This is the second of our five-part blog series on engaging the private sector in National Adaptation Planning (NAP) processes. Stay tuned for the third installment of this series on June 19, 2019. To learn more, read our guidance note on the subject.
Among a lush stretch of clear lakes, flourishing vegetation and rolling hills, fields of tea plants grow and thrive for cultivation. Rwanda is the “Land of a Thousand Hills” and one of the world’s largest and best tea producers.
Agriculture continues to dominate Rwanda’s economy, employing more than 70 per cent of the country’s working population and accounting for a third of the national GDP. Tea and coffee are the key cash crops: together they make up 21 per cent of Rwanda’s total exports. And while the tea industry has been a major source of economic and social development, it is also vulnerable to some of the most severe impacts of climate change, including heavy rainfalls, increasing temperatures, floods and landslides.
Those operating in the sector increasingly recognize the urgent need to respond to these changing conditions. The business case is clear: without investments in reducing the vulnerability of the crop and their operations to climate change, the viability of their businesses will become increasingly uncertain. This applies to enterprises both large and small; safeguarding jobs and profits in the face of climate change will require their engagement in adaptation processes, including the National Adaptation Plan (NAP).
As is often the case, this is easier said than done. Globally, a lack of information on climate change is often a key reason why private sector actors do not invest in adaptation. Companies and investors often lack a detailed understanding of what climate change is, how it may impact their operations, and what options are available to them to increase their adaptive capacities and climate resilience. Climate information and data may be unavailable, inaccessible, of poor-quality or unevenly distributed. It may be hard to interpret and understand. It is imperative that governments work to break down these barriers to ensure that private enterprises understand the challenges and how to address them.
They can do this in a few ways. To start, governments should clearly communicate the business case for climate change adaptation, making it clear that climate change will significantly alter the economy and that there may be opportunities inherent in this transition, but also that inaction will bring with it serious risks. Saint Lucia’s NAP document, for example, calculated the cost of inaction in each sector, estimating that, by 2025, a lack of action on adaptation could cost the country up to 12 per cent of its GDP.
Once the gravity of climate change is communicated and understood, it is essential that private sector actors understand what it is exactly they are adapting to. Governments must play a key role in gathering and disseminating localized climate data and presenting it in a format that businesses—both small and large—can understand and use. Governments can do this in a variety of ways, including by supporting improved climate research at public universities, by developing and maintaining a network of hydro-meteorological stations and services, and by establishing a help desk to answer stakeholder questions on climate information.
Finally, governments must work to ensure that, once they understand the gravity of the challenge and its implications, businesses also understand the adaptation options available to them. This information must be communicated through appropriate channels. It may require exploring digitization or mobile technologies, or working closely with local governments, civil society organizations or business multipliers (such as a local Chamber of Commerce) to reach micro, small and medium-sized enterprises. If these options are clearly communicated, the private sector may be able to better quantify the benefits and the costs of action, to inform better decision making.
To this end, governments are not the only actors who can help overcome these key informational barriers. Civil society organizations, development partners and even other private sector actors can address these obstacles. Businesses, for example, can share or sell climate and related information, participate in information-sharing platforms, or communicate their own best practices and lessons learned in adaptation action.
In Rwanda, the Albertine Rift Conservation Society (ARCOS Network), a regional conservation organization, identified some of these key barriers to private sector engagement in adaptation. In response, it organized a series of private sector dialogues in 2017 and 2018 to promote information-sharing between local businesses, civil society organizations and government entities. Sowarthé, a major tea company operating in Rwanda, presented their adaptation efforts during these dialogues, making the business case for these investments: investments in adaptation and sustainable agricultural practices have made their operations far more resilient to climate change. Their participation in the dialogues encouraged other enterprises to participate and explore ways of integrating adaptation into their operations.
Private sector engagement in the NAP process specifically and adaptation more generally will be necessary for countries, communities and individuals to meet the challenge of the climate crisis. We will continue to explore other themes relating to private sector engagement in the coming weeks—including enabling conditions around adaptation financing, capacity building and institutional arrangements. But to start, private sector decision-making on adaptation should be built on a foundation of reliable, accessible and understandable climate information. In addition to a good cup of tea.
Any opinions stated in this blog post are those of the author and do not necessarily reflect the policies or opinions of the NAP Global Network, its funders, or Network participants.
Read other parts of this blog series:
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What is the Business Case for Private Investment in the NAP Process?
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Paying for it: How governments can help the private sector overcome financial barriers to investing in adaptation
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For MSME Day, We Look at How Institutional Arrangements Can Engage Small Businesses in Climate Adaptation
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When Life Gives You Lemons: How to bolster businesses’ capacity for making lemonade out of a changing climate