Session 6: Assessing Climate Risks and Vulnerabilities

in Market Systems

Nicole Clot

Senior Advisor Adaptation to Climate

Change

Annick Vollmar, Advisor Market Systems

Development

HELVETAS Swiss Intercooperation

UNFCCC/ITC Workshop

29 October 2018, Geneva

Set-up of the Mini-Workshop

1. Setting the scene

2. The Guideline Why this Guideline?

What is new about the Guideline?

How did we do it? How does it work?

What are the key lessons?

3. Application in the coffee

sector with reference to other

sub-sectors

4. Group Work

5. Plenary Discussion

About HELVETAS

Project Examples

Addressing youth unemployment through job creation, labor

matching and skills development

Improve income of local population through improved access to

services and markets

Improve income of cashew and peanuts producers through

long-term market partnership with a trading company

Through Multi-Stakeholder initiative improve income and food

security of rice and cotton producers

Market Systems Development (MSD)

• MSD is an overarching approach being used in different such as

private and financial sector development, vocational skills

development but also in other thematic fields like governance,

infrastructure, environment, policy and science.

• The approach provides a set of principles, frameworks, and

good practices that guide the analysis of market systems and

development interventions, which bring about socially inclusive

and pro-poor change.

• Drawing from adaptive management principles, the approach

can help new or ongoing activities become more effective by

strategically thinking through questions related to sustainability,

scale and impact.

Guiding principles of MSD approach

Systemic action

• understandingwhere systems are failing to serve the needs of disadvan-taged / excludedgroups, and acting to correct those failing.

Sustainable change

• deliveringsustainable outcomes by better aligning key systemic functions and players with the incentives and capacity to work more effectively.

Large scale impact

• targetinginterventions towards more inclusive systems that serve a large number ofdisadvantaged/ ecluded people

Facilitative role

• determining a catalytic purpose for the development agent that stimulates, but does not displacesystemic functions or players.

Gender Equity and Social Inclusion

• identifying and addressing systemic constraints that prevent disadvantaged and marginalised groups to access economic opportunities (political freedoms and social facilities)

A matter of effectiveness

Many projects do not

have an immediate

focus on systemic

change.

They provide direct

services/solutions to

beneficiaries/target

groups themselves

Results may be

inclusive, but small in

scale and poor in

sustainability

Social objective

(inclusion)

Performance:

access & usage

System change

Systemic

intervention

Why the Guideline – Learning Journey

▪ Increasing loss in yields due to climate variability/change in our value chain projects.

▪ First experience: Risk and vulnerability assessments in market system projects (Armenia, Georgia and Honduras).

▪ Growing interest for addressing climate risks and vulnerabilities in MS in a systematic way.

▪ Identification of emerging opportunities due to the changing conditions.

Climate change is the greatest and widest-ranging market failure ever seen,

as in most markets, the effect of this market dysfunction falls most on those

least able to take action to escape its consequences (Stern Report).

The Guideline (i)

For whom

▪ Small/medium enterprises

▪ Actors in the market system along the

value chain

▪ Practitioners supporting the process of

making value chain more climate

resilient

Purpose

▪ Understand climate

risks/opportunities in their sub-sector

▪ Develop a comprehensive climate

risk management approach for the

enterprise

▪ Move towards a proactive attitude

with long-term perspective

The Guideline (ii)

Key Features

▪ Demand-driven: Guideline based on first hands-on experience in ongoing market system projects.

▪ Joint-effort: Experts from the Advisory Service Department (Climate Change/Market System) and the country program of Nepal.

▪ Not a new tool, builds on existing approaches: Bringing the two approaches – MS and CC – together.

▪ Flexible: To apply and adjust the Guideline to their local context and needs.

ApproachMarket systems development

project cycle

1. Setting the strategic framework

2. Understanding Market Systems

3. Setting the Vision

4. Facilitating systemic change

5. Measuring results

Adaptation to climate change

1. Identify adaptation needs - risk and

vulnerability assessment

2. Identify ACC/DRM options

3. Prioritize and choose the best

ACC/DRM measures

4. Plan and implement ACC/DRM

measures

5. Develop a M&E system or add

indicators to an existing M&E system

Tools for risk assessments• CRiSTAL (Community-based Risk

Screening Tool, Adaptation &

Livelihoods)

• CEDRIG (Climate, Environment and

Disaster Risk Reduction Integration

Guideline)

• PROVIA’ Guideline on Assessing

Vulnerability, Impacts and Adaptation

• Participatory Appraisal Tools

The Operational Guide for

Making Markets Work for the

Poor Approach (The Springfield

Centre, 2015).

8-Step Approach

MODULE ARisk and

Vulnerability

Assessment

MODULE B

Identification

and

Implementation

of ACC/DRM

Measures

8- Step approach towards climte resilient subsectors

1. Map core functions, support functions and roles/regulations in the selected

market system;

2. Identify current and potential future hazards, impacts and current coping

strategies;

3. Identify each function’s vulnerability to climate risks;

4. Identify most resilient subsectors based on a scoring matrix.

5. Identify possible ACC and DRM measures;

6. Prioritize and choose the best/most appropriate measures.

7. Plan and implement the selected measures.

8. Monitor and measure results.

Risk and vulnerability assessment in sub-sectors and their priorization at the design and planning stage

Identification and implementation of adaptation and

disaster risk management measures

Module

A

Module

B

Process / Experience

Nepal Various testings and adjustments

(Sweet oranges, banana, charcoal, coffee, macadamia, riverbed

vegetables and walnut).

Madagascar

▪ Analysis of cocoa in the northwest of Madagascar (Lindt&

Sprüngli Farming Program).

▪ Analysis of cotton, artemisia and lima bean (pois du cap) in

the southwest of Madagascar.

Guatemala: Training and application of the Guideline (2-day

workshop).

External interest: Fairtrade organizations; Cacao Platform

Development of the Guideline by climate change and market

systems specialists jointly with the country programme in Nepal.

2010-13Bridging CC/DRR and market systems in ongoing projects

bringing in a climate lens into these projects

2014-16

2017

2018 Demand due

to the

adverse

impacts in

their sub-

sectors

Material available

▪ Website

▪ Publications related

to the Guideline

▪ Material: Tables

▪ Reports on the

applications in

Nepal and

Madagascar.

▪ Guideline available

in French and

Spanish (End of the

year

www.helvetas.org/guideline_cc_ms

Application in the coffee sector in Nepal

Module A

Risk and Vulnerability

Assessment in

Subsectors and their

Priorization

8- Step approach towards climate resilient subsectors

1. Map core functions, support functions and roles/regulations in the selected

market system;

2. Identify current and potential future hazards, impacts and current coping

strategies;

3. Identify each function’s vulnerability to climate risks;

4. Identify most resilient subsectors based on a scoring matrix.

Risk and vulnerability assessment in sub-sectors and their priorization at the design and planning stage

Module

A

STEP 1: Map core functions, support functions and

roles/regulations in the selected market system

Objective• To map and

understand the relevant functions in a market system.

• To understand how the system is working.

STEP 1: Coffee sector map in Nepal

STEP 2: Identify current and potential future

hazards, impacts and current coping strategies

STEP 2 consists of the following:

2a) Identification of current and future hazards

including its prioritization

2b) Detailed climate risk analysis

2c) Hazard and crop seasonal calendar

(optimal)

ObjectiveTo identify current and future hazards, impacts and current coping strategies jointly with the producers and the communities.

!A particular hazard might not yet have

negative impacts today and is

assessed as ‘irrelevant’, but can have

significant impacts in the future.

Step 2: Identify current and potential future hazards,

impacts and current coping strategies

Priorization of the hazards withthe highest score

Actors can

have different

views

!

Priorization:

0 = not relevant

1 = low priority

2 = medium priority

3 = highest priority

c = current; p = potential

hazard

Detailed climate risk assessment

Hazard Intensity FrequencyObserved

Trends

Future

Trends

(evolution

under

climate

change

Impacts

Severity

(expressed

in % and

indicated

which

markek

system is

affected)

Current

Coping

Strategy

Is the

strategy

sustainable?

If not why?

How “strong” is

the hazard when

it occurs (e.g.

low, medium,

high, very high)?

How often does a

hazard occur? (e.g.

once or more a

year, every 2-4

years, every 10

years, less

frequent)?

Do the

community

members

observe a

change? Is there

a trend?Is there a trend in

observations? In

addition to the

observations of

community members,

information gathering

from scientific sources

is recommended.

Severity can be determined

through criteria such as: type of

impact and degree of losses, %

of district affected, damage of

physical facilities, damage by

geographical coverage and social

impact as a result of

disaster/hazards.

Step 2: Example Coffee

2b) Detailed climate risk analysis

Step 2: Example Coffee (additional exercise)

2c) Hazard and crop seasonal calendarExplanation

x = “normal”

xx= very strong

STEP 3:Identify each function’s vulnerability to

climate risks

Objective:

To understand the potential

impact of anticipated climate

risk on a market system.

Each function will be evaluated on its vulnerability to climate risks (merge of Step 1 and 2).

STEP 3: Example Coffee

STEP 4: Identify most climate resilient value

chains based on a scoring matrix

The scoring matrix gives you clarity

• which sub-sectors are most sound both from

an economic and a climate perspective.

• on the different impacts each subsector has

on poverty reduction, economic outcomes,

achieving systemic change.

Categories

• Poverty Reduction Potential

• Economic growth potential

• Potential to facilitate systemic change

• Climate change

Objective

To identify the most

promising sub-sectors in

terms of

climate/environmental as

well as economic and

social resilience

Scoring Matrix

A set of criteriaper category

STEP 4: Example Coffee

Priorization:

1 = lowest

2 = second lowest

3 = second highest

4 = highest

Module BIdentification and implementation of adaptation and disaster risk management measures

8- Step approach towards climte resilient subsectors

5. Identify possible ACC and DRM measures;

6. Prioritize and choose the best/most appropriate

measures.

7. Plan and implement the selected measures.

8. Monitor and measure results.

Identification and implementation of adaptation and

disaster risk management measures

Module

B

STEP 5: Identify possible ACC and DRM

Objective

To identify all options for adapting

to climate change and for DRM.

STEP 5: Example Coffee

Options identified for the coffee sector

(STEP 5)

• Varietal selection and research

• Intercropping

• Proper shade tree management/shade tree plantation

• Moisture management/rain water harvesting

• Altitude shift (above 1000 meters)

• Improved pulping facilities like clean water for washing

• Improve drying system with clean drying yard: drying table

• Appropriate storage facility (i.e. well ventilated room,

prevent from moisture and bad odour)

STEP 6: Prioritize and choose the best/most

appropriate measures

Objective

Select the best/most appropriate measures in

ACC and DRM based on a set of criteria and

an analysis in the market system

STEP 6: Example Coffee

STEP 7: Plan and implement selected measures

ObjectiveTo get agreement on the roles and responsibilities for the identified measures in ACC and DRM

Action plan (Sustainability Matrix) Who does what and who pays?

• Agreement on roles and responsibilities is

key and fundamental for successful

implementation.

• Complete understanding of incentives to

implement the measures to foster long-term

sustainability.

!

STEP 7: Example Coffee

Ongoing activities after the application of the

Guideline

SN Dataset Highly suitable Suitable Moderatelysuitable

1 Elevation 1100-1700 m 1100-2000 m 800-2000 m

2 Slope 1° - 45°

3 Aspect NE NE, SE All aspects

4 Rainfall 1500 mm – 2400 mm 1300 mm – 3000 mm

5 Temperature 15° C to 24°C

6 Land Use Shrub land, Grassland, Agricultural land, Bare land

▪ Altitude shift

▪ Implementation of varietal selection and research

▪ Promoting of intercropping

▪ Promotion of shade tree management/plantation

▪ Promotion of moisture management/rain water harvesting technologies

STEP 8: Monitor and measure results

Objective: To identify whether the selected measures are effective and efficient in a practical and credible way.

Prepare a results chain for each proposed intervention using

adequate research and analysis to show the logic and the

hypothesis of change.

• Reviewing the effectiveness of the measures

• Make necessary adjustment

• Identify good practices and measures that are

suitable for scaling up and/or new strategies

!

What is new in the Guideline

▪ Looking at the entire market system.

▪ Brings all stakeholders involved in the market systems

together Joint efforts to deal with CC.

▪ Clarity on each’s actor’s role and responsibility in the market

system (e.g. Action Plan).

▪ To ensure that the promoted sub-sectors are not only today

economically sound but also in the future climate resilient.

▪ Identification of good practices and measures suitable for

scaling up or assessing whether new strategies are needed.

▪ Longer-term measures requires more incremental and

transformative changes Launching the process today is key

(proactive instead of reactive).

▪ Identification of emerging opportunities of existing/new sub-

sectors.

Lessons learned (concluding remarks)

➢ Sound understanding of the cause and effects of

CC is required to facilitate long-term viability of

agricultural sub-sectors and to identify innovative and

efficient solutions.

➢ The Guideline is an effective, simple and low-cost

instrument for single use and/or comparative

purposes.

➢ Climate risks have to be taken into account from the

beginning to ensure sustainability in market systems.

➢ Sustainability in market system requires today also

ecological sustainability.

➢ The Guideline helps to balance economic, social,

political and ecological demands in a sustainable

way.

➢ Adaptive learning: Carefully monitor ACC measures

to see what works and what does not and hence make

necessary adjustments.

Thank you !

Group Work

▪How do you address climate risks and reduce its

vulnerability to such risks in your work/SME? How does it

relate to the presented Guideline? What are the main

challenges you are facing in this process?

▪How relevant and practicable do you consider the

Guideline for your work? What possible challenges and

difficulties do you see in applying the Guideline?

▪What are possible incentives for actors within an agri-

food system to shift from reactive to proactive climate-

resilient agri-food systems? What are the actor’s

challenges they are facing today and how they can be

overcome?