Indian Council for Research on International Economic Relations

Ongoing Details

Climate Change and the Economic Competitiveness of Cities: Making the Business Case for Adaptation

Project Leader: Meenu Tewari
Research Team:  Saon Ray, Sahana Roy Chowdhury, Amrita Goldar, Vidhya Unnikrishnan, Zeba Aziz
Commencement: November 2012
Funded by: Rockefeller Foundation

This study is located at the intersection of two pressing challenges of the 21st century: urbanization and the urgent need for cities to adapt to the risks of climate change to remain both resilient and competitiveness. Specifically, the study looks at four rapidly growing cities in India and asks how can a business case (and an economic case) be made to motivate greater public and private investment in securing the economic competitiveness of cities in the face of climate risks.

The economic competitiveness of cities in our study is defined as increases in a city’s revenue base, jobs (employment), per capita income, and urban services coverage, i.e., the degree of access that the city’s population has to basic services and amenities that enhance its livability. The research uses mixed methods and builds on the city level studies carried out by the Rockefeller Foundation’s Asian Cities Climate Change Resilience Network (ACCCRN), and is structured around comparisons among four secondary cities in India that are growing rapidly and have different industrial structures: Surat (Gujarat), Pune (and Pimpri-Chinchwad in Maharashtra), Kochi (Kerala), and Ludhiana (Punjab).

We will analyze links between adaptation (resilience) to climate change and urban competitiveness in these cities from four vantage points: (i) the city’s mode of production (industrial structure and the nature of supply chains); (ii) the structure of basic urban services; (iii) urban livelihoods, and (iv) adaptive capacities (within urban local bodies and other urban institutions). In addition, we will pay attention to three themes that cut across these vantage points: innovation, technology, and issues of social capital and collective action, and are likely to be crucial ingredients of any mechanisms of resilience and adaptation that cities adopt and implement.

The study will first establish a set of baseline estimations by categorizing data on the key economic, demographic, urban services and governance-related indicators for the four cities. We will then use a set of indicators of climate change vulnerability (e.g., sea-level rise, water ingression, extreme temperature and precipitation) and hypothesize their potential economic effects on each city. With this as the frame, we will conduct primary research in each location, interviewing firms, community organizations, professional support organizations and different levels of administration associated with the city. Through these interviews we will try to understand how the hypothesized effects of climate change may actually play out on the ground through the perspective of our four vantage points (industrial structure, urban services, livability and governance). The primary research will involve open-ended, semi-structured interviews, and a select number of focus groups with all stakeholders in each city. It will also involve ongoing interactions with officials in municipalities, urban local bodies, relevant state governments, Ministries and ACCCRN-affiliated partner organizations. The purpose of these interactions is not only to solicit information or feedback on the ongoing research process. We expect to use these interactions structured around interim outputs such as case discussions, policy dialogues, and seminars to simultaneously build a network of policy makers and urban practitioners engaged in questions of climate change and the economic sustainability at the urban level.

We will use the results of the four detailed case studies to look for patterns that run across our cases and draw insights about factors and processes that contribute to enhancing urban resilience in the face of climate change in ways that simultaneously help improve the city’s economic competitiveness over time. Based on these findings, we will use scenarios to map out the economic costs of climate change at the urban scale as well as quantify the benefits of adapting to these pressures. These qualitative and quantitative analyses will help us build a business case for incorporating urban climate change resilience into urban investment plans, patterns, and policies.

The comparative method will enable us to make broader generalizations that go beyond a single case. By looking for patterns that run across our cases from the perspective of our four vantage points – industrial structure, services and infrastructure, livelihoods and adaptive capacity – we can trace similarities and differences in the pathways to urban adaptation and distinguish between strategies that are likely to work in some cases but not in others. For example, does variation in industrial structure (or in the nature of a city’s urban service deficits) make a difference to the process of adaption and its effectiveness? Do certain kinds of services need to be prioritized regardless of differences in production structure? Do certain kinds of strategies “crowd” in other adaptation related efforts and investments? Do some efforts, if undertaken first, make it easier to undertake other reforms that are more complex? Do certain tasks elicit or generate greater collective action that can open the path to taking on issues where the interests of urban stakeholders are more divided? When and under what conditions are adaptation measures not just costs to be borne, but sources that improve economic competitiveness?

This comparative method will thus allow us to make analytically useful correlations and distinctions between a city’s economic, infrastructural and governance indicators and the processes of effective adaption to climate change risks. It will also help shed light on the conditions under which some patterns of adaptation hold across cities despite differences in their size, structure and organization, and provide insights on what kinds of planning approaches lead to better adaptation outcomes than others.



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