, research is urgently needed to devise innovative
adaptation strategies to address the impacts of a changing climate. These strategies
will need to tackle issues such as the unprecedented pace of change, the potential for
crossing thresholds, the interaction of climate change with multiple other stressors,
and the difficulties of anticipating the magnitude of extreme events. There is a major
role for institutional innovation in adaptation. Box 4.8 suggests ways that the National
Flood Insurance Program could be modified to reflect the risks associated with climate
change while at the same time encouraging adaptation measures.
Among the areas where research can expand adaptation opportunities is in devel-
oping new technologies and management approaches and improving information
on climate change, particularly at the regional and local scales where adaptation
decisions will be made. Chapter 7 discusses in greater detail the major scientific and
technological needs to promote effective adaptation to climate change. A key ques-
tion decision makers might face is whether adoption and implementation of adap-
tations should wait for such improved regional-scale information. One option is for
decision makers to develop robust adaptation approaches that will be effective in
a range of future conditions, regardless of the pace of scientific and technological
developments—especially since the degree of certainty about climate change trajec-
tories that most decision makers desire is unlikely to be forthcoming.
Because of the considerable uncertainty regarding regional-scale climate change
impacts, many stakeholders addressing climate change have expressed frustration
with the lack of agreement on projections across global climate models as well as with
these models’ low spatial resolution. Research should aim to improve the resolution
and accuracy of climate modeling and thereby increase confidence in the projections,
particularly where consideration of adaptation options has identified specific infor-
mational needs. However, it is important to recognize that many adaptation decisions
do not require precise forecasts of future conditions. For example, adaptations that
incorporate flexibility, robustness (see discussion on robust decision making), or are
hedging strategies may be effective under a wide variety of possible changes in cli-
mate (as well as under current climate conditions). The adoption of such adaptations
need not await improved accuracy in climate predictions. Some decisions such as on
infrastructure or other investments with a long lifetime can benefit from more pre-
cise climate projections. For such decisions, stakeholders need to weigh whether it is
better to make a decision based on the current state of science or delay in the hope of
having more precise projections in the future. Stakeholders should consider that while
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bOx 4.8
Case Study in Innovative Adaptation: The National Flood Insurance Program
New mechanisms for public-private partnerships in adaptation measures are needed, particularly
in reducing future losses from floods and hurricanes associated with climate change. Insurers provide
private-sector financial protection to those at risk from potentially large catastrophic losses (e.g., due to
earthquake, hurricanes, or terrorist attack) by charging a fee (premium) to those who seek such protec-
tion and, in turn, agreeing to pay all or a portion of the financial losses incurred in the event. Insurers
that write policies for a large number of properties in a single geographical area face the possibility of
large losses from a single event. The amount of coverage that an insurance company is willing to offer
depends on the firm’s capital management, regulatory approvals of rates, availability and price of risk
transfer instruments, and the insurer’s appetite for risk.
Insurance in the United States is regulated at the state level, with the principal authority residing
with insurance commissioners. Insurance commissioners often regard solvency as a principal objective
for insurers, even if it means requiring higher premiums or other insurer adjustments (e.g., reducing
their catastrophe exposures). State governments also have created and operated catastrophe insurance
programs following large-scale disasters to supplement private insurance and reinsurance.
Private- and public-sector insurers could play a role in encouraging adaptation to climate change
risks in flood- and hurricane-prone areas.1 This could be done by increasing insurance premiums to
better reflect the value of the risk. Insurance premiums could be set at a price that captures the value
of the asset as well as the level of risk present. Establishing premiums in this way would provide signals
to individuals about the level of hazards they face and could encourage them to engage in cost-ef-
fective adaptation measures to reduce their vulnerability to catastrophes. Risk-based premiums could
also reflect the cost that capital insurers need to integrate into their pricing to ensure adequate return
to their investors.
The application of this approach would provide a clear signal of likely damage to those currently
residing in areas subject to natural disasters and those who are considering moving into these regions.
Risk-based premiums would also enable insurers to provide discounts to homeowners and businesses
that invest in cost-effective loss-reduction actions. If insurance premiums are not risk-based, insurers
have no economic incentive to offer such discounts. In fact, they prefer not to offer coverage to these
property owners at all because it is a losing proposition in the long run.
In the context of the National Flood Insurance Program, applying this approach would require more
accurate flood maps than currently exist. A recent National Research Council report (2009b) highlights
the need for the Federal Emergency Management Agency (FEMA) to collaborate with federal, state,
and local government agencies in this regard. The risks associated with losses from hurricanes and
flooding may be higher than current estimates if there is an increase in the intensity of hurricanes or a
higher-than-anticipated sea level rise caused by climate change during the next 10 or 20 years.
Pursuing risk-based premiums could dissuade development of hazard-prone areas, but it could
have high, unexpected costs for those already living in these locations. The value of land in high-hazard
zones has a wide range. It may be desirable, beachfront property prone to erosion; but it could be land
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that is affordable because it is vulnerable to flooding. Therefore, to address issues of equity and afford-
ability, financing for increased premiums could come through general public funding for homeowners
currently residing in hazard-prone areas, particularly low-income uninsured or inadequately insured
homeowners, rather than through insurance premium subsidies.
The drawback of this provision is that it could discourage adaptation among residents of hazard-
prone areas. As discussed in the next section, regulations imposed by state insurance commissioners
keep premiums in many hurricane-prone regions artificially lower than the risk-based level, encouraging
maladaptive behavior. If residents in these areas were provided with financial assistance from public
sources to purchase insurance, it could directly encourage development in hazard-prone areas and
exacerbate the potential for catastrophic losses from future disasters.
The complexity involved in adjusting insurance premiums, addressing concerns about equity,
and accounting for behavioral biases suggests that innovative strategies are needed to encourage
individuals to adopt cost-effective loss-reduction measures. Two possible complementary measures
for dealing with this problem could be long-term contracts and well-enforced building codes.
LongTerm Contracts for Encouraging Adaptation
Two types of long-term contracts could encourage individuals to invest in adaptation measures:
long-term flood insurance and long-term loans. Today, flood insurance is only offered as an annual
contract, and many property owners would be reluctant to incur the costs even if they received a
premium discount the next year. If property owners underweight the future, or only focus on the
expected reduction in losses for the next several years, they would not want to incur the up-front cost
of an adaptation measure. An alternative approach, then, would be a 20-year flood insurance policy
that would tie the contract to the property rather than to the individual.
LongTerm Home Improvement Loans
The second suggested measure would provide long-term home improvement loans, tied to the
home’s mortgage,for reducing vulnerability to climate change impacts.Such loans could be incorporated
as part of the mortgage at a lower interest rate. A commercial bank would have a financial incentive
to provide this type of loan: by linking the adaptation expenditures to the structure rather than to
the current property owner, the annual payments would be lower, making the loan more attractive to
mortgagees. The bank would be more fully protected against a catastrophic loss to the property, and
FEMA’s potential loss from a major flood would be reduced because of the investment in adaptation.
These adaptation loans would constitute a new financial product, and the general public would see
fewer tax dollars spent on disaster relief (Kunreuther and Michel-Kerjan, 2009).
1For a more detailed discussion of these principles see Kunreuther and Michel-Kerjan (2009).
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the science of climate change projections can be expected to improve (e.g., as the
models and techniques for analyzing multiple model projections improve), substantial
enhancements in climate projection science may take many years or decades to be
realized. Consequently, delaying adaptations in anticipation of improved science can
increase risk, for example, by delaying taking measures to reduce exposure to climate
hazards (Barsugli et al., 2009). Therefore, it remains necessary to evaluate the tradeoffs
between acting based on the current state of science versus delaying in hope of hav-
ing improvements (ACC: Informing an Effective Response to Climate Change, NRC 2010a;
Barsugli et al., 2009).
CONCLuSIONS
Adaptation to the inevitable impacts of a changing climate has emerged as a pressing
concern at all levels of government, but actions are still hampered by lack of engage-
ment, lack of resources, lack of adaptation-related research, poor understanding of
vulnerability, and limited capacity to improve these conditions in the face of compet-
ing policy priorities. Recent developments—the emergence of scientific consensus on
causes and long-term trends in climate change; evidence that climate change impacts
are already under way; realization that greater changes are coming, even if their timing
and magnitude remain uncertain; and recognition that the past is no longer a reliable
guide for the future—have validated the need for adaptation planning to manage risk.
The existing barriers to adaptation illustrate that, without a well-integrated, compre-
hensive planning process and an adaptive risk-management approach, the United
States is ill prepared at this time to efficiently and effectively deal with climate change
impacts.
Clear strategies and coordination across agencies and all scales of government within
the United States will be essential to leverage limited resources; avoid redundant or
conflicting projects, mandates, and guidelines; improve understanding of changing
conditions; overcome behavior-based limitations to the capacity to adapt; and encour-
age learning as part of the policy-making process. Many states and municipalities have
developed strategies and plans to adapt to climate change. These experiences have
provided valuable insight into effective planning for adaptation, contributed to build-
ing the nation’s adaptive capacity, and identified some win-win solutions to reduce
the impacts of climate change.
In general, risk-management approaches to adaptation planning and action do not re-
quire a high level of precision about longer-term impacts of climate change, because
they seek robust responses to a range of possible risks over time. Due to uncertainties
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about future impacts and contexts, risk-management approaches can assist planning
and decision making because such approaches tend to emphasize options that offer
co-benefits, that is, that have benefits for reducing sustainable development stresses
as well as for improving the ability to cope with climate change.
Conclusion: A risk-management approach provides an appropriate framework for
assessing the costs and benefits of adaptation options and prioritizing adaptation
activities.
Conclusion: Governments, individuals, and organizations that are or may be
affected by climate change need to begin to adapt by assessing their current
and future vulnerabilities and developing adaptation strategies and plans. New
York City provides an excellent example of ways to structure a public process for
setting adaptation priorities and of the vital role of leadership in managing such
processes.
Conclusion: An adaptation strategy needs to define a clear set of objectives
that are focused on building adaptive capacity and reducing risk over multiple
time frames, sectors, and scales. It needs to engage a wide range of participants,
including those who are vulnerable and those who will be responsible for
implementing the strategy. The success of the strategy will at least in part depend
on the ability to engage both public and private sectors, to provide incentives for
adaptive behavior, to communicate both risks and opportunities, and to prepare
for gradual changes as well as low-probability/high-impact extreme events.
Conclusion: An adaptation plan to implement this strategy needs to include the
following:
• An assessment of vulnerabilities in the context of other existing stresses,
and the identification of adaptation options that are consistent with
achieving broad societal objectives, including economic and environmental
sustainability goals.
• A consistent methodology to analyze and evaluate adaptation options,
including opportunities to “mainstream” adaptations within existing pro-
grams and processes and eliminate existing incentives for “maladaptive”
behaviors. This should include consideration of the following:
o Benefits (effectiveness) of adaptation, including reducing vulnerability
to climate change impacts;
o Co-benefits: positive effects on other systems or sectors;
o Adverse impacts: negative effects on other systems or sectors;
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o Costs to implement the adaptations;
o Overcoming barriers to adoption of the adaptations; and
o Limits to adaptation: At what magnitude of climate change would the
adaptations become ineffective?
• A plan for monitoring and evaluation of the adaptations in order to facili-
tate adaptive management of risks, learn from experience, and build adap-
tive capacity.
