Chapter 6: Adaptation and Mitigation: What is the Optimal Balance?
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The latest rounds of international negotiations in Copenhagen and Cancun have witnessed the emergence of a bottom-up strategy in which countries unilaterally decide the mitigation effort to propose. This approach has led to a divide between proposed commitments and what is required to achieve ambitious global environmental goals, whose integrity might actually be put at risk. Cancun made significant progress by bringing the essential elements of Copenhagen back into the UNFCCC framework. Examples are the emission reduction pledges, the Green Climate fund, the Adaptation Framework, the Technology Mechanism. However the feasibility of achieving the 2°C target remains uncertain. This objective, for the first time explicitly mentioned in a UNFCCC document, could be undermined by weak national emission reduction targets, indeed leaving room for not yet defined negative effects. In this context, adaptation obtains a defined and unique role: closing the gap between what needed to be done and what has been done. Hence, policy for adaptation needs more attention and policy makers should complement strong mitigation policy. To some extent, people can avoid some of the damages caused by climate change by adopting different behaviours, driven by market signals. For example, farmers can choose plants that thrive in the heat or new houses can be designed to deal with warmer temperatures. This form of autonomous adaptation induced by market price signals is also referred to as marketdriven adaptation. Socio-economic systems have a large potential to adapt to climate change, but market action might not be sufficient. First of all, marketdriven adaptation works well if markets function correctly. Therefore, there are some forms of damage that cannot be addressed by markets, but require some degree of cooperation and the intervention of policy makers. This can be done either locally or internationally. A classic example of adaptation investments that are a local public good are investments to protect against sea-level rise. Second, climate change impacts have an equity-adverse effect and hit poor countries relatively more severely. Climate change adaptation needs will increase over time, especially in developing countries, which will also require investing in institutional and adaptive capacity. The real challenge for adaptation, therefore, lies in tackling climate change impacts in developing countries. In addition, regional patterns of climate change damages are not related to the geography of historical responsibilities. Hence, there is a need for international cooperation on adaptation as well, though for a different reason than mitigation. In this context, the following key questions need to be addressed: how should resources be allocated between mitigation and adaptation over time? How should the equity-adverse impact of climate change be addressed? What are the key priorities to be addressed by adaptation policies and adaptation funds?

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