At this stage, project teams assess their project’s capacity to adapt to the impacts identified in their preceding assessments. Adaptive capacity is evaluated in two steps:
- Non-physical project components
- Influence of development context.
Non-physical project components: In this step, project teams examine those activities in their project that do not involve physical or structural work to assess how they influence the project’s adaptive capacity. This step is crucial because projects typically include a non-physical investment, such as capacity building or policy development. Such investments may have a significant influence on stakeholders’ ability to cope with the impacts of climate and geophysical hazards. This step highlights the importance of such investments in determining how impacts from climate and geophysical hazards could potentially be managed.
Influence of development context: In this step, the adaptive capacity of the broader context-that is, the human environment outside the realm of the project-is considered. This step allows users to acknowledge the social, economic, and political factors that are outside of their control, but may either worsen or reduce the potentially harmful impacts of climate and geophysical hazards on their project.
Independence of time frame: Both types of adaptive capacity ratings are assessed independently of time-frame. This is because these non-physical elements do not typically have clear “lock-in” effects, unless they involve major institutional investments/changes, in the way that physical infrastructure does. The fluidity of the investments underlying non-physical components would make it too complex to determine which elements (for example, policies) would be more influential in the near-term or long-term.
In addition, adaptive capacity can change over short time periods; for example, conflict or economic recessions can rapidly reduce adaptive capacity, while early warning systems and other emergency response protocols can quickly boost adaptive capacity. Therefore, the ratings for adaptive capacity are not assigned to a specific time-frame.
Rating adaptive capacity: The adaptive capacity ratings are not further refined into hazard-specific ratings for either the non-physical project components or the development context. This is because the influence of adaptive capacity typically applies to the impacts of all hazards. For example, policies that implement zoning restrictions to reduce development in highly exposed locations help reduce the impacts of coastal flooding, regardless of whether the flooding is caused by heavy rainfall, storm surge, or tsunamis. Similarly, improved access to loans or financial savings helps communities recover from the impacts of all hazards. Most factors and investments that influence adaptive capacity are not restricted to specific hazards.
The rating scale for adaptive capacity is:
Rather than measuring a level of potential impact, this scale reflects the modulating effect of adaptive capacity on potential impacts. It ranges from positive effects (significantly reduces impacts) to negative effects (significantly increases impacts).