Helen Clark: Speech on Adapting from the ground up - a new perspective on private sector engagement and resilience

Dec 8, 2015

UNDP is delighted to have worked with the World Resource Institute (WRI) on this report: “Adapting from the Ground Up: Enabling Small Businesses in Developing Countries to Adapt to Climate Change”, and it is a pleasure for me to co-launch it today with WRI President, Andrew Steer. The report draws on the experience of both WRI and UNDP in working with the public and private sectors to increase the resilience of micro and small businesses to climate change.

The UN Environment Programme, UNEP, estimates that adaptation to climate change will cost between US $200 billion and $500 billion per year[1] - even if climate negotiators strike a deal this week to stop the world crossing the 2°C threshold of temperature rise above pre-industrial levels. If they failed to reach agreement, the cost of adaptation would be exponentially higher. That would have very adverse consequences, especially for poor and vulnerable people and countries.

Many developing countries will need significant financial support in order to adapt to climate change. Existing public funds and likely future funding from global agreements and compacts are not yet large enough. All forms of finance – public and private, domestic and international, environmental and development – are needed for the transition to inclusive, low-emission, sustainable and climate-resilient development.

The report we are launching today focuses on the role of the private sector in adaptation, and makes the case for why governments should encourage micro and small businesses in developing countries to invest in it. These enterprises can be powerful agents of change in their commitments to lead on building resilience.

The report notes that in most developing countries, micro and small enterprises provide at least sixty per cent of all employment. Often these businesses are the only source of employment, income, and market access for the poor. They also underpin the socio-economic structure of most communities.

Those which operate in the agriculture, fisheries, forestry, and livestock sectors are highly dependent on the natural environment, and thus particularly vulnerable to climate change.

Thus it is crucial that these sectors of the economy are able to build resilience to climate change.  Micro and small enterprises will benefit from increasing their own resilience, and they are well-positioned to develop and sell products and services which strengthen the resilience of the communities in which they operate. 

For this to happen, however, the barriers which micro and small enterprises face in investing in adaptation need to be addressed.  Ultimately, businesses will be motivated to invest when they can see the benefits for them.

The report highlights a number of way in which decision-makers could support micro and small enterprises to adapt to climate change, including:

  • providing them with adequate information on the impact of climate change and the cost benefit of adaptation for business sectors, and building technical capacities to adapt;
  • using innovative mechanisms to reduce investment risk; and
  • removing policy and regulatory obstacles to adaptation.

UNDP’s role in promoting resilience among MSEs

UNDP’s adaptation portfolio includes 44 projects worth $188 million which focus on supporting vulnerable farmers to adapt to climate change. More than half of these projects are in Africa.

In Zambia, UNDP provided communities in Kuzungula District with drought-tolerant seeds and training.  This helped to move farmers from monoculture to multi-cropping, and to be more resilient to the more frequent droughts. With the higher incomes gained, the farmers formed co-operatives, which in turn led to the development of a more resilient agri-business value chain.

In Philippines, UNDP is supporting the Government to reduce the financial costs of extreme weather events and to increase investment in agriculture.  This project provides access to Weather Index-Based Insurance for farmers. Through the rapid payment of insurance claims for the impacts of erratic weather patterns, subscribing farmers can react quickly to restart their livelihoods after adverse events. This insurance program will benefit up to 2,000 farmers over the next two years, and could be widely scaled up.

UNDP provides support for National Adaptation Plans to mainstream climate risk management into planning and budgeting. It is important in this planning to bring voices from outside government into the process, including those of micro and small enterprises.

UNDP has worked with weather agencies and mobile phone operators to develop early warning systems for adverse climate events, including through our “Climate Information for Resilient Development in Africa” programme. Better data is essential for planning when to plant and harvest.  A UNDP-supported Early Warning Systems project in Malawi was one of the very first Green Climate Fund projects approved for financing just last month.

UNDP is also working directly with the private sector to increase resilience in agriculture value chains in Africa through a new regional program. The project is based on years of successful implementation of UNDP’s “African Facility for Inclusive Markets” initiative. This is supported by the Global Environment Facility’s Integrated Approach pilot program on “Fostering Sustainability and Resilience for Food Security”. 

Conclusion

Adaptation to climate change is critical for sustainable development. In the face of a changing climate, vulnerable communities need to become more resilient to extreme weather events. Businesses must be able to manage risk and harness new opportunities. Countries will succeed when their economies are strong and resilient.

This joint UNDP/WRI report makes the case for focusing on micro and small enterprises because they provide livelihoods for the vast majority of the world’s poor who are the most vulnerable to climate change, and because by strengthening their own resilience they will also strengthen the resilience of their communities.    

UNDP will continue to work with governments to engage the private sector and financial institutions in support of adaptation. In particular, we will continue to work with the insurance sector to advance action on climate risk. We hope this joint report will inspire strong partnerships for supporting adaptation by micro and small enterprises.


[1] UNEP Adaptation Gap Report 2014

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