Conducting the climate risk assessment is the second phase of climate risk management for activities, following planning for the assessment.
Conducting a climate risk assessment consists of three interrelated steps:
- Assess Climate Risks and Opportunities
- Address Climate Risks
- Plan for Adaptive Management
The assessment also involves consideration of opportunities to enhance results and build climate resilience.
Assessment teams have flexibility in the approach and resources they use to conduct the assessment. USAID’s Climate Risk Screening and Management Tool (CRM Tool) provides a systematic framework to help teams assess and address risks in a holistic and integrative manner. A series of sector-specific annexes associated with the CRM Tool provide more detailed guiding questions and illustrative examples of climate risks, CRM measures, and opportunities. Assessment teams may also elect to use other methods.
CRM Resources for Conducting Assessments
A. Assess Climate Risks and Opportunities
Assessing climate risks entails identifying and rating climate risks that could negatively affect the activity’s outcomes. In this step, it is important to review climate information relevant to the timeframe and geography of the interventions. Starting with a brief overview of relevant climate information ensures the assessment is based on an understanding of recent and expected climate impacts. The Climate Risk Profiles and USAID’s CRM Tool can help identify relevant risks and adaptive capacity. Regardless of the approach and tools used, each climate risk identified for each intervention must be rated as low, moderate or high. Risk ratings are a function of the probability of negative impact and severity of the impact, keeping in mind adaptive capacity.
Engaging the team in a facilitated process allows for consideration of multiple perspectives and diverse expertise.
Assessment teams must consider opportunities, which fall into three categories:
- Achieving multiple development objectives including reducing greenhouse gas emissions;
- Taking advantage of “windows of opportunity” created by the local/national context, e.g., laws, policies, attitudes, and interests of stakeholders; and
- Opportunities created by the changing climate.
B. Address Climate Risks
Addressing climate risks entails identification of measures to manage risks. According to USAID guidance this is required for climate risks rated as moderate or high and is optional for low climate risks. USAID’s CRM Tool can help assessment teams use a multi-criteria approach to select the CRM measures likely to be most feasible and cost-effective to incorporate into design and to implement.
Assessment teams have three options for addressing moderate and high risks:
- CRM measures can be integrated in activity design.
- CRM measures can be identified through additional analyses or in further steps taken during implementation. In both cases, the solicitation should incorporate the results of the assessment, especially how climate risks are addressed.
- After consideration of tradeoffs, assessment teams can recommend accepting a/the risk(s).
By accepting a risk, the assessment team acknowledges that a climate risk could negatively affect activity results, but that the team could not identify a feasible way to manage the risk and felt the intervention was worth pursuing anyway.
C. Plan for Adaptive Management
When determining how to address the climate risks, the assessment team should develop a plan for adaptive management during implementation to ensure the CRM measures are effectively addressing the climate risks. This is a particularly important aspect of planning under uncertainty. The Climate Risk Management: Monitoring, Evaluation, Learning and Knowledge Management guide can help with this process.