Economic appraisal of fisheries and aquaculture adaptation

The methods for adaptation appraisal have been evolving to address the methodological challenges raised in Chapter 3. Frameworks and approaches for identifying and prioritizing early adaptation, i.e. early adaptations that are likely to have good returns on investment, have been developed and applied. These are sometimes termed no­or low-regret adaptation frameworks (e.g. IPCC, 2012; DFID, 2014).[1] Alongside this, there has been the development of methods to address the particular challenge of uncertainty as identified in Chapter 3, with decision support for the appraisal of adaptation options using decision-making under uncertainty (DMUU). The two are linked, but their application can vary, as shown below:

  • Frameworks for early adaptation prioritization and sequencing over time. These are broad typologies that can help in developing adaptation policy and programmes (Warren et al., 2016), and they are often used for initial scoping of options at the project level.
  • Decision-support tools for adaptation. These are more formalized methods that are used for appraisal. For some adaptation options, conventional decision­support tools can be used; but for longer-term decisions, this includes the use of DMUU. While they can be applied as part of policy or programme applications, they are most relevant and applicable for detailed project appraisal (Watkiss et al., 2014).

In addition, in many countries, there is a shift towards mainstreaming adaptation in fisheries and aquaculture policy. More details of these approaches and examples from application in the fisheries and aquaculture sectors are presented in turn below.

Early adaptation frameworks

Early adaptation frameworks can help to identify adaptation priorities for the next five years or so, which is the focus in early NAPs or adaptation projects (Fankhauser, Smith and Tol, 1999; Hallegatte, 2009; Ranger, Harvey and Garbett-Shiels, 2014). This type of adaptation framework was recommended in the recent FAO publication on the impacts of climate change on fisheries and aquaculture (Poulain, Himes-Cornell and Shelton, 2018). The recent literature (DFID, 2014; Warren et al., 2018) identifies three priorities for these early adaptation frameworks:

Interventions that address the existing adaptation deficit.[1] This is the current (economic) impact of current climate variability and weather extremes, such as tropical storms. All countries have an adaptation deficit, and many adaptation options can have potential benefits in reducing this current deficit, providing immediate economic benefits, as well as building future climate resilience. These are often known as no- and low-regret actions. Many of these options overlap with current good practice in the fisheries sector, and there is some evidence for their costs and benefits. These include capacity building (institutional strengthening and technical assistance for climate change and adaptation), awareness raising (of opportunities and threats), enhanced weather and climate services, and risk transfer (e.g. insurance) and risk reduction.

  • Early interventions to ensure that adaptation is considered in early decisions that have long lifetimes, and which will be exposed to future climate change, such as major infrastructure. These help to avoid “lock-in” to the large future risks of climate change that are difficult or costly to reverse or change later. However, in order to make sure these early investments make economic sense, they need to consider the concepts of DMUU, with a greater focus on flexibility, robustness, etc.
  • Early adaptation steps for decisions that have long lead times, or early adaptation to start preparing for long-term major climate change, using iterative approaches (i.e. planning, monitoring, pilots and research) to help inform future strategies as part of adaptive management. These provide economic benefits from the value of information, learning and option values.

At the programmatic level, especially in the national context, all three of the above priorities are needed. In other words, they are not mutually exclusive. Therefore, there is a focus on portfolios of context-specific adaptation strategies. These can be presented as an adaptation pathway over time, and can be linked to policy cycles.

This focus on early adaptation is considered particularly important for fisheries. It is expected that some fish populations and ecosystems will be more at risk from early climate change impacts. These will include those fish populations that are already near their physiological limits, that are compromised in terms of their resilience due to existing anthropogenic factors, such as overfishing or pollution, or that are in locations most likely to suffer climate change impacts (OECD, 2010). However, it is also stressed that, in the longer term, the response in the fisheries sector – at least in some regions – will need to be transformational and will involve major changes.