Using a Livelihood Asset-based Approach for Adaptation Policy Targeting
This study follows in the footsteps of Sen (1981) acknowledging the importance of having
access to wide a range of entitlements or capabilities as people with access to a sufficient
range of assets would have the “freedom” to act in the face of adverse situation. In that
sense, there is no single asset or capital that enables households to adapt and react to the
expected consequences of, for example, a changing climate emphasizing the importance of
having access to a wide range of entitlements when it comes to household resilience
towards, for example, climate-related risks.
More specifically, the outset is taken in asset-based approaches such as the Sustainable
Livelihood Approach and the Social Risk Management Framework (SRM). Common for
these is that households’ ultimately welfare outcomes are determined by their access to
and use of livelihood assets. Acknowledging this, the link to household adaptation and
climate-related risks is fairly straight forward, implying that households with well-
diversified livelihood asset portfolios are more resilient to the expected consequences of a
changing climate, all other things equal. Thus this study uses an approach focusing on the
role of livelihood assets to improve households’ risk management capacity when it comes
to exploring household resilience towards, for example, climate-related risks. It is also
shown how multi-dimensional asset-based maps could provide insights in households’
resilience by presenting spatial contrasts in capital access, thereby making these maps a
useful tool for adaptation policy targeting.
On a more practical level, the idea is to use factor analysis to derive a set of asset
indicators encompassing the multiple aspects of access to livelihood assets. The multiple
indicators are then estimated on a spatially disaggregated level (for example, district-level)
in order to use the results as a tool for policy targeting.
The case of Bhutan is used due to high levels of details in the available household data
from the Bhutan Living Standard Survey (BLSS) from 2007 conducted by the National
Statistics Bureau (NSB) of Bhutan. The high level of details makes it suitable for creating
asset-based measures on a disaggregated spatial level. Bhutan also faces numerous
climate-related risks including landslides, floods and glacial lake outburst floods (GLOFs),
making it highly relevant to examine the resilience of households facing these risks.
Focusing on GLOF-related risks, the results show that the highly exposed areas are quite
diverse in their capital endowments. While the north-eastern parts of the country lack
access to education and agricultural productive assets, the central region is short of,
especially, financial capital. Thus it is argued that “no-regrets” policy interventions
focusing on improving the asset base of households facing climate-related risks in Bhutan
would have to be proper targeted in order to be efficient. In that sense, livelihood asset-
based maps such as the ones presented in this study could be a useful tool in directing
policy efforts to the areas in need.
Sen, A. (1981) Poverty and Famines: An Essay on Entitlement and Deprivation, Oxford