Major New Program Seeks Adaptation to Climate Change
"\"Climate change is a global problem requiring a global solution. Just as business operations are important, it is imperative to consider the impact of climate change as part of disaster risks reduction on business operations, and impacts on sustainabili
By Tellisa Ramadhani and Ria Putri Santoso
Monday, July 25, 2016
As an archipelago with numerous low-lying islands, Indonesia is very vulnerable to the effects of climate change. With many communities living in coastal areas, the impact of rising sea levels, coastal abrasion, erosion and depletion of natural resources are widely evident. Massive deforestation is also a major problem as national parks have lost large chunks of forest canopy. Based on an article in Inside Indonesia, between 1980 and 2007, there have been more than 174,000 deaths in Indonesia from climate-related disasters such as droughts, floods, landslides and storms.
But climate change does not only affect communities, it also affects the private sector, and, according to ATLAS Research, is likely to have a substantial economic impact, perhaps as much as a 4.5 percent loss in GDP by 2050. A disaster strikes in a manufacturing area can have a devastating effect on the supply chain. For example, the threat of landslides in Garut, West Java, where Chevron Geothermal Indonesia’s pipelines are located, prompted the local government to set up a disaster-risk reduction program. These issues are no longer confined to corporate social responsibility (CSR) programs, but are increasingly front and center for operations and profits.
“Climate change will affect the extreme weather change. In fact, we can really feel the extreme weather change nowadays. It is difficult for us to predict the seasonal changes, especially for the farmers and fishermen in business supply chain who are often confused and have no information on the matter,” said Paul Jeffery, APIK’s Chief of Party.
This vulnerability caught the attention of the US Agency for International Development, or USAID, which together with the Indonesian government, came up with the Climate Change Adaptation and Resilience (APIK) program. The agency has allocated US$19.3 million to this project, seeing it as a model for climate change adaptation. The project started at the end of 2015 and will continue until the end of 2020. Its unique selling point is that it has a holistic approach, which combines both research and advocacy.
The major components
There are five components to USAID APIK. The first is the integration of climate change adaptation and disaster risk reduction into national level policy and coordination by building on existing knowledge from Indonesian government officials.
Secondly, enhancing sub-national government structures and community resilience to climate change and weather-related natural disasters.
The third task is strengthening targeted climate and weather information services, looking at how Indonesia’s systems are still lacking, which is mainly a tool for rural farmers to access weather information.
The fourth is raising awareness and capacity development for the private sector. USAID APIK works with businesses to assess vulnerabilities and decrease risks. For example, in the agriculture sector, farmers and infrastructure are vulnerable to climate change and puts the value chain at risk in a disaster. Thus USAID APIK meets with businesses its coverage areas to build capacity and link climate change problems to the private sector. Currently, the target sectors are agriculture, utilities, infrastructure, tourism, logistics and transportation and fisheries.
The final task is program coordination and documentation. With so many activities needed with regard to climate change and disaster risk reduction coordination is vital to avoid duplication and enhance effectiveness.
Local and national
USAID APIK operates at the national and local level, working in three provinces: Maluku, with an office in Ambon; Southeast Sulawesi in Kendari; and East Java in Malang. The three areas were chosen for their geographical and geological diversity – Maluku is focused on small islands, Southeast Sulawesi on coastal areas ands East Java on watersheds. All three areas have vital rivers and streams that feed into bigger rivers, lakes and oceans.
One of APIK’s programs is the Resilience Fund, which can be used for projects in respective areas. The fund is a co-investment with the private sector, and will not be used to fund APIK’s operations, which are fully funded by USAID, but more to expand to accommodate the needs of businesses. With experts on disaster and climate change risk reduction, APIK also can give technical help for sustainable business.
There is no one-size-fits-all approach to climate change adaptation. No two businesses are alike, so business owners and managers must first seek to understand what climate change means for them. To assess and manage risks and opportunities, there are four key steps.
First, identify business risks and opportunities - This involves taking the basic knowledge about climate change and applying a lens to what it means to your business. This can be undertaken at a high level, or down to a specific component of business operations that is critical to the bottom line. Some broad areas to guide work could include looking at assets and infrastructure, workforce, supply chains and markets.
Second, prioritize risks and opportunities to manage - This involves classifying risks and opportunities into those that demand immediate action, should simply be monitored, or can be put aside. Identifying priorities depends on the likelihood or frequency of a climate change impact occurring, and the magnitude of the consequence should it occur.
Third, appraise adaptation options - Prioritizing risks and opportunities leads to deciding what to do about them. In looking at potential solutions, options to manage specific and short-term events like storms, as well as building long-term resilience through better training and planning, for example, all deserve attention. Equally, there may be scope to take advantage of new opportunities (e.g. early onset of spring extending the growing season for agricultural crops).
Last, implement and monitor responses - Dealing with climate change is the new normal; it is not something that is going to happen once and then go away. As such, adapting to climate change in your business requires an ongoing focus with processes to track the impacts of climate change and what approaches are working best, and fully integrating this into the business and its decision-making processes.
Opportunity-focused adaptation strategies can occur throughout the value chain, from core business operations to supply chain management or community involvement. What is crucial is that companies begin innovating now. By doing so they will gain a first-mover advantage over competitors that are slower to respond. Early action will enable businesses to pre-empt future regulation while also securing the long-term sustainability of their operation.