It is evident that addressing the root causes of conflict while addressing the impacts of climate change stress on the economy – and vice versa – remains difficult. Building climate change conflict resilience is therefore a challenging and arduous thing to achieve as policymakers and the private sector are tasked with integrating a plethora of various entities into the picture. Thinking larger and elaborating on the repercussions of policies is necessary. Based on the previous chapter, building climate change conflict resilience consists of a multi-layered challenge: Firstly, it consists of making nations more resilient to conflict in general. This means identifying and addressing underlying factors for conflict such as religious and social tensions as well as distributional inequalities. Secondly, climate change conflict resilience has to address the direct climate related factors that lead to environmental stress as a conflict multiplier. Thirdly, climate change conflict resilience should deal with the indirect effects of climate change on the business and financial world. Fourthly, climate mitigation and adaptation policies as new sources of conflict should be avoided. All of these measures bear important economic components. In this chapter, policies that can build general climate change conflict resilience are discussed, followed by a reflection on the specific economic dimension that is also necessary to build climate change conflict resilience.
Building overall conflict resilience
Some factors that make countries particularly vulnerable or resilient to conflicts cannot be influenced, such as their geographic position (e.g. being landlocked or not) or their degree of natural resource endowment. However, many other factors remain that can be influenced by policies. Building overall conflict resilience is generally recognized as consisting of several dimensions. The OECD for instance, distinguishes between four dimensions of a successful approach: societal, political, economic, environmental and, as a possible fifth dimension, security.[41] The need for a multi-faceted policy approach is also recognized in the HCSS Drivers of Vulnerability monitor.[42] These indicators suggest that for building general conflict resilience there are policies needed to address issues of security – including political violence, terror and refugee outflow -, politics - including civil liberties, political rights, government effectiveness, rule of law and corruption -, social and demographic - including education, female labour participation and fertility – and economic - GDP, exports, resource rents, inflation and trade openness.
While the scope of policies falling within these dimensions already seems wide-ranging, addressing environmental stress factors involves even more policies, and poses a more puzzling conflict landscape for researchers and policymakers alike.
Addressing direct climate change related stress factors
When looking specifically at environmental, resource and climate change related conflict, the above policies continue to apply, however more specific policy measures for resilience building can also be identified. These are often related to the resources themselves, to the resource user and to the ‘rules’ that govern the use of resources.[43] Young and Goldman (2015) for instance find several factors that can foster and strengthen relationships between former adversaries after a conflict that also involved the use of natural resources,[44] namely:
Strengthening governance institutions and improving natural resource management can help to resolve disputes, promote equitable access to natural resources, and support sustainable economic opportunity and redevelopment.
Joint management of shared natural resources can help conflict-affected communities move away from maladaptive livelihood strategies (esp. linked with intimidation, violence or destroying natural resources).
Increasing economic, educational and capacity-enhancing opportunities and social standing among previously disempowered demographic groups, such as women and unemployed youth, can improve both livelihood security and empowerment among members of such groups.
Re-establishing financial services (in particular, microfinance) and the flow of income can facilitate redevelopment.
A key design approach to determining specific resilience areas has been developed by The Global Facility for Disaster Reduction and Recovery (GFDRR), which uses five key instruments to address climate change resilience, namely Identification, Reduction, Preparedness, Insurance and Recovery.[45] Awareness of potential threats and anticipation of potential effects play a crucial role in this approach. Solutions, according to this approach, should be tailor-made rather than generic.
The understanding of the specific context of a conflict in which resource use and climate change play a role as conflict factors is vital to building resilience, and is also stressed by other authors. USAID (2015)[46] write that context, institutional performance and understanding key actors are crucial for resolving such conflicts. Vivekananda et al. (2014) underline that understanding the local variation of societies, the “contextual complexities,” should be the first step for any resilience-building operation. In their view, local and national-level dynamics need to be considered in tandem to understand how changes in one place might have effects elsewhere.[47]
Rüttinger et al. (2015) stress the importance of integrated approaches to address climate change as a conflict factor. In doing so, they believe that the international community will be better equipped to mitigate its interconnected risks while realizing important co-benefits. Recommendations of the report include making climate change a foreign policy priority for all G7 members and using their clout to create a global resilience agenda.[48]
Dealing with the effects of climate change on business and the financial sector
While policies addressing overall conflict resilience and direct climate change related stress factors are often aimed at developing nations, the impacts of climate change on the financial world are of a different nature. These require economic and financial policies of all countries to converge in order to reduce the risk of climate change becoming a cause of severe stress to the global economic system as a whole.
Economic policies addressing the effects of climate change in particular involve shifting investments from fossil to non-fossil resources, for instance by using sovereign wealth funds and public pension funds, and rely upon the development of certain measures in the insurance sector, such as the development of improved statistics on climate risks and financial instruments needed to deal with them. Yet, many of the measures required to address climate change risks to the economic system have to arise from the private sector itself. Such voluntary private sector initiatives can include private equity funds no longer investing in fossil fuels, or re-insurance companies forming working groups to address climate change risks. However, climate change impacts do not only impose new risks on the economic system, but may also provide large new opportunities – for instance for the insurance sector to invest in micro-insurance programs, climate-index-based insurance products for private and public sectors, as well as multi-country insurance risk pools.[49]
Preventing climate change policies from becoming a new source of conflict
Perhaps the most difficult challenge to policy in relation to climate change risk is to prevent policies intended to address climate change from causing unforeseen side-effects which can develop as new sources of conflict risks. Biofuel policies are the most prominent example of such well-intended policy initiatives producing unforeseen negative impacts by shifting land-use from food to biofuels production and thereby depriving parts of the population in some nations of essential food crops.
Future climate change policies could potentially introduce new dependencies on certain resources, thus impacting the relationships between countries or weakening regimes heavily dependent on fossil fuel rents. While the unforeseen side-effects of climate policies can never be fully prevented, a comprehensive geopolitical assessment of climate change policies targeting conflict factors could help minimize such ‘collateral damage.’
The economics of building a framework for climate change conflict resilience
It is clear that economic policies are only one component of comprehensive climate change conflict resilience policies. In addition, the economic component of such policies is quite variable in character. It varies from taking into account unequal or changing distribution of wealth as a factor that can contribute to igniting conflict (for example via proper resource management arrangements between different groups affected by conflict) to economic policies and stimulation of voluntary business arrangements that can help stabilize the global economic sector and thereby prevent economic destabilization. It is also necessary to carefully design measures in such a way that unwanted side-effects, which could contribute to new conflicts in the future, are prevented as much as possible. Developing a quantitative policy framework for building climate change conflict resilience cannot, therefore, focus only on economic components; rather, it should consist of several layers, of which economics is an integral part. Consider, for instance, the role of climate change as an impact factor on other societal aspects and the dependence of a country’s economy on non-renewable energy. The aforementioned discussion of developing economic resilience, climate change as a threat multiplier, conflict induced by both identity related issues and distributional issues, coupled with the risks of an economy’s reliance on non-renewable energy, when taken together, illustrate the dynamic relationship and interconnectivity of the economics of planetary security. For example, one particular economic aspect taken into account in the quantitative framework is that vulnerability to conflict can to a certain extent be compensated by economic resilience. A high GDP and low external debt, as well as a diverse economy and a well-developed market with high labour mobility, are factors that can help to counteract such vulnerabilities to conflict. Another crucial aspect which states need to consider is the diversification and complexity of a domestic economy. The more varied and manifold an economy is the more options both businesses and government administrations have to improve it. This ties in well to the need for high credit ratings as this takes into account the likelihood that such investments will reap high returns in the long and short term.