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1. Adaptation to Climate Change – What role for microfinance?
2. The Lessons of the Past: An Archaeologist Looks at Ancient Climate Change”
1. Adaptation to Climate Change – What role for microfinance?
What do we mean when we talk about adaptation to climate change? And in which way could Microfinance play an effective role for strategies to face Global Warming impacts in developing countries?
Shardul Agrawala – OECD Environmental Directorate and co-author with Maëlis Carraro of the presentation Adaptation to Climate Change: What role for Microfinance? – answers to Climate Science&Policy’s questions during the International Workshop “The Social Dimension of Adaptation to Climate Change” in Venice, where he made a presentation titled Adaptation to Climate Change – What role for microfinance?
Microfinance – Mr. Agrawala explains – is essentially the provision of loans and other financial services to the poor sections of the society; it is effectiveness in responding to Climate Change impact demands attention to small project with a focus on local programs, specially in Developing Countries. The way in which the international community will be able to deliver loans for this small project is a big challenge for our the future and our capability to face Climate Change impacts.
What is Microfinance
It is essentially the provision of loans and other financial services to the poorer sections of society and has a very important role to play in facilitating responses to the impacts of Climate Change.
When we’re talking about adaptation to climate change what we want to do is to facilitate actions by a whole range of actors in society to undertake the adjustments they need to take to respond better to the risks exposed by climate change. Obviously some of those measures would involve very large-scale investments, for example, building sea walls, dikes, or damns and reservoirs. But a lot of the actions will need to be taken by vulnerable sections of the society. In this particular context, Microfinance is essentially the provision of loans and other financial services to the poorer sections of society. Microfinance has a very important role to play in facilitating many of the actions that these sections of society need to take to respond to the impacts of climate change. As such it is a very good delivery mechanism when we are talking about delivering adaptation finance, and a very good mechanism to reach one segment of society, which is particularly vulnerable to the impacts of climate change.
Microfinance and Global Funding
The challenge is not only about estimating costs of impacts of Climate Change, but it is also about how to reach the most vulnerable sections of our societies.
The short answer is that at present no link has been made between the discussions at the international level on financing for adaptation and there are no strategies in grounds like Microfinance. A lot of the focus in the last couple of years has been on estimating what the global costs of adaptation might be. Recently, there has been a lot of emphasis on scaling up financing at the global level to deliver adaptation finance. What we have not talked about so far is how to allocate this global financing, and particularly how we make sure that a significant section of this financing actually reaches some of the most vulnerable sections of society. So, it is in this context that Microfinance is quite important. But as far as I am aware, much of the policy debate at the international level has still been focused on the question of scaling up financial resources and they have not yet come down to addressing the appropriate delivery channels. I think this is more of a forward-looking research that we have done and hopefully it can add one more idea to the international discussion. While it is quite important to look at issues of global financing we also need to start actively addressing the issues of how to make that finance reach the right people. I would also say that Microfinance could be a potentially attractive vehicle to reach the poor, but it’s not the only vehicle, nor is it suited for all purposes. At a minimum it merits for the consideration by the global policy community.
Adaptation and Microfinance: Some Examples
Bangladesh: in a country that is particularly vulnerable to the impacts of climate change, there are lending programs encouraging people to build houses that are more resistant to frequent floods and monsoon winds.
Currently the financing for Microfinance projects is not coming from any climate change related funding. These projects are funded by entities called Microfinance Institutions, which at times receive start-up subsidies or other funding from government agencies as well as international donor agencies. But if you are talking about specific projects, there are actually several projects, for example in Bangladesh, a country that is particularly vulnerable to the impacts of climate change. There are examples of lending programs, which Microfinance institutions have funded now, that are encouraging farmers to adopt more soil varieties, which are giving loans to people to build houses that are more resistant to frequent floods and monsoon winds. These are examples of measures, which would also be good adaptations to current climate risks, as well as some of the impacts of climate change.
Enhancing Microfinance Effectiveness
The keyword is synergy and we need, above all, is introducing Microfinance into the international debate, promote a global discussion on lending programs.
I think we need to do several things. First of all, when we are talking about the international policy discourse, we need to introduce the idea of Microfinance into that discourse. As I said at the moment, Microfinance is not even a part of the discussion in adaptation finance. First we need to introduce this idea at the international level. But the other thing we need to do is reach out to existing Microfinance institutions and perhaps have a broader discussion with the lending programs. There might be a lot of synergies between what they are doing and what might be needed by adaptation climate change. But there might also be cases where they might not be exploring all possible opportunities on what they could do to facilitate adaptation. In a small subset of cases there might be activities which Microfinance lending is supporting right now which may actually enhance the vulnerability of society to longer-term impacts of climate change. So, in those cases there might also be some adjustments, which might be needed to exist in lending activities so that the projects that they support are resilient to the impacts of climate change.
2. The Lessons of the Past: An Archaeologist Looks at Ancient Climate Change”
Looking at the past to understand what’s happening today. In this way you could summarize how Archaeology and Anthropology contribute to our comprehension of Climate Change and its impact on our societies.
Archeologist Brian Fagan, author of the book "The Great Warming Climate Change and The Rise and Fall of Civilizations", explains how ancient Climate Change affected the Earth in the past and how some civilizations (such are the Pueblo Indian from Chaco Canyon, New Mexico, at the beginning of the 11th century, or the Egyptian civilization in 2180 BC) were able to adapt to the changed climate while other civilizations perished under the effect of a silent elephant walking across centuries.
Watch the video interview with Brian Fagan at the International Workshop The Social Dimension of Adaptation to Climate Change in Venice.
Studying Ancient Climate Change: The Great Warming
The lessons of the past give us clues to what we should look to for the future.
If you combine the long-term view with the view of today, you get a unique picture of how humans have adapted to ancient Climate Change
Archaeology is the study of ancient societies over long periods of time, not only hundreds or thousands of years, but even millions of years, and we can give a long-term perspective to the study of humanity. Anthropology studies modern and living societies. If you combine the long-term view with the view of today, you get a unique picture of how humans have adapted to ancient climate change. The Great Warming is a book about a period called the medieval warm period, which was from about 800 to 1250. This was a period of modestly warming temperatures and its consequence was a series of droughts in the western United States, Central America, Peru, Northeast Brazil, and in China. The effects of these droughts on humanity were very serious indeed. It led to the collapse in the Maya civilization. It was a major factor in the ways in which the societies of the Andes and of the Peruvian Coast evolved. It was clearly, although we do not know much about it, a major factor in the development and tragedies of the Chinese civilization. I realized that if we had looked at this a thousand years ago, we would have some interesting lessons about the possibilities of drought today. A thousand years ago in California, there was a drought that lasted over a hundred years. This kind of long-term drought in our society with large cities and with minimal people around is clearly very serious. I really think that the lessons of the past give us clues to what we should look to for the future.
The Silent Elephant in the Room
Who (or what) is the silent elephant walking across centuries? A metaphor invented to describe dangers and threats from the past to the present of Climate Change
Adaptation to Ancient Climate Change: Two Successful Stories
Twelve hundreds years ago the Pueblo Indians survived the fifty-years drought; more than twenty centuries Before Christ the Egyptian civilization found the way to face the impacts of climate change.
There are numerous examples of success, but with small societies. I think one of the most important examples is from Chaco Canyon, New Mexico where the Pueblo Indians about twelve hundred years ago built a series of large pueblos, which became major ceremonial centers. In 1040, there was a fifty-years drought. This is not an area where agriculture is easy even if there is plentiful rain, so they moved away. The society did not collapse, but family-by-family, household-by-household, the people moved away. They went to live with relatives in other communities who had rain and more food. Society continued because the people to whom they moved knew that if they had a problem, they could have also moved to them. It is a situation of exchange. It was a success for adaptation based on relationships, on family relationships, and on kinship.
Another interesting example is ancient Egypt, which in 2180 bc, experienced a hundred-year drought, and this led to much less plentiful floods in The Nile. The result was that a powerful state ruled by a king, who told everybody that he was a god that controlled the floods and food supplies, collapsed because he could not feed the people. Then Egypt became a series of small kingdoms ruled by very competent leaders who fed their people by controlling the frontiers rationing food, and so on. It took a hundred years for Egypt to come back again. But when it came back the pharaohs had learned a lesson. They now called themselves not gods, but shepherds of the people. At the same time they invested heavily in irrigation agriculture and food storage. So if there was a time of shortage, they could feed the people. As a result, Egyptian civilization lasted for 2000 more years.
Related content
- Brian Fagan’s personal web site;
- an audio interview with Brian Fagan on The Great Warming, from the National Review Online;
- the web page of the International Workshop The Social Dimension of Adaptation to Climate Change (Venice, February 18th – 19th, 2010) with keynote speakers’ papers and presentations.