Key sectors

Agriculture, the rural economy and land tenure

Governance issues are central to the resilience of rural economies, agriculture and food security to climate change, particularly in developing countries with more vulnerable populations. Many rural economies are already subject to non-climate stressors such as insecure land tenure, underinvestment in agriculture and global shifts and shocks in commodity prices (IPCC, 2014). Governance priorities may include:

  • Ensuring adaptation and development policies are robust across a range of climate impacts, given the degree of uncertainty of impacts at the local level;
  • Assessing coherence and monitoring the effects of mitigation and adaptation policies on the ability of vulnerable groups to protect livelihoods, make informed decisions and secure land tenure (see Box 5);
  • Strengthening vertical coordination and providing resources (such as information, subsidies, training) to build adaptive capacity of farmers to experiment with new practices and crops in response to a changing climate; and
  • Ensuring social protection programmes are informed by and responsive to impacts on agricultural livelihoods in order to support transitions when necessary.

Box 5: Land rights and climate change

A 2014 report by the World Resources Institute and the Rights and Resources Initiative assessed the impact of secure community land rights on deforestation and climate change, concluding that legal protections and government enforcement of community land rights tends to lower deforestation rates and associated carbon emissions (Stevens et al., 2014). The authors recommend:

  • Ensuring community forest rights are legally protected;
  • Supporting communities through technical assistance (such mapping), enforcement and ensuring coherent policies by not granting concessions on community lands;
  • Engaging communities in decision-making; and
  • Compensating communities for the benefits they provide so as to provide a livelihood incentive.

Agriculture both contributes to climate change through land use change and agricultural inputs and is adversely impacted through warming temperatures, greater extremes and greater rainfall variability. An assessment of 162 country commitments to the Paris Agreement found that 119 countries ‒ including 78 developing countries ‒ included agriculture in their mitigation actions and 126 developing countries included agriculture in their adaptation actions (CGIAR, 2016).

Building adaptive capacity for agriculture systems is likely to require new crop varieties; wider access to information and communication technology for farmers to receive forecasts and make farming decisions; and improved access to markets and crop insurance. ‘Climate-smart agriculture’ is a core part of the World Bank response, which includes adaptive management, improved information systems and safety nets for poor farmers (World Bank, 2015b). Flexible and responsive institutions are particularly key given the level of uncertainty of climatic factors affecting food production. Besides being vulnerable to climatic shocks, farmers connected to global commodity markets are also vulnerable to economic shocks, which produce maladaptive responses and further vulnerability. A national household survey in Tanzania showed households experienced more systemic shocks ‒ such as sudden food price increases, drought or floods ‒ than idiosyncratic health shocks, such as disease outbreaks (World Bank, 2014).

Institutions, both formal and informal, and politics, as before, cannot be ignored. Coordination across institutions, mainstreaming of climate into agriculture and rural development policy and a cross-sectoral approach to address poverty and build resilience for farmers are important. In an assessment of the political economy of adaptation in Africa, Lockwood (2012) argues that much of the adaptation literature ignores the importance of politics and informal institutions, and patrimonial systems still pervade. The author recommends strengthening accountability frameworks for public service delivery, building community capacity for adaptation and working with local institutions whenever possible (i.e. going with the grain).

National governments will need to mobilise climate finance (see previous section), while also dedicating sufficient national budgets to invest in agricultural resilience. This is especially likely to be the case in sub-Saharan Africa: Lockwood (2012) draws a comparison between South-east Asia and sub-Saharan Africa, noting a chronic underinvestment in the agriculture sector of the latter.

Energy

Energy sector politics and decision-making have traditionally involved policy-makers, energy providers (including energy companies and utilities) and energy users (Scarse & Smith, 2009), as well as domestic and international financing institutions (Wood & Martin, 2016). However, as the energy landscape shifts in response to renewable energy policies, new technologies and financial incentives, new actors are becoming more prominent in domestic energy governance, especially around energy access. These include clean energy entrepreneurs, new investors and telecommunications and banking stakeholders, and also greater civil society involvement (ibid.). Engagement in power sector decision-making is typically oriented around 1) decisions on whether and how to implement laws and policies, 2) new investment decisions or changes to existing ones and 3) consumer grievance redressal (ibid.). Past assessments of politics in the power sector have found that energy and finance ministries have dominated reform decisions, excluding civil society and other relevant ministries (Dubash, 2002). Reforms through the 1990s were driven primarily by financial turmoil in the power sector, not by issues of energy access or a sustainable development agenda (ibid.).

Lockwood (2015) explores how policy design, as well as underlying institutions and policy feedback mechanisms, shapes renewable energy transformation pathways, drawing on examples from Germany and the UK. As a general rule, policy-makers seek to balance the perceived interests of energy providers (especially those that are well established) with energy users. While users tend to prioritise affordability and lack of volatility in price and supply, narratives on clean energy and climate protection may also influence users, particularly as renewable energy prices have become more affordable. On the other hand, the incentives and regulations policy-makers establish shape energy provider investment decisions. Large, energy-intensive users may exert political influence, while other stakeholders may see opportunities for low-carbon products. The policy design will determine who benefits and to what extent. These feedback cycles help reinforce the policy (applying stickiness) or spur organised opposition.

Germany and the UK’s policy design differences have created different domestic political economic incentives. The UK produced 25% of its electricity through renewable sources in 2015 (UK Department of Energy and Climate Change, 2016), while Germany produced 31% from renewables (EIA, 2016). Germany has offered a guaranteed market to renewable generators and has a long running feed-in tariff that has dispersed benefits across households, cooperatives, schools and small businesses, strengthening a constituency around co-benefits (Lockwood, 2015). The political economy of renewable energy in Germany was bolstered throughout the 1990s and 2000s through renewable energy associations, a stronger Green Party and increased employment in renewable manufacturing. Renewable energy in Germany had negative feedbacks as well, through higher overall energy prices and resistance from existing large energy companies, but these have not derailed the country’s renewables path.

According to Lockwood (2015), for many years the benefits of renewable energy policy in the UK were reaped almost exclusively by large developers and utilities, because of a design and supporting institutions that did not facilitate access for less established actors. This served to reinforce the existing energy political structure. Overall, the supply chain for renewable energy has not been incentivised through a strong industrial policy. Lockwood argues that the capture of financial benefits of renewables policy by large energy firms has created more negative feedback than in Germany, which has had benefits diffused to a broader share of the public and smaller energy cooperatives.